In re RP Brown & Co.

• Decision Date: 29 July 1925
• Parties: In re R. P. BROWN & CO. et al.
• Court: U.S. District Court — Southern District of Georgia

8 F.2d 53 (1925)

In re R. P. BROWN & CO. et al.

District Court, S. D. Georgia, W. D.

July 29, 1925.

Harris, Harris & Popper, of Macon, Ga., for claimant creditors.

Jay & Garden and A. J. & J. C. McDonald, all of Fitzgerald, Ga., opposing allowance of claim.

BARRETT, District Judge.

The Glover Grocery Company, Sheffield Company, and E. A. Waxelbaum & Bro., Inc., brought an involuntary bankruptcy proceeding against R. P. Brown & Co., a partnership composed of R. P. Brown and J. D. A. Smith, which resulted in the adjudication as bankrupts of both the partnership and each individual. The petition alleged that "your petitioners are creditors of the said partnership known as R. P. Brown & Co., having provable claims against the said R. P. Brown & Co. which amount in the aggregate in excess of the value of securities held by them to more than $500." It further alleged "that the nature and amount of your petitioners' claims are as follows: Glover Grocery Company, promissory notes aggregating the principal sum of $4,716.99, upon which there are credits totaling $451.30, making a balance due of the principal sum of $4,265.69; Sheffield Company, promissory note in the principal sum of $788.43, upon which there are credits amounting to $246.95, making the principal amount of said claim $541.48; E. A. Waxelbaum & Brother, Inc., on open account $184.98."

The defendants denied being subject to adjudication as bankrupts, but filed their schedule, in which it appeared affirmatively that the debts owing the said petitioners were all partnership debts. The defendant Brown testified in reference to the claims of the petitioning creditors: "Glover Grocery Company had a little open account besides the $4,500 note. The Sheffield Company has a promissory note on which there is a balance of $541.48, and E. A. Waxelbaum & Bro., $184.98. These people ship goods to R. P. Brown & Co. and these debts are for things shipped to them." The proof of claim of the Glover Grocery Company and of the Sheffield Company both averred "that said bankrupts were at and before the time the petition in bankruptcy was filed herein, and still are, justly and truly indebted" to Glover Grocery Company $4,410.46, represented by four certain promissory notes attached, and to the Sheffield Company $552.75, represented by a certain note attached. The notes in both cases read that "We promise to pay." All of the notes were signed: "R. P. Brown. J. D. A. Smith." In the case of the Sheffield Company, it was recited in the body of the note, "The consideration of this obligation is settlement of ledger account to April 1, 1921."

It is not denied by claimants that the sole consideration for these notes was for goods furnished to the partnership, nor that the claimants have participated, or at least sought to participate, in the partnership assets. Such claimants also seek to participate in the individual assets of the respective partners. Certain creditors of the individual members of the partnership contest the alleged right of claimants to so participate. That forms the issue.

It is well established that the facts above stated would justify a proof of claim against the partnership based upon the notes signed in the individual names of the respective partners. Davis v. Turner, 120 F. 605, 56 C. C. A. 669, 9 Am. Bankr. Rep. 704; In re Weisenberg & Co. (D. C.) 131 F. 517, 12 Am. Bankr. Rep. 417; Mock v. Stoddard, 177 F. 611, 101...