In re Hanibel
In re Hanibel
Opinion of the Court
This is an involuntary petition, in which an order was entered to show cause before the register. On the return day, respondents moved to vacate the order and dismiss the petition on several grounds, some of which were held to be good, and others were overruled. This decision, so far as it is adverse to respondents, is presented for review by certificate from the register, and with it there is another question, touching the right of the petitioner to amend the depositions accompanying the petition, which has been adjourned into court for decision. Referring first to the petition, three acts of bankruptcy are charged, the second of which is that respondents, on a certain day, “being insolvent or in contemplation of bankruptcy,*’ made a conveyance with intent to give a preference, and to defeat and delay the operation of the bankrupt act [of 1867 (14 Stat. 517)]. Objection is made to this allegation on the ground that the condition of respondents at the date specified is not definitely described as whether they were insolvent or in con-templátion of bankruptcy. And this objection must be upheld, unless it appear that these phrases are so nearly allied that they may be taken together as describing the status of respondents. In attachment cases it is said that acts which are so closely connected that it is difficult to distinguish the one from the other, as that a debtor has departed, or is about to depart, from the state, may be described in the manner adopted by the petitioner. Drake, Attachm. § 102. Within this rule it may be correct to charge that the debtor is “insolvent. or in contemplation of insolvency,” in the language of the statute, and the rule is so laid down in Bump’s Bankruptcy (8th Ed.) 36. But that phrase is not synonymous with that which was used in the petition, for bankruptcy is a legal status determined by judicial decree, which is clearly distinguishable from insolvency. In re Black [Case No. 1,457]. Therefore, to say that one is “insolvent” is not the same as saying that he “contemplates bankruptcy,” and the rule referred to cannot be invoked to support the allegation. The charge in the alternative that respondents were insolvent or in contemplation of bankruptcy, is not sufficient, as it is impossible to say -which is to be relied on.
It is also urged that' the petition is not properly verified, because it does not appear in the accompanying affidavit that petitioner is a foreign corporation, or that deponent was authorized by petitioner to testify in its behalf, or that he is an officer of the corporation. As to the first point — the legal residence of the corporation — it was said in argument that, by the amendment to the bankrupt act of June 22,1874 [18 Stat. 178], the first five signers to the petition must make oath to it in person unless they reside without the district, and, as there is but one petitioner here, it must show its residence before the oath of an agent can be received. When applied to natural persons the argument is undoubtedly correct, but when applied to a corporation it is without force; for a corporation can never make oath to a petition except through and by means of its authorized agent. The right of a corporation to file a petition in bankruptcy is not de
Passing from the petition to the proof filed with it, it is claimed that the affidavit of Sears is not sufficient to show an act of bankruptcy in respect to the time when the transfer to Cushman was made. As to the real estate, the date of the conveyance is specified, but as to the personal property no date is given. It is indeed stated that the personal property was owned by respondents prior to October 28. 1876, which, it is contended, should be accepted as an averment that it was owne i by them up to and upon that day. But this construction does not accord with the meaning of the words, which may relate to a time long-before the filing of ’the petition, and beyond the limitation of the statute. In other respects the affidavit seems to be sufficient to prove at least one of the acts charged in the petition. The affidavit of Woolfolk, failing to describe with certainty the commercial paper of which payment was suspended, is admitted to be defective, and we have now to consider whether these defects may be remedied by amendment. The right to file amended or supplemental proofs is denied in one court (May v. Harper [Case No. 9,333]), and I do not know that it is distinctly affirmed anywhere. But it has been held that the whole proceeding is founded on the petition by which the court gets jurisdiction, and such appears to be the language of the act. In re Simmons [Id. 12,8G4], It has always been held that the petition may be amended, and this seems to carry with it the right to verify the amendments by the petitioner's oath, and also to file supplemental proofs in support of the amended petition. Of course the right to amend the petition is not without limits, for the cases must be rare in which a new ground of indebtedness, or a new act of bankruptcy, may be brought into the record in that way. But, conceding all that may be claimed in that direction, it must be apparent that, upon almost any amendment of a petition, it will become necessary to put in a new oath verifying the facts alleged, and in very many cases it will be necessary to add to the proofs on file. From the settled rule that a petition may be amended, therefore, we may deduce the right to change or add to auxiliary proofs, so that they may support the petition in its new form, and the right to supplement the proofs, wlipn conceded, must be allowed in the discretion of the court, which will be so exercised as to give the petitioner the benefit of the law, and at the same time guard against deceit and fraud. Within this reasonable rule defects in the petition and depositions filed with it, touching the petitioners’ demand and the acts of bankruptcy charged, obviously arising from mistake or inadvertence, may be cured. The relief here asked is of that character, and it will be granted on payment of costs to the present time. The order to show cause, having been iinprovidently issued upon insufficient evidence, will be set aside.
Reference
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- In re HANIBEL
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