In re Penn Development Co.

• Decision Date: 01 February 1915
• Citation: 220 F. 222
• Court: U.S. District Court — Southern District of California
• Parties: In re PENN DEVELOPMENT CO.

220 F. 222

In re PENN DEVELOPMENT CO.

United States District Court, S.D. California, Southern Division.

February 1, 1915

Theodore Martin and Hunsaker & Harris, all of Los Angeles, Cal., for petitioning creditors.

J. R Whittemore, of New York City, for alleged bankrupt.

BLEDSOE District Judge.

In the above-mentioned bankruptcy proceeding, initiated by the filing of an involuntary petition, Theodore Martin, one of the creditors of the bankrupt, has filed his verified petition with the court, asking for the issuance of 'a writ of injunction' forbidding the said bankrupt, his servants and attorneys, 'and all officers, sheriffs, and constables, from selling, disposing of, or in any manner interfering with, any of the property belonging to the bankrupt herein, from the issuance of any writs or writ of execution ' upon the certain judgment hereinafter referred to, or 'from entering judgment in the action' hereinafter referred to, or 'proceeding any further with respect thereto,' until the further order of the court, etc.

The petition alleges that, within four months previous to the filing of the involuntary petition in bankruptcy herein, one Stephen W. Dorsey obtained in a certain action a default judgment in the superior court of the state of California, in and for the county of Los Angeles, against the said bankrupt in a sum in excess of $10,000; that at the same time in another certain action in the said court between the same parties, the said Dorsey caused the default of the defendant to be entered in a suit brought by him for the recovery of 'an alleged indebtedness' in excess of $95,000; that previously thereto, but within the said four-months period in each of said actions, the plaintiff, Dorsey, had caused certain property of the said bankrupt to be placed under attachment, and, although it is not so stated, it is presumed that such property is still under such attachment. It is also alleged in the said petition that the bankrupt, at some time previously hereto, made motions in each of said actions for the vacating of the said judgments and the setting aside of the said defaults, which motions were denied by the said court. It is also alleged that appeals were taken by the said bankrupt from the orders denying said motions, but that no stay bonds of any sort were given or filed, and that no attempt has been made by the bankrupt in any manner to stay or interfere with any proceedings which might be taken subsequent to the making and entry of said judgment and of said defaults. The petition then alleges:

'That, due to the condition as herein set forth, it is possible at any moment to issue or cause to be issued upon said judgment writs of execution, and cause them to be levied upon the property of the bankrupt herein; that under the laws of the state of California in such event it is entirely unnecessary to give any notice of issue of execution, levy, or sale thereunder, to any of the creditors of said bankrupt, and it is possible for levy to be made at any time, and sale had thereunder, without any creditors learning thereof in time to prevent a sale and transfer of property of the said bankrupt to any innocent purchaser for value. If said judgment creditor is permitted to proceed any further with said judgment by way of issue of execution, levy, and sale thereunder, same would result in a sacrifice of the assets of the bankrupt, and in addition result in giving to said creditor a preference over other creditors of the same class.'

It is then alleged that the said debts of the bankrupt are provable and dischargeable in bankruptcy, and that unless the injunction asked for, and herein above referred to, is granted, the creditors of the bankrupt will suffer irreparable loss and injury.

It appears that there has been no adjudication in bankruptcy herein as yet, and that the judgments and defaults herein above referred to were had and taken prior to the filing of the involuntary petition herein. It is also apparent that the injunction herein petitioned for is asked under and pursuant to the provisions of section 11a of the Bankruptcy Act, which provides that a suit founded upon a dischargeable debt, and which is pending against a person at the time of the filing of a petition against him, 'shall be stayed until after an adjudication or the dismissal of the petition.' It will be observed that there is no allegation in the petition that a motion has been made in the superior court of Los Angeles county to stay proceedings in the said actions herein pending, either by staying the issuance of a writ of execution or the entry of judgment, and neither is it alleged that the judgment creditor, or any one acting for him or in his behalf, is about to, or has in any wise indicated that he will, proceed to an enforcement of his judgment, either by the issuance of a writ of execution and sale thereunder, or otherwise. There is, then, nothing alleged to indicate that anything is about to be done which will cause...