11 F. Cas. 38 | S.D.N.Y. | 1878
November 30, 1S72, on the petition of George W. Wundrum, praying that he and his alleged partner, John Griffith, composing the firm of Griffith & Wundrum, be adjudicated bankrupts, they were so adjudicated, and the case has proceeded regularly ever since; an assignee having been appointed, assets converted into money, and in whole or in part distributed. The petitioners, Van Dolsen and Arnot, by petition dated March 28, 1878, allege that they are creditors of the firm and have never proved their debt; that the firm consisted of Griffith, Wundrum, and one Abendroth; that the petitioners were ignorant of that fact till shortly before the time of filing their petition; that at the time of the commencement of the bankruptcy proceedings, and till long afterwards, Abendroth was believed to be a special partner and not a general partner; that in a suit brought in the superior court, which came to trial and decision in 1874, it was shown that Abendroth had not complied with the provisions of the law relating to limited partnerships, in respect to the time and manner of paying in his capital, and that he was held to be in fact a general partner; that this decision has been affirmed by the court of appeals, and petitioners allege that Abendroth was a general partner, and they pray that the adjudication be vacated on the ground that the court has no jurisdiction over copartnerships, unless all the co-partners are made parties and adjudicated, and therefore that the court had no jurisdiction in this case.
Assuming that all the facts relied on are as claimed by the petitioners, still they cannot claim as of right, as creditors of the firm, to have the adjudication set aside. Assuming that the court has jurisdiction only over all the copartners and not over some of them less than all, still the court had power and authority, in other words had jurisdiction, to entertain and determine the question what persons in fact did constitute the firm. The fact that Griffith & Wundrum alone did constitute the firm was alleged in the petition, and was necessarily found and determined by the court, before it could or did determine that the adjudication should be made. This was tlie determination by the court, in the due and proper exercise of its jurisdiction, of a fact. Now, although that fact may be called a jurisdictional fact, nevertheless the rule of law is. that the determination by the court of a fact, though a jurisdictional fact, is binding on all parties to the suit and on all those who had an opportunity to be heard to contest that fact. Dyckman v. City of New York, 5 N. Y. 434; and see Chemung Canal Bank v. Judson, 8 N. Y. 254.
Although a case in bankruptcy is anomalous and peculiar in its forms, I think that the creditors of the firm are bound as parties by this determination, and are within the application of the principle above stated. The proceeding is against the firm’s property and for the benefit of the firm’s creditors. While they do not receive notice of the original application, they are made parties to the proceeding in form immediately afterwards, and are notified to come in and participate therein. No doubt if they have any interest adverse to the adjudication and promptly apply for relief before other rights intervene, they may have an adjudication set aside on the ground that the court erred in determining the jurisdictional fact. This would be almost a matter of course upon an immediate application, but until the proceeding is thus opened and the fact re-determined, the judgment of the court stands and must stand as against all parties and all persons allowed to come in and be made parties; nor do I see how a mere stranger to the proceeding, if these creditors claim to be such, can have any standing in this proceeding itself to have such determination set aside.
The ground taken that the adjudication is in itself absolutely void is not tenable. It is a judgment of a court, based upon the determination of a fact which it had jurisdiction to determine, and as such it is valid until set aside or reversed. The court may open the judgment and rehear the case on suggestion of error, on the application of a party, and possibly on the application of a stranger, if he shows that he is injured thereby, and the application can be granted without prejudice to the. rights and interests of others, but such an application, like any other application to open and rehear a case, is addressed to the discretion of the court.
In the present case it would clearly not be a proper exercise of that discretion to grant this application. There is no suggestion of fraud in the obtaining of the original adjudication. Griffith, Wundrum, Abendroth, and, so far as appears, all the creditors of the firm at the time of that adjudication, understood and believed that Abendroth was a special and not a general partner. Among others these creditors, though apprised of the action taken, rested upon and acquiesced in it, taking no measures, so far as appears, to investigate the fact. Afterwards other creditors, suspecting or having information of facts tending to show that Abendroth was a general partner, sued him, and in 1S74 had disclosed in trials of their actions those facts. It cannot be said therefore that the facts tending to show that he was a general partner were so hidden and undiscoverable that creditors could not by diligence ascertain