Blake v. Nesbet
| Decision Date | 13 November 1905 |
| Docket Number | 223. |
| Citation | 144 F. 279 |
| Parties | BLAKE et al. v. NESBET. |
| Court | U.S. District Court — Western District of Missouri |
Karnes New & Krauthoff, for complainants.
James H. Harkless, for defendant.
On the 21st day of June, 1905, the complainants presented and filed their bill of complaint in the above-entitled cause against Charles W. Nesbet, defendant. The bill of complaint recited that on her petition in voluntary bankruptcy Mary G. Nesbet doing business as W. E. Cannon & Co., was adjudged a bankrupt by this court; that on May 15, 1905, the complainants were duly elected and qualified as trustees in bankruptcy of said estate; that the said Mary G. Nesbet, within four months next preceding the filing of her petition in bankruptcy and the adjudication in bankruptcy, with the knowledge and consent of the defendant, Charles W. Nesbet, who was and is her husband sold and disposed of diamonds belonging to the bankrupt estate for $3,500; that this sale was made with the intent to hinder, delay, and defraud her creditors, and that, in furtherance of said purpose to hinder, delay, and defraud her creditors, she delivered to the defendant $3,500 in currency as the proceeds of said sale; and that the defendant, at the time of filing the bill, had in his possession and under his control the sum of about $2,830, and that he took and received the same with full knowledge that the same was in fraud of the bankrupt act; that the defendant makes claim of indebtedness of said bankrupt to him, and that said money was paid to him on account of such indebtedness. The bill further alleged that at the time of such transfer of said property to said defendant the said Mary G. Nesbet was insolvent, and that, if in fact (which fact is denied) the said bankrupt was indebted to the defendant in any sum, the said transfer and payment to him created a preference in favor of said defendant as a creditor of said bankrupt, within the contemplation of the bankrupt act. The bill further alleged that the defendant is wholly insolvent, and unless he should be restrained by the order of this court he would dispose of the currency in his possession, and would thereby withdraw the same from the administration of the bankrupt court, and that demand had been made upon him to pay said money over to the complainants as trustees in bankruptcy, which he had failed to do. The bill prayed that the defendant be decreed to hold the said property in trust for the complainants, and that he be decreed to deliver the same to them, and that pending the suit the court issue a provisional restraining order restraining the defendant from in any manner disposing of said sum of $2,830 in currency in his possession, and that he be commanded to hold said money and property subject to the further order of the court, and to order such money to be deposited in some safe place.
At the time of the presentation of this petition the defendant's counsel was present in court and had notice thereof, but did not enter appearance thereto. On the same day the court issued a restraining order, ordering that until the further order of the court the defendant be restrained from in any manner disposing of said sum of money or any other sum of money which might be in his possession the property of the complainants therein, and especially was he restrained and enjoined from disposing of any portion of the sum of $3,500 theretofore received by said bankrupt and delivered by her to the defendant. The defendant was directed to appear before the court at Kansas City, Mo., at 10 o'clock a.m., on the 26th day of June, 1905, to show cause, if any he had, why a temporary injunction should not issue. A copy of this order was served by Edwin R. Durham, United States marshal for this district, by delivering a true copy to the said Mary G. Nesbet, a member of the family over the age of 15 years of the said Charles W. Nesbet, at his usual place of abode in Kansas City, Jackson county, Mo., on June 21, 1905, and by delivering a true copy thereof to James H. Harkless and Clifford L. Histed and to Mary G. Nesbet on the 21st day of June, 1905, at Kansas City, Jackson county, Mo. The said Edwin R. Durham, in his individual capacity, also made return, sworn to on the 22d day of June, 1905, that he delivered a true copy of said restraining order to the said Charles W. Nesbet at Leavenworth, in Leavenworth county, state of Kansas, on the 21st day of June, 1905, at 9:45 o'clock p.m. The defendant made no appearance to said restraining order; and the same by its terms continues in force. A subpoena in chancery issued out of the clerk's office of this court on said bill of complaint on the 21st day of June, 1905, summoning the defendant to appear and answer to the bill of complaint on the first Monday of August, 1905, when subpoena was served on the 21st day of June, 1905, by delivering a certified copy of the same to Mary G. Nesbet, a member of the family over the age of 15 years of said Charles W. Nesbet, at his usual place of abode in Kansas City, Jackson county, Mo. On October 5, 1905, the defendant filed answer to said bill of complaint, taking issue upon the facts alleged fraudulent sale of said diamonds, and the fraudulent turning over to him of the money as alleged in the bill of complaint; but in fact admitting that he received the money, and set up a claim thereto on account of the indebtedness of his said wife or said firm to him.
On November 1, 1905, the complainants filed information in this court in said cause, charging that the defendant had disobeyed and disregarded the said restraining order of the court by disposing of all of said money in his possession at the time of making said restraining order, with the exception of $650, asking that the defendant be cited to appear before this court to show cause why he should not be punished for a contempt of court for disobedience of said order. Citation issued accordingly, and was duly served on the defendant, and on the 6th day of November, 1905, he made return thereto, and as a reason why he should not be punished as for a contempt in violating said restraining order pleaded that at the time of issuing said order the court did not, and does not now, possess jurisdiction of the person or subject-matter, for the reason that no legal service was ever had upon the defendant, for the reason that the alleged service of the restraining order was made upon the defendant outside of the state of Missouri, and that at the time the money and property sought to be restrained was beyond the limits of the jurisdiction of the state; second, that the restraining order was beyond the power and authority of the court to issue on the bill of complaint; third, because, on the face of the bill of complaint, it appears that any money in defendant's hands was paid over to him by the bankrupt prior to the filing of the petition in bankruptcy, and was paid over to him under a claim of right thereto, and because it appears that he is an adverse claimant to the fund in question. The return then alleges that the sum of $2,800 sought to be reached by the bill was turned over to him by the bankrupt long prior to the filing of the petition in bankruptcy, under the following conditions, to wit: That the sum of $1,724 thereof was money in the hands of W. E. Cannon & Co., held by them in trust for the use and benefit of the defendant, and the balance thereof was received by him in payment of wages due from said company to him for his services as a traveling salesman, and that he received it in good faith. A general allegation is made in the return that the complainants are seeking by this proceeding to abuse the process of the court in attempting to use the same for the purpose of collecting a civil debt. The informants have filed exceptions to this return.
The objection that service of notice of the...
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