Bramble v. Brett

• Decision Date: 24 February 1916
• Docket Number: 4472.
• Citation: Bramble v. Brett, 230 F. 385 (8th Cir. 1916)
• Parties: BRAMBLE v. BRETT. In re STALCUP.
• Court: U.S. Court of Appeals — Eighth Circuit

230 F. 385

BRAMBLE v. BRETT.

In re STALCUP.

No. 4472.

United States Court of Appeals, Eighth Circuit.

February 24, 1916

D. H Wilson, of Vinita, Okl., for appellant.

J. F Brett, of Muskogee, Okl. (Pfendler & Brown and Hartsell &amp Mack, all of Muskogee, Okl., on the brief), for appellee.

Before SANBORN and CARLAND, Circuit Judges, and TRIEBER, District judge.

SANBORN Circuit Judge.

This is an appeal from an order disallowing a claim against the estate of a bankrupt made by a trustee for creditors to recover expenses incurred and services rendered by him before the bankruptcy, upon this state of facts: On November 12 1914, Stalcup, an insolvent merchant, met his creditors and pursuant to an agreement among them made a trust deed of substantially all his property to H. W. Bramble, the claimant and appellant, in trust, to take possession of and sell his merchandise in the regular course of business, to replenish the stock from the proceeds of the sales, to collect his book accounts, to pay from the proceeds of the sales dividends pro rata, to pay all his creditors and in case such creditors should not be paid in full by March 12, 1915, then to advertise and sell all the remaining property, to distribute the proceeds, after paying expenses of administration, among the creditors pro rata, and to turn over the surplus, if any, to Stalcup. On November 12, 1914, Bramble took possession of the property and of this trust deed, made an inventory thereof, and on November 21, 1914, while he was proceeding to sell some of the merchandise in the regular course of business, Stalcup forcibly evicted him from the premises and took possession of the property. Thereupon Bramble immediately employed an attorney and obtained a restraining order from a court forbidding Stalcup to interfere with his management of the property, when, on November 25, 1914, on the voluntary petition of Stalcup, he was adjudged a bankrupt and the property passed into the custody of the bankruptcy court. To that court Bramble presented a petition to be allowed and paid out of the proceeds of the estate of the bankrupt, before their distribution to creditors, $116.10 for his services as trustee before the bankruptcy, $100 for the services of his attorney, the expenses of taking the inventory and running the business, and $483.87 for merchandise which he had purchased from the Ratcliff-Sanders Grocer Company to replenish the stock. The referee and the District Court denied his petition and refused to allow him anything, upon the ground that the trust deed was a general assignment for the benefit of creditors and was void as to creditors on account of its failure to conform to the laws of the state of Oklahoma.

The reasons why it is insisted the trust deed did not conform to the laws of the state of Oklahoma and was consequently void as to creditors are that it was an assignment for the benefit of creditors, and (a) that it was acknowledged before a justice of the peace who had no official seal, when it could be legally acknowledged by an officer having an official seal only. Revised Laws of Oklahoma 1910, Sec. 1181. But no acknowledgment was requisite to its validity between the assignor and the assignee (Revised Laws of Oklahoma, c. 4, Secs. 218, 223, 224, and sections 1154 and 4036), and being valid between them it was valid against all the creditors who did not object to it, and the evidence is conclusive that no creditor made any objection to it while Bramble was acting under it. Conceding that the assignment might have been avoided by an objecting creditor, it was not void. There was nothing in it to which the debtor, the trustee and every creditor might not lawfully have bound himself by his agreement or consent. It was, therefore, valid between the assignor and assignee and voidable, but not void, as to creditors. As to the latter it was valid until avoided by them, not void until validated by them, and as no creditor avoided it or took any steps to avoid it while Bramble was in possession of the property and acting under it he ought not to be deprived of the expenses he incurred or the compensation he earned while he was acting in good faith thereunder.

But counsel say that the trust deed was void (b) because it was not recorded, and it is true that the laws of Oklahoma required it to be recorded (chapter 4, Secs. 218, 223), but it seems that the penalty of invalidity for failure to make the record does not fall unless the record is not made and the inventory required in the statute is not filed within 20 days after the date of the assignment (section 225); (c) because no inventory was filed, but no penalty fell for the...