Meek v. Centre County Banking Co Dale v. Same Breeze v. Same, s. 590-592

• Decision Date: 07 April 1924
• Docket Number: Nos. 590-592,s. 590-592
• Citation: 264 U.S. 499,44 S.Ct. 366,68 L.Ed. 811
• Parties: MEEK v. CENTRE COUNTY BANKING CO. et al. DALE v. SAME. BREEZE v. SAME
• Court: U.S. Supreme Court

264 U.S. 499

44 S.Ct. 366

68 L.Ed. 811

MEEK

v CENTRE COUNTY BANKING CO. et al.

DALE

v. SAME.

BREEZE

v. SAME.

Nos. 590-592.

Argued March 13, 1924.

Decided April 7, 1924.

Messrs. Mortimer C. Rhone, of Williamsport, Pa., and Ellis L. Orvis and Harry Keller, both of Bellefonte, Pa., for petitioners.

Messrs. S. D. Gettig and N. B. Spangler, both of Bellefonte, Pa., for respondents.

Mr. Justice SANFORD delivered the opinion of the Court.

These three cases—which were heard together in the Circuit Court of Appeals and are included here in one record—arose out of a petition in bankruptcy filed by the respondent Shugert in a federal District Court in Pennsylvania. In this petition he alleged that he and the present petitioners, Meek, Dale and Breeze hereafter called the defendants—were members of a partnership styled the Centre County Banking Company; that the partnership and each of the defendants were insolvent; and that he and the partnership desired to obtain the benefits of the bankruptcy law. He prayed that the partnership and he and the defendants individually be adjudged bankrupt.¹ Subpoenas were issued for the defendants. All appeared and resisted the petition in so far as it sought to have the partnership and themselves adjudged bankrupt;² and each made a motion to dismiss the petition to that extent upon the grounds, among others, that it was not authorized by the Bankruptcy Act and the court had no jurisdiction under it to adjudge either the partnership or a nonconsenting member bankrupt. These motions were denied by the District Court. On petitions by the defendants to revise the orders of the District Court denying their motion, the Circuit Court of Appeals, being of opinion that the petition in bankruptcy was maintainable under section 5 of the Bankruptcy Act (Comp. St. § 9589) and General Order in Bankruptcy No. 8,³ affirmed the orders of the District Court. 292 Fed. 116. These writs of certiorari were then granted the defendants. 263 U. S. 696, 44 Sup. Ct. 39, 68 L. Ed.

Shugert thereafter died. And the defendants have moved that the proceeding in bankruptcy be dismissed as to them, both individually and as members of the partnership, on the ground that to that extent it should abate. These motions have been answered by the attorney who formerly represented Shugert, as now representing his 'interest,' and by an attorney representing a 'Creditors' Committee,' who insists that under section 8 of the Bankruptcy Act (Comp. St. § 9592) the proceeding in bankruptcy was not abated by Shugert's death and may be continued without making Shugert's personal representative a party. While neither of these attorneys represents any party now before the court,⁴ we treat their answer as the suggestion of amici curiae.

Section 8 of the Bankruptcy Act provides that:

'The death * * * of a bankrupt shall not abate the proceedings, but the same shall be conducted and concluded in the same manner, so far as possible, as though he had not died.'

It is clear, however, that, whatever may be the effect of this provision, when construed in the light of section 1a(4) of the Act (Comp. St. § 9585) defining the term 'bankrupt,' it can have no application except to that part of the petition in bankruptcy in which Shugert sought to have himself adjudged a voluntary bankrupt—a matter not in issue under the motions to dismiss and not now before us. Even if one partner may maintain a petition such as this to have the partnership adjudicated a bankrupt—a question not now determined—yet to the extent that it seeks to have the partnership adjudged bankrupt as against non-consenting partners resisting such an adjudication, it is, manifestly, an involuntary proceeding. In re Murray (D. C.) 96 Fed. 600, 602. And see In re Carleton (D. C.) 115 Fed. 246, 249. In Medsker v. Bonebrake, 108 U. S. 66, 71, 2 Sup. Ct. 351, 353 (27 L. Ed. 654), involving a bankruptcy proceeding brought by one partner against another under the Act of 1867 (14 Stat. 517), this Court said:

'It is not a voluntary bankruptcy if the man is forced into it against his will by his partner, any more than by anyone else; and it is compulsory and involuntary if he refuses to join in such case and is forced into it, as much as in any other enforced bankruptcy.'

And, a fortiori, such a petition as this is an involuntary proceeding to the extent that it also seeks to have the non-consenting partnership adjudged bankrupt as individuals.

In other words, in so far as Shugert's petition sought not merely to have the partnership adjudged bankrupt as against the defendants, but also to have them adjudged as individuals, it was clearly an antagonistic proceeding. To that extent Shugert was not the 'bankrupt,' but stood in a position analogous to that of a creditor seeking the involuntary adjudication of his debtor. Even in so far as the petition sought to have the partnership adjudged bankrupt, the defendants, as non-consenting partners, were entitled, under the specific provision of General Order No. 8, to make defense 'in...