In re Stell
| Decision Date | 29 December 1920 |
| Docket Number | 387. |
| Citation | 269 F. 1008 |
| Parties | In re STELL. |
| Court | U.S. District Court — Eastern District of Texas |
William H. Atwell, of Dallas, Tex., for petitioning creditors.
Rasbury Stennis, Adams & Harrell, of Dallas, Tex., for alleged bankrupt.
An involuntary petition in bankruptcy has been filed by creditors of the alleged bankrupt, and the allegations of insolvency have been denied by him after the manner provided in the statute. The issue of fact thus raised is to be tried upon demand of the alleged bankrupt, by a jury. The case during the October 0 term of the Paris court, was continued by consent of both parties.
The petitioning creditors, since the adjournment of court, have filed an application for an order authorizing the examination, as a witness, of the bankrupt. It is obviously based upon section 21a of the Bankruptcy Law (Comp. St. Sec. 9605); but there are no special circumstances alleged, or any reasons set forth, showing a necessity for this examination prior to an adjudication in the usual way. The alleged bankrupt is resisting the application, upon the grounds, first, that the court is, under the conditions, without authority to order such examination; and, second, that if the court has such authority, the request should be refused, because it does not appear that the examination is for the purpose of securing or preserving assets belonging to the estate.
The Case of Cameron, 231 U.S. 710, 34 Sup.Ct. 244, 58 L.Ed. 448, holds, it seems to me, that the court has authority to issue such order. While the facts in that case show that, before the application was made, a receiver had been appointed to take possession of the property, yet the basis of the decision was the fact that the property of the alleged bankrupt had been put in custodia legis by the filing of the petition in bankruptcy, with a view to its ultimate distribution among creditors.
The argument contained in the case of Fleischer (D.C.) 151 F. 81, referred to with approval in the Cameron opinion as illustrating the importance of examinations like this, would apply just as aptly to cases where the effort is to have the examination before adjudication, as afterward; and in the case of Rawlins v. Hall Co., 217 F. 884, 133 C.C.A. 596, the Circuit Court of Appeals of this circuit, referring to the Cameron Case, said:
'While the decision may not be broad enough to extend to an involuntary bankruptcy, and one in which there is no receivership, the reasoning of the court would indicate that the bankrupt court had authority to make such an order in an involuntary case in which no receiver had been appointed.'
Then too, I think that section 21a of the Bankruptcy Act itself, when considered with subdivision (9) of section 7 (Comp. St. Sec. 9591), necessarily...
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