Arthur Greey v. John Dockendorff
Decision Date | 15 December 1913 |
Docket Number | No. 544,544 |
Citation | 58 L.Ed. 339,34 S.Ct. 166,231 U.S. 513 |
Parties | ARTHUR GREEY, Trustee in Bankruptcy of Schwab-Kepner Company, Appt., v. JOHN E. DOCKENDORFF |
Court | U.S. Supreme Court |
Messrs. Benjamin G. Paskus, Ralph Wolf, James N. Rosenberg, and Garrard Glenn for appellant.
Messrs. Julius Henry Cohen, Gerard B. Townsend, and Theodore B. Richter for appellee.
This was a petition by the appellee, Dockendorff, filed in the bankruptcy proceedings against the bankrupt, the Schwab-Kepner Company, to have paid over to him the proceeds of accounts receivable alleged to have been assigned to him by the bankrupt. The defenses set up were that the assignment was a preference, and that it was made without present consideration, with intent to defraud creditors of the bankrupt concern. The case was referred to a special master, who found that it did not appear that either the petitioner or the bankrupt knew that the latter was insolvent at the time of the supposed preference, or that there were any transfers with intent to defraud creditors, and found for the petitioner. His finding of facts and conclusion were concurred in by the district court and circuit court of appeals. 121 C. C. A. 597, 203 Fed. 475.
A part of the appellant's brief is devoted to the attempt to show that the findings below as to insolvency and the knowledge of the parties was wrong, and a distinction is urged between what are called the master's inferences and the facts upon which those inferences were based. But no sufficient reason is shown for departing from our ordinary rule, where the master, the court of first instance, and the circuit court of appeals, have agreed, and in the course of the hearing this was admitted. Merillat v. Hensey, 221 U. S. 333, 55 L. ed. 758, 36 L.R.A.(N.S.) 370, 31 Sup. Ct. Rep. 575, Ann. Cas. 1912D, 497. On the other side it is argued that this is not a controversy arising in bankruptcy proceedings within § 24 of the bankruptcy act, and that therefore the appeal should not have been allowed. This contention, if open, seems to be answered sufficiently by Knapp v. Milwaukee Trust Co. 216 U. S. 545, 54 L. ed. 610, 30 Sup. Ct. Rep. 412. But the appellant's main proposition is that the transactions with the appellee were fraudulent in law, however unconscious of it the parties may have been, and so it is necessary to make a short statement of the facts.
The bankrupt, a New Jersey corporation, did business in New York as a cotton converter. It bought raw material from the mills, ordered it sent to bleacheries designated by it, sold the goods when finished, and had them shipped from the bleacheries to the buyers. Dockendorff, on favorable statements of the company's condition, made successive agreements to procure loans not exceeding $175,000 at any one time, the bankrupt giving demand notes, assigning as security all its accounts receivable thereafter to be created, and paying certain commissions. In May, 1910, the agreement now in question was made. By this the bankrupt was to assign within seven days after shipment the accounts receivable of credit sales made by it; upon that security Dockendorff was himself to lend 80 per cent of the net face value of such as he should approve, less commissions and discounts, up to $175,000; the bankrupt was to give its notes, deliver the shipping documents, furnish evidence of actual receipt of the merchandise when required, notify Dockendorff of any return of goods or counterclaims, deliver the proceeds of such accounts as were proper, and permit him to examine its books and correspondence, etc.; Dockendorff's lien was to...
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