In re National Min. Exploration Co.
| Decision Date | 17 August 1911 |
| Docket Number | 16,396. |
| Citation | 193 F. 232 |
| Parties | In re NATIONAL MINING EXPLORATION CO. |
| Court | U.S. District Court — District of Massachusetts |
Charles M. Bruce, pro se.
Tyler & Young, for trustees.
The bankrupt in this case is a mining corporation. Its property consisting of certain patented and unpatented mining claims in Gila and Graham counties, Ariz., scheduled as of 'uncertain' value, and certain machinery, tools cars, and plants thereon whose value is given in the schedules as 'book value $22,791.27," is subject to a mortgage deed of trust securing the issue of $250,000 face value 6 per cent. bonds due October 1, 1918. N. L. Amster holds its note for $100,000 payable September 24, 1910 secured by this entire issue of its bonds. It was adjudicated bankrupt on its own petition September 23, 1910.
Frank A. Woodward, Arthur Wainwright, and Francis M. Edwards qualified as trustees October 7, 1910; each giving bond in the sum of $10,000. On October 17, 1910, they petitioned the referee to order the sale of all the mortgaged property, and that the sale might be in accordance with an agreement in writing, set forth, between Amster and a reorganization committee of the bankrupt's creditors.
November 2, 1910, after due notice and hearing, the referee ordered:
The property to be sold as a single parcel, at a date in the last week of February, 1911, to be thereafter fixed by the court, in Boston 'or, if required by law, in the territory of Arizona.'
Notice of the sale to be given before that date, as required by law.
The sale to be free of incumbrances, at public auction, to the highest bidder, without reserve, not to be postponed save for imperative reason, nor in any case for more than 10 days without notice to Amster.
The proceeds to be applied to payment of expenses, discharge of various liens and incumbrances, and then to payment of Amster's secured note, upon terms and conditions prescribed, but which need not be here recited.
January 23, 1911, Amster, as a creditor, filed a petition that the court fix a date in the last week of February for the sale. January 24, 1911, an order was entered fixing February 28th, and directing the sale to be on the premises in Globe, Ariz. The trustees were directed by this order to give notice of the sale by publication once a week for at least four weeks prior to said date, and by mail to all creditors. The order further provided that any purchaser should be required to deposit $5,000 with the trustees, to be forfeited in case the sale was not completed.
February 27, 1911, the trustees filed a petition representing that it was expedient and for the best interest of the estate that they be authorized to postpone the sale, and asking authority to postpone it from time to time and for such periods of time as in their discretion they might determine, provided that Amster should consent to such postponement. An order granting such authority to postpone was made on the same day, without notice.
June 5, 1911, the trustees filed a petition reciting that they had duly advertised the sale for February 28, 1911, at 11 a.m., at the mouth of the Iron Cap Shaft, on the property at Globe, that the sale was adjourned by order of court to March 30, 1911, at the same time and place, again adjourned to May 1, 1911, at the same time and place, and again adjourned to May 25, 1911, at the same time and place; also, that notice of the sale and the several adjournments had been published in Arizona papers named. Affidavits of publication and notice were annexed. The petition further alleged that the property was sold at 11 a.m. on May 25, 1911, to the highest bidder; that the Iron Cap Copper Company, a Maine corporation, was the highest bidder and became the purchaser for $50,000; and that the trustee had received $5,000 from the purchaser as directed by the order of January 24th. A certificate from the auctioneer was annexed. It was further stated that the Iron Cap Company had become owner of Amster's note and was prepared to comply with the provisions of the various orders having reference thereto; these having been meanwhile in some respects modified by an order entered June 5, 1911. The petition, which was sworn to by the trustees, concluded with a prayer that the sale be confirmed upon payment to them of the unpaid balance of the purchase price.
Before this petition for confirmation was filed on June 5th, Charles M. Bruce, alleging himself to be a creditor of and stockholder in the bankrupt company, had, on May 31, 1911, filed a protest against confirming the sale, wherein he set forth in substance the objections thereto now raised by him in his petition for review below mentioned.
On July 7, 1911, the referee confirmed the sale, after due hearing at which Mr. Bruce presented his objections and evidence in support of them. He now asks the court to overrule and vacate the order of confirmation.
The secured debts, as scheduled by the bankrupt, are, besides Amster's note for $100,000, secured by the bond issue of $250,000, in its turn secured by the mortgage above described-- two claims of $2,500 each, each secured by 12,500 shares of the bankrupt company's stock. The unsecured debts as scheduled are $35,450.28. The petitioner for review is not scheduled as a creditor, but it is not disputed that he has proved a claim, not yet allowed, for $333. His petition for review alleges that he is a 'large stockholder' in the bankrupt company. As a stockholder it may be doubted whether he has any standing to oppose the sale, independently of the bankrupt itself, on whose behalf there is no opposition. The bankrupt's interest in opposing it would appear to be slight under the circumstances, and creditors or persons desiring to purchase, to be the only persons whom the decision can affect. There is no other petitioner for review of the referee's order. There has been no opposition to the sale on Amster's part.
The objections to the sale are set forth in the petition in the form of (1) a complaint that the referee excluded certain evidence offered; (2) requests for rulings made at the hearing and in effect denied by the order. The order is alleged to be against the law and the facts shown by the evidence. I shall deal directly with the substance of the objections raised.
It is said that the sale was not advertised as ordered. There was publication in each of the four weeks before February 28 1911, but the first publication was on February 3d, 25 instead of 28 days before the sale. The Act of March 3, 1893 (27 Stat. 751) requires publication once a week for at least four weeks before the sale, as did the order of January 24th, and this statutory requirement was construed to mean 28 days at least, in Wilson v. North Western, etc., Co., 65 F. 38, 12 C.C.A. 505-- a Court of Appeals decision, and the only one upon the question. If the...
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...Transcontinental Energy Corp.), 683 F.2d 326 (9th Cir.1982); In re Rex Body Corp., 138 F.2d 912, 913 (2d Cir. 1943); In re National Mining Exploration Co., 193 F. at 236-237.65 Precedent simply does not support the proposition that individuals other than the receiver or trustee are subject ......
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Transcontinental Energy Corp., In re, 81-5680
...Cir. 1910), the court declined to set aside the sale of a bankrupt's assets to its directors and creditors); In re National Mining Exploration Co., 193 F. 232, 236-37 (D.Mass.1911). We affirm the bankruptcy court's conclusion that Young did not owe a fiduciary duty to Transcontinental on th......
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