Armstrong v. Fernandez/Opinion of the Court

This is an appeal from a court of bankruptcy, 'not within any organized circuit of the United States,' from a judgment adjudging Pascasio Alvarado a bankrupt under § 24a and § 25a of the bankruptcy act, and general order 36, ¶3.

The errors assigned in reference to the action of the referee and of the court in permitting the amendment of the verification and other amendments we regard as without merit. The power of a court of bankruptcy over amendments is undoubted and rests in the sound discretion of the court. We think there was no abuse of discretion here, and that the court was fully justified in its orders in reference to amendments.

Nor do we see any reason to question the conclusion of the district court 'that the defendant was not a 'wage-earner or a person chiefly engaged in the tillage of the soil,' but that he was, and is, a merchant, and that all the debts he owes were created as a merchant, and that he could therefore be declared a bankrupt.'

The appellant, Armstrong, now contends, however, that the petitioning creditors 'lost sight of every controversy except that as to the occupation of the bankrupt, and that the court later also made the same error, as there is neither finding nor evidence that the alleged bankrupt had committed either act of bankruptcy alleged, or any act of bankruptcy whatever.'

The acts alleged were that Alvarado permitted Armstrong to obtain an execution against him; and also that Alvarado admitted in a letter addressed to Fernandez 'his inability to pay his debts, and his willingness to be adjudged a bankrupt on that ground.'

And the record shows that the court heard testimoy on behalf of Fernandez and others, petitioning creditors as, to the commission of the acts of bankruptcy as well as to the occupation of the bankrupt. The court then denied Armstrong and others' motion to dismiss, and heard testimony on their behalf, and at the conclusion of all the testimony directed the order of adjudication. From that order of adjudication this appeal was prayed, but it nowhere appears that Armstrong and others objected to the want of proof of the acts of bankruptcy, or asked any findings in respect thereto, or objected to the findings that were made for deficiencies in that regard. In other words, Armstrong and others permitted the findings to be made as they were, and now say that other findings should have been made in relation to proof of acts of bankruptcy, without having objected that they were not made, or that the findings as made were, on that account, fatal to the judgment. The presumption is that if such a suggestion had been made to the court, the alleged deficiencies, if really existing, could have been supplied and would have been supplied. But the record and the certificate of the judge leave no doubt that the petition as to asts of bankruptcy was sustained by the facts.

The last error assigned is that the district court erred in finding from the evidence offered on July 19, 1906, 'upon the issue between said petitioning creditors and these opposing creditors, that said Pascasio Alvarado should be adjudged a bankrupt, and in so adjudging him,' and that, of course, was broad enough to cover any question involved upon the evidence; but we think that that was intended to cover the finding as to Alvarado's being a merchant, and not a wage-earner, etc., and therefore susceptible of being declared a bankrupt.

The findings of fact and conclusions of law made by the district judge for transmission to this court, under the general order in that regard, set forth, among other things, that, after the petition was amended, 'then the question as to whether or not the defendant was a person 'engaged chiefly in agriculture or the tillage of the soil' was raised by Armstrong & Company, and on the decision of which would depend the right of the court to declare him a bankrupt at all. On this question the court gave the parties opportunity to procure evidence, and set the case down for a succeeding day for that purpose, and did, at the time fixed, hear evidence pro and con on the subject.' And from that evidence the court stated the facts which appeared, and his finding and conclusion that Alvarado was a merchant, etc.

It seems clear that the acts of bankruptcy had been previously determined as committed, and that the case was only contested on the other point, and hence that this contention is an afterthought, which ought not to be entertained, let alone that from the findings that were made it is obvious enough that Alvarado was in liquidation and might properly be adjudged a bankrupt.

Decree affirmed.