Northeastern Real Estate S. Corp. v. Goldstein, 469.

• Decision Date: 19 July 1937
• Docket Number: No. 469.,469.
• Citation: 91 F.2d 942
• Parties: NORTHEASTERN REAL ESTATE SECURITIES CORPORATION v. GOLDSTEIN.
• Court: U.S. Court of Appeals — Second Circuit

91 F.2d 942 (1937)

NORTHEASTERN REAL ESTATE SECURITIES CORPORATION v. GOLDSTEIN.

No. 469.

Circuit Court of Appeals, Second Circuit.

July 19, 1937.

David Haar, of New York City, for appellant.

Frank, Weil & Strouse, of New York City (David W. Kahn, of New York City, of counsel), for appellee.

Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

PER CURIAM.

Goldstein, the bankrupt, was adjudicated on his own petition on July 17, 1936, and filed his petition for a discharge on August 19th, the return day being fixed for October 14th. On that day the appellant, his only creditor except the bankrupt's wife, filed objections to which the bankrupt excepted, and which he moved to strike out. These objections consisted of (1) allegations of false swearing, specifying a number of instances; (2) the concealment of books; (3) specified fraudulent transfers; (4) the failure to explain his losses. The motion was denied, and the examination of the bankrupt which had not been concluded went on, and during it the creditor learned other facts which it thought good objections to the discharge, especially after the bankrupt attempted to "correct" what he had said before. The creditor thereupon asked leave of the referee to amend the specifications, and the referee referred the question to the judge, from whose decision allowing some of the amendments and disallowing others the creditor has appealed by leave of this court. The proposed amendments were in part merely further particulars of the instances of false swearing and of the fraudulent transfers, already alleged; so far the judge allowed them. But the creditor also sought to introduce new instances of both, of which it first learned during the continued examination after the return day. These the judge refused to allow because they were in substance new objections.

A good deal of confusion has arisen from using the word "amendment" in two senses. Having once pleaded his objections, a creditor may no doubt, for good cause shown, make them more definite and certain, just as he may amend any other pleading. In re Hanna, 168 F. 238 (C.C.A.2); In re Finder, 61 F. (2d) 960 (C.C.A.2). But, if he adds a new objection, it is not properly an amendment. Before the change in General Order 32, 11 U.S.C.A. following section 53, the decisions tended to slur this distinction, because it was not important, for the court freely extended the time to file objections anyway. Thus in In re Carley, 117 F. 130 (C.C.A.3), and In re Nathanson (D.C.) 152 F. 585, it is impossible to tell what the so-called amendment really was. Apparently it concerned only the verification in Re Glass (D.C.) 119 F. 509. The only two decisions we have found in which the issue was squarely raised are In re Johnson (D.C.) 192 F. 356, and In re Schlesinger (D.C.) 31 F.(2d) 789, affirmed Schlesinger v. Phillips, 36 F.(2d) 191 (C.C.A.5); in the first the creditor was not allowed to add to his objections; in the second he was. Whatever may have then been the law, certainly if the power is limited to amendments properly speaking, a new objection is not an amendment merely because it is of the same class as those originally pleaded. Here, for example, the new specifications are none the less additional objections, because they were all either perjuries — "offenses" (Bankr.Act § 14b, subd. (1), as amended, 11 U.S.C.A. § 32 (b) (1) — or fraudulent transfers (subdivision (4), as amended 11 U.S.C.A. § 32 (b) (4), both of which the first specifications had included. In Re Finder, supra, 61 F.(2d) 960, no new facts were pleaded; the old were merely brought within a new legal frame. In re Lauria (D.C.) 18 F.Supp. 984, was not quite that; the facts had indeed been a little varied, but only by changing from the failure to keep a book to its destruction. Perhaps so much is permissible; but here the departures were much wider, were wholly new and separate occasions of wrongdoing, and, unless the creditor may plead new objections, the judge gave it all that it is entitled to.

Since Lerner v. First Wisconsin National Bank, 294 U.S. 116, 55 S.Ct. 360, 79 L. Ed. 796, several courts have considered whether new objections may be added. Judge Hincks held that specifications pleaded in the very language of the statute cannot be amended at all (In re Karp D.C. 11 F. Supp. 129); Judge Brewster that a new objection, plainly such, is not permissible (In re Hurowitz D.C. 14 F.Supp. 71); Judge Byers allowed the name of a new creditor to be added to those alleged to have been left out of the schedules (In re Schwartz D.C. 16 F.Supp. 993); Judge Moscowitz thought that any new objection should be allowed in a proper case (In re Kuhne D.C. 18 F.Supp. 985). On authority the answer is not therefore altogether clear. In principle, so far as there can be said to be any principle about it, it seems to us that the bankrupt here is right. The abuse sought to be remedied by the amendment was the blackmail which had...