Smith v. Brownsville State Bank

• Decision Date: 10 November 1926
• Docket Number: No. 7028.,7028.
• Citation: 15 F.2d 792
• Parties: SMITH v. BROWNSVILLE STATE BANK OF BROWNSVILLE, MINN., et al.
• Court: U.S. Court of Appeals — Eighth Circuit

15 F.2d 792 (1926)

SMITH v. BROWNSVILLE STATE BANK OF BROWNSVILLE, MINN., et al.

No. 7028.

Circuit Court of Appeals, Eighth Circuit.

November 10, 1926.

A. B. Lovejoy, of Waterloo, Iowa (S. T. Mears, of Waterloo, Iowa, on the brief), for appellant.

Before SANBORN, STONE, and KENYON, Circuit Judges.

STONE, Circuit Judge.

This is an appeal by a bankrupt from an adjudication of bankruptcy made on an involuntary petition. The only issue presented here is that the bankrupt was not subject to adjudication upon an involuntary petition for the reason that he was a farmer.

Appellant presents several points bearing upon this issue. The first is that the petition was insufficient because it did not negative the occupations which are, under the Bankruptcy Act (Comp. St. §§ 9585-9656), excepted from involuntary bankruptcy. This statement concerning the petition is true. While the petition should contain such allegations (Beach v. Macon Grocery Co., 120 F. 736, 57 C. C. A. 150 5th Circuit; Collier on Bankruptcy 13th Ed. p. 210), yet no attack was made upon the sufficiency of the petition. The bankrupt filed an answer claiming to be within the excepted classes as a farmer. More than a month later, he filed a motion to dismiss, stating the same ground, but making no attack upon the sufficiency of the allegations in the petition. The purpose of this motion, was that the bankrupt might secure an early hearing upon the question of his occupation as he deemed it important to have that matter determined as speedily as possible. There seems to have been no objection to this method of procedure by opposing counsel or the court. At the time the motion was taken up, the following colloquy occurred:

"The Court: In what way is the issue joined by the respondent's answers, setting up his occupation, and at a later date is filed this motion, setting up the same thing, is there any pleading on the other side joining any issue on this question?

"Mr. Hendrick: Filed a plea of general denial.

"The Court: Well, have you in the original petition, have you made any allegation taking him out of the excepted class?

"Mr. Lovejoy: They allege that he is a dealer in real estate.

"The Court: Have you alleged that he is not a person within the excepted ones?

"Mr. Hendrick: We allege that he is a capitalist, investor and dealer in real estate.

"The Court: That all may be true, and yet his chief business might be a farmer. Well, I will permit you to join issue, we will assume that you have joined issues, and better make your record on it, and I will hear your testimony now.

"Mr. Lovejoy: For the purpose of this motion, the court would consider the affidavits attached to the motion?

"The Court: Yes.

"Mr. Lovejoy: That is our showing in the first instance.

"The Court: Of course, I cannot dismiss this petition without a full trial of these questions. This is decisive of the whole case.

"Mr. Lovejoy: The reason that we filed the motion is this, that there is some real estate up there, and on this petition the court appointed a receiver before adjudication, and the receiver is in possession of the property and I thought if the question could be tried upon motion, it seemed to me a question that could be tried upon motion, that that would be a quicker way to do it, and the parties would know what their rights were regarding this property."

We think the above shows a clear waiver of any objection either, to the allegations of the petition, or to the failure to file a reply to the answer if there was such failure. It is clear that the procedure adopted was upon the insistence of the bankrupt and for his benefit and that...