431 F2d 569 Blankenship v. Citizens National Bank of Lubbock

431 F.2d 569

In the Matter of Royce E. BLANKENSHIP, Alleged Bankrupt, Appellant,
CITIZENS NATIONAL BANK OF LUBBOCK et al., Creditors, Appellees.

No. 28845 Summary Calendar.*
*Rule 18, 5th Cir., See Isbell Enterprises, Inc
Citizens Casualty Co. of New York, et al., 5 Cir., 1970, 431

F.2d 409, Part I.

United States Court of Appeals, Fifth Circuit.

Sept. 10, 1970.

Vernon O. Teofan, Ungerman, Hill, Ungerman & Angrist, Dallas, Tex., for appellant.

Fletcher L. Yarbrough, Dallas, Tex., D. Thomas Johnson, Lubbock, Tex. Marvin S. Sloman, Dallas, Tex., Charles L. Cobb, Lubbock, Tex., Jesse B. Heath, Jr., Dallas, Tex., for appellees, Carrington, Coleman, Sloman, Johnson & Blumenthal, Dallas, Tex., McWhorter, Cobb & Johnson, Lubbock, Tex., of counsel.

Before THORNBERRY, CLARK and INGRAHAM, Circuit Judges.


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This appeal arises from a contested involuntary bankruptcy proceeding, and is taken by the alleged bankrupt from a preliminary order of the district court overruling appellant's motion for additional statement of findings and transcript or resume of evidence, and accepting and approving the Referee's order granting the petitioning creditors leave to file an amended involuntary petition.


On February 9, 1968 appellees filed an involuntary petition in bankruptcy against the alleged bankrupt. This petition was duly referred to the Referee in Bankruptcy, and appellant subsequently filed a motion to dismiss the involuntary petition. Thereafter, appellees filed a motion for leave to amend their petition, to which appellant replied, contesting the right of appellees to file their amended petition, primarily on the ground that petitioning creditors are not bona fide creditors of the alleged bankrupt. The Referee granted petitioners' motion for leave to amend, and the alleged bankrupt filed a petition for review, whereupon the Referee prepared and transmitted to the clerk of the district court his certificate of review.


Appellant was dissatisfied with the Referee's certificate, and therefore filed with the district court a motion for additional statement of findings and a transcript or resume of evidence. The district court denied appellant's motion and approved the Referee's order granting the petitioning creditors leave to file an amended involuntary petition.


We agree with the district court's conclusion that the appellant's motion for additional statement of findings and transcript of evidence was without merit. We have examined the Referee's certificate and find it wholly adequate to satisfy the requirements of Section 39a(8) of the Bankruptcy Act. It is true that the Referee did not certify findings on each issue raised by the appellant in his motion to deny leave to amend, but the only pertinent issue on review was whether the Referee had abused his discretion in granting leave to amend, and this was the only issue upon which he was required to make findings. The other issues raised by the alleged bankrupt went to the merits of his motion to dismiss and were not ripe for a ruling by the Referee at this preliminary stage of the proceedings. Since the Referee stated clearly his reasons for granting leave to amend, his certificate was adequate, and the district court properly denied appellant's motion for additional statement of findings.


We are also in agreement with the district court's conclusion that the Referee did not abuse his discretion in granting the motion for leave to amend. It is well recognized that amendments are to be liberally granted and that only when there has been abuse of discretion does the appellate court exercise its powers of review. Collier on Bankruptcy P18.21 (14th Ed.) We have studied the record in this case, read the opinion of the district court and the opinion of the Referee, and we find no such abuse.