In re Gill
| Decision Date | 14 October 1911 |
| Docket Number | 112,113. |
| Citation | 190 F. 726 |
| Parties | In re GILL. In re FARMERS' & MANUFACTURERS' BANK OF RICH HILL, MO. |
| Court | U.S. Court of Appeals — Eighth Circuit |
(Syllabus by the Court.)
A response by a bank to an order of a referee to show cause why it should not pay over to the trustee $3,424.60 deposited with it by the bankrupt three days before the filing of the petition in bankruptcy, that the money was deposited without solicitation or agreement in a longstanding general deposit account which the bankrupt had with the bank subject to check and that at the time of the deposit the bankrupt owed the bank on an overdraft and on past-due notes $3,153.20, which it claims to offset against its liability to the bankrupt and the trustee, states an adverse claim and a good plea to the jurisdiction of the referee and the District Court summarily to determine the validity of that claim under section 23b of the bankruptcy law (Act July 1, 1898, c. 541, 30 Stat. 552 (U.S. Comp. St. 1901, p. 3431)).
An order overruling such a plea in the absence of a denial of any of its averments and without the framing, investigation or decision of the issue whether the adverse claim pleaded thereby is substantial or colorable presents no question of the manner or extent of the summary investigation of that question permitted to the bankruptcy court or the referee.
The only question it presents is whether or not the facts set forth in the plea, if true, show that the District Court and the referee are without jurisdiction summarily to try and determine the controversy between the trustee and the adverse claimant.
Adrian F. Sherman, for petitioner in No. 112, and for respondent in no. 113.
George Templeton, J. R. Hales, Frank W. Yale, and Ernest S. Ellis for petitioner in No. 113, and for respondent in No. 112.
Before SANBORN, Circuit Judge, and MARSHALL and WILLIAM H. MUNGER District Judges.
In October, 1910, the trustee in bankruptcy of the estate of Mrs. Susan L. Ames presented to the referee a petition in which he alleged that on April 20, 1910, three days before the petition in bankruptcy was filed, Mrs. Ames sold her stock of merchandise for $3,424.60 and deposited the proceeds in the Farmers' & Manufacturers' Bank of Rich Hill Mo., as a special deposit to be distributed pro rata among her creditors; that this money was still in the possession of the bank; that he had demanded it, but the bank refused to pay it to him, and he prayed that the bank might be ordered to show cause why it should not pay this $3,424.60 over to the trustee. The referee granted his prayer, and, in response to the order to show cause, the bank filed a verified answer wherein it denied that the $3,424.60 was deposited with it by Mrs. Ames as a special deposit to be distributed pro rata among her creditors, and alleged that Mrs. Ames had for many years had a general deposit account with the bank in which she deposited moneys from time to time and against which she drew her checks; that on April 20, 1910, she owed the bank on account of an overdraft of $80.70, and on account of her five past-due promissory notes, which were described, $3,153.20 and interest; that on that day, without any solicitation, contract, agreement, or special terms, she deposited her $3,424.60 to the credit of her general account in the bank subject to her check, and that the bank had and claimed the right to set off against its indebtedness for the $3,424.60 Mrs. Ames' indebtedness to it for $3,153.20 and interest under section 68a of the bankruptcy law (Act July 1, 1898, c. 541, 30 Stat. 565 (U.S. Comp. St. 1901, p. 3450)); that under this state of facts it was an adverse claimant, and neither the referee nor the District Court had jurisdiction summarily to hear and decide the controversy between it and the trustee. No challenge by reply or otherwise of the averments of the plea was filed, and on these two pleadings the referee considered whether or not he had...
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