The opinion of the court was delivered by: LUONGO
Before me are petitions to review orders of the Referee in Bankruptcy allowing two claims, but subordinating them to the claims of all other creditors. A creditor, joined by the Trustee, objects to the allowance of the claims. The claimants object to their subordination.
In 1923, the predecessor of the bankrupt was founded as a sole proprietorship by decedent, Paul C. Calissi. Thereafter the sole proprietorship became a partnership between Calissi and trustees for his two minor sons. In 1949, the business was incorporated and stock was issued to Calissi and to the trustees for his sons. In 1955, Paul C. Calissi died, leaving his estate, including the stock in the corporation, to his widow, Louise (named executrix under the will), to his son, Paul A. Calissi, and to his two stepsons, Robert and Raymond Corsini.
At the time of his death, decedent was the owner
of real estate at 5420 Pascall Avenue in Philadelphia where the business of the bankrupt had evidently been conducted since 1952. These premises formed part of the estate left by Calissi to the persons above-named.
After decedent's death, his widow, son, and stepsons continued to operate the business with declining fortune until finally an involuntary petition in bankruptcy was filed against the corporation on May 15, 1963.
Louise C. Calissi, as executrix of the estate of Paul C. Calissi, filed with the Referee in Bankruptcy a general or unsecured proof of claim (Claim No. 77) in the amount of $54,919.79 for loans made to the bankrupt by decedent during his lifetime and by his estate after his death. These loans were allegedly evidenced by a promissory note.
Paul A. Calissi, Robert Corsini, Raymond Corsini, and Louise C. Calissi, as owners of the real estate above-mentioned, filed a proof of claim (Claim No. 76) for rent, asserting priority for three months' rent totalling $2,400 and a general claim for the balance of rent due in the amount of $5,771.26. The claim for rent was pursuant to an alleged written lease.
A creditor, joined by the Trustee, objected to the allowance of these two claims, contending they had not been properly proved. Claimants, on the other hand, seek review of the Referee's order subordinating
the claims to those of all other general creditors.
To be entitled to share in the distribution of a bankrupt estate, a claim must be provable under § 63 of the Bankruptcy Act (11 U.S.C.A. § 103); actually filed and proved under § 57 (11 U.S.C.A. § 93); and allowed under § 2 (11 U.S.C.A. § 11). Where claims are based on written instruments, those instruments must be attached to the claim or "* * * [if] such instrument is lost or destroyed, a statement of such fact and of the circumstances of such loss or destruction [must] be filed under oath with the claim." § 57, sub. b (11 U.S.C.A. § 93, sub. b).
In the instant case, both the lease and the promissory note upon which the claims were based were destroyed by a fire in the office of claimants' attorney. Affidavits setting forth the circumstances of the loss or destruction of those instruments were duly filed by claimants' attorney. Notwithstanding the affidavits, the Referee ruled that the claims were not self-supporting and additional evidence was adduced by the claimants.
The claim of the executrix for $54,919.79 representing loans to the bankrupt was sufficiently proved. In addition to the proof of claim and the accompanying affidavit hereinabove referred to, there was testimony by Paul A. Calissi that such loans were in fact made, and audit reports prepared by bankrupt's accountants reflected all such loans.
The argument that claim No. 77 was not proved is based in large measure upon the fact that an Account of Adjudication filed by the executrix, Louise C. Calissi, in the Orphans' Court of Delaware County, contained no reference to the loans. This evidence was before the Referee for his consideration. In determining that the disputed claim was satisfactorily proved, he obviously resolved the disputed testimony ...