J. O. Terry & Sons v. Their Creditors

The opinion of the- Court was delivered by Eenner, J. The commercial firm of J. 0. Terry & Sons and the individual members thereof, J. O., 0. F. and W. S. Terry made a cession of property to their creditors, and filed schedules of their firm and individual assets and liabilities respectively. A meeting of their creditors was held, at which there were two candidates for syndic, and it appears from the notary’s proees verbal that, of the entire number of creditors voting, including firm and individual creditors, forty-six creditors representing $11,000 voted for J. W. Stockton, and thirty-three creditors representing $14,500 voted for J. S. Hodgins. The proees verbal thus showed on its face that no one had received the majority in number and amount requisite to the election of a syndic. No objection was made at tbe meeting to tbe reception of any of the-votes cast except to that of A. Bradley, an individual creditor of O. F.. Terry for $9000, against the admission of which a protest was made16 before the notary on grounds fully stated therein and hereafter to be considered. If this vote were rejected, Stockton received a clear -majority in number and amount of the votes and was duly elected. Thejn-ocis verbal was filed in court on April 17, 1885. On the same day Stockton took a rule on Hodgins, Bradley and the .insolvents to show cause why the vote of Bradley should not be stricken from the proees verbal and why ho, the mover, should not bo decreed to be the duly elected syndic. On April 21, Stockton filed a regular opposition to the homologation ■of the proees verbal on the same ground, and praying that it be -amended by striking out Bradley’s vote and thereupon decreeing his ■own election as syndic. No other opposition was ever filed to the proees verbal, and the jurisprudence is well settled that, except so far as opposed, theyiroces verbal became absolute, without any formal homologation, Goodale vs. Creditors, 8 La. 125; Gouy vs. Creditors, 2 La. 358; Pandelly vs. Creditors, 9 La. 387; Gwartney vs. Creditors, 13 Ann. 188. The rule taken by Stockton went regularly to trial. No written ■answer thereto was filed. It is admitted that no question was raised ■or submitted in the lower court except the validity of Bradley’s vote. The court, holding the vote to have been properly received and counted, rejected Stockton’s demand, discharged the rule and appointed the ■civil sheriff of the parish as syndic; from which judgment Stockton jirosecutes the present appeal. The only appellees appearing by counsel in this Court are the insolvents. They almost abandon the question raised in the lower court as to the validity of Bradley’s vote, and claim the affirmance of the judgment on entirely different grounds. Tims they say that the proees verbal shows that a large number of •■the votes were cast by proxies whose affidavits as to the debts were not made of their own knowledge. We fully adhere to the doctrine heretofore affirmed that the law requires proxies, in making the required oath to the debt, to swear of their own knowledge and not merely of their belief or from merely derivative knowledge. Phillips vs. Creditor, 36 Ann. 904; Pandely vs. Creditors, 9 La. 393. Had the. votes been opposed on this ground, either before the notary ■or by opposition to the proees verbal within ten days, the opposition would have been successful. But it is unquestionably too late to raise ■such objections after the lapse of ten days from the filing of the proeés [17] verbal. The dictum. in Pandely vs. Creditors that such illegal votes must be struck out has no application, because in that case the issue was distinctly raised by timely opposition. Nor is the defect of a character such as to render the proceedings void on their face, and therefore mill without opposition, under thedietum in Goodale vs. Creditors. The nullified homologation resulting from the lapse of the ten days-is as much res judicata as if this defect had been urged in an opposition, and overruled. We conclude, therefore, that even had this point been raised before-the lower judge, he would have rightly disregarded it. It only remains to consider whether the objections to the reception) and counting of Bradley’s vote were well founded. We think they were. On his own showing he was not a creditor of O. E. Terry. He-had signed notes for the accommodation of Terry, which had been, passed to D. C. McCan & Son, who now hold them. Terry was and is-bound to hold him harmless against any liability on said notes, and should he jtay them, he would undoubtedly be a creditor of Terry ^ but, until lie pays them, he is not a creditor. 2d Daniel’s Neg. Instr- §§ 1889 et seq. He has not paid them; and although McCan & Son have obtained1 judgment against him on one of the notes, they have been unable to find any property on which execution could be levied or any means of' enforcing payment, and the evidence exhibits no probability of their ever being able to do so. The vote of Bradley should be expunged. This leaves Stockton with a clear majority, number and amount of firm and individual creditors, and gives him a clear right to the appointment as syndic. This relieves us from the consideration of questions raised as to the relation of partnership and individual creditors. The firm creditors are unquestionably creditors of the individuals, and so counted,1 Stockton has a majority in number and amount of the creditors of the firm, and of each individual member. It is, therefore, ordered, adjudged and decreed that the judgment appealed from be annulled, avoided and reversed; and it is now ordered and decreed that the rule herein taken be made absolute; that G. W. Stockton be declared the duly elected syndic of the creditors of the insolvent, and entitled to be appointed and confirmed as such in conformity to law7, and that this case be remanded to the lower court with-instructions to make the orders and take the other steps requisite for the execution of this decree, appellees to pay costs of rule and of this-appeal.