In re Denson
Decision Date | 11 April 1912 |
Docket Number | 1,802. |
Citation | 195 F. 854 |
Parties | In re DENSON. In re KINNEY et al. |
Court | U.S. District Court — Northern District of Alabama |
J. B Brown and A. A. Griffith, for petitioners.
E. W Godbey and J. M. Kilpatrick for trustee.
This is a petition to review the order of the referee requiring E. C Kinney and Talmage Kinney to restore to the trustee property or the proceeds thereof, alleged to have been received by them from the bankrupt by a fraudulent transfer after the filing of the petition in bankruptcy.
The fraudulent character of the sale of the goods by the bankrupt to Talmage Kinney, who was acting for E. C. Kinney in making the purchase, is not disputed, and it abundantly appears that Talmage Kinney had knowledge of facts that charged him with knowledge of its fraudulent nature. The transfer or sale was therefore voidable at the option of the trustee by an appropriate proceeding. The inquiry which requires consideration is whether a summary petition in the bankruptcy cause or a plenary suit was the appropriate proceeding.
The evidence is without conflict that the bankrupt prior to the filing of the petition had removed the goods in controversy from his store in Cullman to a storehouse about two miles from that place, and had made a sale to one Walker, who, becoming crippled, repudiated the purchase, and at the time of the filing of the petition was holding the property as the bailee of the bankrupt. After the filing of the petition, the bankrupt made the sale to Kinney, and Kinney then took possession of the goods and intermingled them with his own stock in a store he was operating in Cullman, and at the time of the filing of the summary petition against him had sold a part of the goods and still had a part in his possession.
The contention of the petitioners is that they are adverse claimants, and could only be proceeded against in a plenary suit. If the sale and delivery of the goods had preceded the filing of the petition in bankruptcy, this position would be unassailable. On the contrary, the evidence shows without conflict that the sale and delivery occurred after the filing of the bankruptcy proceeding, and at the time of filing the possession of the goods was with the bankrupt through his bailee. In view of this fact, the question of the jurisdiction of the bankrupt court in a summary proceeding is ruled by the cases of Bryan v. Bernheimer, 181 U.S. 188, 21 Sup.Ct. 557, 45 L.Ed. 814, Mueller v. Nugent, 184 U.S. 1, 22 Sup.Ct. 269, 46 L.Ed. 405, Babbitt v. Dutcher, 216 U.S. 102, 30 Sup.Ct. 372, 54 L.Ed. 402, 17 Ann.Cas. 969, Acme Harvester Co. v. Beekman Lumber Co., 222 U.S. 307, 32 Sup.Ct. 96, 56 L.Ed. . . . , rather than by the cases of Bardes v. Hawarden Bank, 178 U.S. 524, 20 Sup.Ct. 1000, 44 L.Ed. 1175, and Jacquith v. Rowley, 188 U.S. 620, 23 Sup.Ct. 369, 47 L.Ed. 620.
In the case of Babbitt v. Dutcher, 216 U.S. 102-113, 30 Sup.Ct. 372, 377, 54 L.Ed. 402, 17 Ann.Cas. 969, the court distinguished the two classes of cases and the respective remedies for each, as follows:
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