Buffum v. Peter Barceloux Co.

• Decision Date: 29 July 1929
• Docket Number: No. 263,267.,263
• Citation: 51 F.2d 80
• Court: U.S. District Court — Northern District of California
• Parties: BUFFUM v. PETER BARCELOUX CO. SAME v. GELINAS.

51 F.2d 80 (1929)

BUFFUM v. PETER BARCELOUX CO.^*

SAME v. GELINAS.

Nos. 263, 267.

District Court, N. D. California.

July 29, 1929.

Devlin & Devlin & Diepenbrock, of Sacramento, Cal., George R. Freeman, of Willows, Cal., and H. B. Wulff, of Sacramento, Cal., for complainant.

Huston, Huston & Huston, of Sacramento, Cal., for respondents.

BOURQUIN, District Judge.

These suits are consolidated for trial.

Plaintiff is trustee of the estate of Henry Barceloux, bankrupt, and defendants are transferees of portions of his property alleged to have been made with mutual intent to hinder, delay, and defraud his creditors.

Without ranging as wide as does the evidence, by the latter it appears that in 1926 the bankrupt, later so adjudicated, was engaged in large operations in banking, real estate, ranching, etc., and had arrived at a crisis in his affairs. He had extensive properties and likewise debts. If not insolvent in the sense of the bankruptcy law, he was in that of the local law for that he could not pay his debts due.

Amongst his properties were 2,494 shares of the defendant in case 263, a family corporation the shares of which always had been owned by him, his brother George, his sister Cora, defendant in case 267, and three children of his deceased brother. Its book value was fully $36 per share. Of course, held in the family it had, strictly speaking, no market value. Moreover, it was subject to a reservation of all income from the corporate property (with perhaps some unimportant exception of surplus) in favor of the mother of Henry, and the others, evidently an aged woman of years undisclosed. Others of Henry's properties were certain stocks, unincumbered and of value some $2,400 which may be described as pledge 2, and certain bank stocks incumbered $13,800 and of value $24,100 and one share of defendant corporation unincumbered, which may be described as the Gelinas transfer. These three parcels are the subject-matter of the suits.

In 1926 Henry's properties were of value some $180,000 and his debts, including those alleged due defendants, other relatives, and attorneys, were about equal in amount if not some $191,000. In 1921, one Freeman secured judgment against Henry and one Donohoe, which in 1924 became final, and which less some $10,000 paid, in 1926 was in amount some $58,000. From finality until June, 1926, Freeman and Henry co-operated to make a portion of this judgment from Donohoe, with such poor success that at the date last aforesaid Freeman was insisting upon security from Henry. To that end, on June 30, 1926, to Freeman, Henry executed a trust deed of Lake county lands in which, with George, he had a considerable equity, and assigned to Freeman said 2,494 shares of defendant; this latter, however, subject to a claim of pledge to defendant corporation to secure certain debts due it from Henry. Freeman at once sought from the corporation (at all times theretofore managed by Henry, George, and Cora) an agreement that the corporate pledge would not be foreclosed save after 90 days' notice to him, which agreement, after some consideration, was refused. Henry testifies the assignment and proposed agreement created a "fuss," and that George and Cora "sold him out."

It is evident no stranger was wanted within the family corporation gates. Rapid action followed. As of June 29, 1926, but evidently of a time subsequent to the deed and assignment aforesaid to Freeman, defendant corporation executed to itself a certificate of said 2,494 shares as pledgee. July 3, 1926, George procured from Henry the parcel, pledge 2, as additional security for the defendant...