In re Eclipse Poultry Co.
In re Eclipse Poultry Co.
Opinion of the Court
On December 5, 1917, the District Court entered an. adjudication against “Oliver D. Phillips, John M. Phillips, and E. Park Montague, partners trading as Eclipse Poultry Company, and John M, Phillips, individually,” and from this order the pending appeal has been taken. The situation is unusual, as will be seen from the following statement of the facts :
Two partnerships in succession have borne the name of the Eclipse Poultry Company. The first, which is the partnership now in question, we shall call No. 1; it lasted from September, 1913, to December 22, 1914, and was composed of John and Oliver Phillips and Park Montague. On December 22 John withdrew, the firm was thereupon dissolved, and the second firm was formed, also' known as the Eclipse Poultry Company, which we shall call No. 2. The partners were Oliver Phillips and Montague, and they continued business until February 18, 1915, when they were adjudged voluntary bankrupts, both as partners and as individuals; the docket number being 7631. Their affairs were duly wound up, their property was distributed, and on September 11, 1915, they were granted a discharge from all provable debts and claims that existed on the date of the adjudication.
Among the creditors that proved their claims were the Fairmont Creamery Company, the Manchester Produce Company, and Weinberg
On May 18, 1915, while the proceeding against No. 2 was pending, the same three creditors filed an involuntary petition against No. 1 (the docket number being 7789), basing their right to petition on precisely the same claims as had already been proved and allowed against No. 2, and setting up as the acts of bankruptcy three preferential payments on January 22, January 25, and February 8, 1915, and a preferential transfer on February 1 by John M. Phillips, as an individual— the dates of all these acts being after No. 1 had been dissolved by the withdrawal of John. On June 1 a jury trial was demanded, but nothing further was done until May 8, 1916, when the petitioning creditors amended the involuntary petition, so as to strike out the request to adjudicate Oliver and Montague as individuals. On October 18 an amended answer was filed, setting up, inter alia, the discharge of No. 2 as a bar to the present proceeding. In May, 1917, the trial was had, a directed verdict was given in favor of the petitioning creditors, and in December the court entered the order now complained of.
This being the situation, we are of opinion that the petition did not furnish the necessary support for an adjudication against No. 1. If the discharge of No. 2 is to be regarded as effective from February 18, 1915, the date of the adjudication, it is clear (at least, in legal intendment) that the debts proved against No. 2 were even at that date to be treated as discharged, and therefore that in May, 1915, the petition
Moreover, if No. 2 had assumed so much of the claims as had been originally contracted by No. 1, it remains to be said that this part had already been proved against Oliver and Montague, both as partnership No. 2 and as individuals, and had been discharged at latest on September 11, 1915; so that this part could not be used a second time against Oliver and Montague under the guise of proceeding against them as partners in No. 1. In brief, the claims supporting the petition now before us do not correctly set forth the facts, and we do not see how they can form the necessary foundation for an adjudication. Each claim consists' of two parts; the first part only (if either) being still due by No. 1, while both parts were owing by No. 2, one part by assumption and the other by original contract. With the second part the present bankrupts have nothing, to do, and therefore a claim founded on that part, and blended with a claim founded on the first part (which is a claim against a different debtor, and a claim already discharged against No. 2), could not be proved against the bankrupts now complaining. We think this confused proceeding should have been dismissed at the end of the trial.
The order of adjudication is reversed.
Reference
- Full Case Name
- In re ECLIPSE POULTRY CO. Appeal of PHILLIPS
- Status
- Published