Hinds v. Moore

• Decision Date: 11 January 1905
• Docket Number: 1,347.
• Citation: 134 F. 221
• Parties: HINDS v. MOORE.
• Court: U.S. Court of Appeals — Sixth Circuit

134 F. 221

HINDS v. MOORE.

No. 1,347.

United States Court of Appeals, Sixth Circuit.

January 11, 1905

Robert W. Mobray, for appellant.

D. W De Haven, for appellee.

This is an appeal from a judgment of the District Court requiring the appellant, Isaac Hinds, to pay to the trustee in bankruptcy of the Leeds Woolen Mills Company the sum of $500, with interest and all the costs of the proceeding. The Leeds Woolen Mills Company, a corporation engaged in business as tailor and dealer in clothes at Memphis, Tenn., was adjudged a bankrupt, and F. E. Moore duly appointed trustee. Thereupon Moore, as trustee, filed November 15, 1902, a petition in the bankruptcy cause against the appellant, Issac Hinds, in which it was alleged that the woolen mills company was adjudged a bankrupt April 8, 1902, and the proceedings referred to R. D Jordan, as referee; that under a rule of the bankrupt court for the Western District of Tennessee the said referee qualified as receiver, and took possession of the assets of the bankrupt, consisting of a stock of cloth goods trimmings, etc., not itemized, being in a certain storeroom that among the goods in said storeroom were two boxes of cloth which were claimed by appellant as never having been sold or delivered to the bankrupt; that the officers and agents of the bankrupt also represented that the bankrupt had not bought or received said two boxes of goods, same having been shipped by said Isaac Hinds to himself, care of the Leeds Woolen Mills Company. The petition then alleges that the said referee and receiver, relying upon the representations of the said Hinds and of the bankrupt, permitted Hinds to receive said goods, and remove them from the storeroom in which was the bankrupt's stock. It is then, in substance, charged that in fact these goods had been sold and delivered to the bankrupt, and that title had passed; that the same goods so recovered by Hinds had been subsequently disposed of by him to another establishment at Memphis. It is then averred that these facts constitute a wrongful taking of the goods from the possession of the bankrupt court. The petition concludes with a prayer for an order on Hinds 'to show cause why he should not be compelled to account to the trustee of said bankrupt and to the court for the value of said goods,' which is averred to be $500. An order to show cause was accordingly made. Hinds appeared, and specially demurred upon the ground that the court had no jurisdiction to proceed against him for the value of said goods by an order to show cause, nor in any other way, in said court, without his consent. This demurrer was overruled, and Hinds required to file an answer, with leave to rely on same in his answer. Thereupon Hinds, not consenting to the jurisdiction, but still relying on his demurrer, answered, in which he denies that he ever sold the goods in question to the bankrupt, and that same had been shipped to his own order, care of the bankrupt, and had not been received or opened by the bankrupt, and that his claim made to the referee and receiver was true, and the delivery to him rightful. The issue made upon the title to the goods by the petition and answer was referred to a master to take proof and report. The master reported in favor of the contention of the trustee that the title had passed to the bankrupt, and that the value of the goods was $500. Exceptions by the appellant were overruled, and the report confirmed, and appellant directed to pay to the trustee $500 and interest, as the value of the goods.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

LURTON Circuit Judge, after making the foregoing statement of the case, .

The motion of the appellee to dismiss the appeal must be denied. The motion is grounded upon the contention that the proceeding is not an appeal under section 25, Bankr. Act July 1, 1898, c. 541, 30 Stat. 553 (U.S. Comp. St. 1901, p. 3432), nor an appeal such as is cognizable under the general appeal powers of this court from 'controversies arising in bankruptcy proceedings,' under section 24a (30 Stat. 553 (U.S. Comp. St. 1901, p. 3431)), but, if reviewable at all, is so only under section 24b, giving this court revisory and superintending powers over 'the proceedings of the several inferior courts of bankruptcy,' etc. That this is not an appeal in one of the special cases mentioned in section 25a must be conceded. The petition of the trustee, and the answer of the defendant thereto, raised a distinct and separable controversy over certain property adversely held and claimed by the defendant thereto. It may therefore be well treated as one of those 'controversies arising in bankruptcy proceedings,' over which this court may exercise general appellate jurisdiction, as in other cases under section 24a. Hewitt v. Berlin Machine Works, 194 U.S. 296, 300, 24 Sup.Ct. 690, 48 L.Ed. 986; In re First National Bank of Canton (decided by this court at present session) 135 F. 62; Boonville Bank v. Blakey, 107 F. 891, 47 C.C.A. 43; Steele v. Buel, 104 F. 968, 44 C.C.A. 287.

But we are of opinion that the demurrer should have been sustained to the petition of the bankrupt's trustee. The learned trial judge thought the case fell under White v Schloerb, 178 U.S. 542, 20 Sup.Ct. 1007, 44 L.Ed. 1183. In that...