In re Dennery

Garoutte, J.— This is an appeal from an order of the superior court of Sacramento County adjudging appellant an insolvent debtor upon petition of his creditors. In the lower court a demurrer was interposed, which was overruled. The defendant then answered, setting up, among other things, a failure by the petitioning copartnership firms to make, file, or publish any certificate of their copartnership. Petitioners’ demurrer to the answer was sustained, and an amended answer was filed, and the matter was heard upon the petition and amended answer. The demurrer to the petition was properly overruled. The petition sets forth every fact required to be set forth by section 8 of the Insolvent Act, and in addition alleges that the petitioners are creditors of the said Dennery, and the nature of their respective demands is as follows: “ The demand of said G. L. Jones & Co. is for $206.25, United States gold coin, and accrued for goods, wares, and merchandise sold and delivered, at San Francisco aforesaid, by them to said respondent, within one year last past, at his request.” The claims of the other petitioners are set out in the same manner. We think the foregoing statement sufficient. “ Insolvency proceedings in bankruptcy are not in any sense proceedings merely for the collection or security of the particular demand of the petitioning creditors. They are for the benefit of all the creditors. The fact that the petitioning creditor has a provable debt of the requisite amount is necessary to be shown for two purposes only. The first, to show that the alleged debt occupies that relation; second, that the petitioner has the requisite qualification to commence the proceeding. [105] Its office is then exhausted, and it has not, and is never given, any other force or effect. (In re Sheehan, 8 Bank. Reg. 245.) The form of the petition in the case at bar is practically the same as found under the United States bankrupt act, and which is designated “Form No. 54.” (Bump’s Bankruptcy, 9th ed., 933.) A creditor who can file a petition for involuntary bankruptcy is one whose demand is provable under the act. (Phelps v. Classen, 3 Bank. Reg. 87.) Section 37 of the Insolvency Act provides that all debts not payable until a future time may be proved against the estate of the debtor; hence it follows that a creditor may join in the petition, although his demand is not yet due. And for these reasons it does not appear necessary to allege, in the petition of insolvency, a breach of the insolvent’s contract, namely, that the debt is due and unpaid; but be that as it may, these petitioners each allege a demand against the insolvent, and set out the nature of it, which would seem to be ample to put the insolvent upon his defense. In the case of Campbell v. Judd, 7 West Coast Rep. 372, the court held the petition sufficient, where the facts alleged as to the nature of the demand were much more meager than in the present case. The case of In re Russell, 70 Cal. 132, cannot be held to overrule Campbell v. Judd, 7 West Coast Rep. 372, but, upon the contrary, seems to cite it with approval. The facts alleged in that case were far more meager than were found in Campbell v. Judd, 7 West Coast Rep. 372, and the petition was clearly fatally defective. The insolvent should have an opportunity to deny and contest the claims of petitioning creditors prior to an adjudication of his insolvency, and it is equally true that he should have notice of the facts on which the claims of indebtedness are based, in order to properly make such contest; and when those facts are stated, the requirements [106] of the statute are satisfied, even under the principle laid down in In re Russell, 70 Cal. 132. As to whether the facts set out in the petition are sufficient upon which to recover in an action for the indebtedness, it is unnecessary to decide. As to the point raised by the demurrer, that the petition fails to state the names of the members of the firms petitioning, the facts are to the contrary, and, again, this court has already decided it has no merit. (Campbell v. Judd; In re Russell, supra.) The demurrer to the answer was properly sustained. Sections 2466 and 2468 of the Civil Code, providing that partnerships doing business in this state under a designation not showing the names of the partners in such business must file a certificate with the clerk, etc., or shall not be allowed to maintain an action, etc., is not applicable to the signers of a petition in involuntary insolvency. A proceeding in insolvency is not an action as defined by section 22 of the Code of Civil Procedure, but is in the nature of a special proceeding, and is included within section 23 of that code. Section 2468 of the Civil Code has been so strictly construed by this court that it has been held not to apply to actions for tort. (Ralph v. Lockwood, 61 Cal. 155.) It does not by express terms include special proceedings, and the court will not, by intendment, enlarge the inhibition for the purpose of defeating a remedy to which the party otherwise would be entitled. It is urged that the California Jewelry Company cannot be a petitioning creditor, because one member of the firm resides in Germany. It is a copartnership doing business in this state, and three members of the firm reside here. We have already held that it is not necessary to set out the names of the members composing the firms in order to constitute a valid petition, and not necessary to file the certificate required by the Civil Code in order to give a partnership the right to petition; and the mere [107] non-residence of one of the partners should certainly not defeat the right of the firm to become, a petitioning creditor. The firm is regarded as an entity, and when the statute speaks of the petitioners being residents of this state, it must be construed with reference to the person who may be a.petitioner. A copartnership composed of four persons, as in the case of the California Jewelry Company, must be regarded as a resident within the meaning of the statute, when its business is carried on in this state and three of its members are residents of this state. The authorities cited by appellant have been carefully examined, and do not overthrow the foregoing views. Let the judgment be affirmed. De Haven, J., Paterson, J., McFarland, J., and Beatty, C. J., concurred.