Baden v. Bertensraw

• Citation: 68 Kan. 32,74 P. 639
• Decision Date: 12 December 1903
• Docket Number: 13,290
• Parties: HENRY BADEN v. JOHN BERTENSRAW, as Trustee, etc
• Court: United States State Supreme Court of Kansas

74 P. 639

68 Kan. 32

HENRY BADEN v. JOHN BERTENSRAW, as Trustee, etc

No. 13,290

Supreme Court of Kansas

December 12, 1903

Decided July, 1903.

Error from Montgomery district court; THOMAS J. FLANNELLY, judge.

Judgment reversed and cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1. PRACTICE, SUPREME COURT -- Assignments of Error. Rulings of a trial court not assigned as error in the petition in error will not be considered by this court.

2. PRACTICE, DISTRICT COURT -- General Objection to Evidence Waived. An objection to the introduction of any evidence under the petition because of the omission of the allegation of certain material facts is waived if evidence be introduced on the trial to prove such facts without objection.

3. BANKRUPTCY -- Preferential Payment. An action by a trustee in bankruptcy to recover an alleged preferential payment made by the insolvent is not an action to recover on the ground of fraud.

4. BANKRUPTCY -- Recovery of Preferential Payment --Conditions Precedent. Before a trustee in bankruptcy can recover an alleged preferential payment to a creditor he must prove that the payment was made within the time prohibited by the statute; that it was intended as a preference; that the person receiving it had reasonable ground to believe that it was so intended; and that the effect of such payment was to enable such creditor to obtain a greater percentage of his debt than other creditors of the same class.

J. B & W. E. Ziegler, for plaintiff in error.

F. J. Fritch, for defendant in error.

GREENE J. All the Justices concurring.

OPINION

GREENE, J.:

John Bertenshaw, as trustee in bankruptcy of the firm of Ridgeway & Co., brought this action against Henry Baden to recover the sum of $ 183.50 alleged to have been paid to him as a preferential payment within four months before the filing of the petition in bankruptcy. Judgment was for plaintiff.

Many errors are assigned and argued by plaintiff in error, some of which are not assigned in the petition in error. It is argued that the court erred in overruling the demurrer to the petition. This is not assigned in the petition in error and therefore will not be considered. (National Bank v. Jaffray, 41 Kan. 691, 19 P. 626; Clark v. Schnur, 40 id. 72, 19 P. 327; Carson v. Funk, 27 id. 524.)

It is contended that the court erred in not sustaining the objection to the introduction of evidence under the petition for the reasons that it was not alleged that a demand had been made on the defendant prior to commencing action, or that any claims were proved or allowed against the estate, or that the money paid to Baden was necessary to pay any of the debts which had been proved or allowed against the estate. If it was necessary for plaintiff to make these allegations, the defendant has waived any questions arising from such omission that he might have presented here by permitting the plaintiff, without objection, to introduce evidence tending to prove such facts.

The petition shows that more than two years intervened between the time of the alleged preferential payment and the time this action was brought. It is contended that the action was one for relief on the ground of fraud, and therefore the petition did not state a cause of action. This action is provided for by the bankrupt law, and fraud is not made an essential element to a recovery. The provisions of the bankrupt law pertinent to a decision of this and some other questions involved are sections 60a and 60b. (30 U.S. Stat. at L. 562.)

"A person shall be deemed to have given a preference if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.

"If a bankrupt shall have given a preference within four months before the filing of a petition, or after the filing of the petition and before the adjudication, and the person receiving it, or to benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person."

A preferential payment to a creditor by an insolvent debtor is not per se fraudulent, and the right of the trustee to recover such payment into the estate is not, by the bankrupt...