In re Automatic Typewriter & Service Co.
| Decision Date | 12 January 1921 |
| Docket Number | 107. |
| Citation | 271 F. 1 |
| Parties | In re AUTOMATIC TYPEWRITER & SERVICE CO. |
| Court | U.S. Court of Appeals — Second Circuit |
Patterson Eagle, Greenough & Day, of New York City (Carroll G. Walter of New York City, of counsel), for petitioner.
David W. Kahn, of New York City, for respondent.
Before WARD, HOUGH, and MANTON, Circuit Judges.
The Hooven Automatic Typewriter Corporation on May 21, 1920, as a petitioning creditor, filed an involuntary petition, praying that the Automatic Typewriter & Service Company be adjudicated a bankrupt. The alleged bankrupt filed an answer in which it set up, among other things, seven affirmative defenses. To this no replication was filed, or ordered to be filed. The issues raised by the petition and answer were noticed for trial, when a notice was served that an application would be made to dismiss the petition at a term of the District Court. The petitioning creditor moved at the same time to dismiss the affirmative defenses on the ground that they were insufficient in law. The court below refused to dismiss the petition, and adjudged six of the seven defenses insufficient. A master was then appointed to take testimony. As a result, this present petition to revise was brought on by the alleged bankrupt. It is contended that the petition for adjudication, filed by the sole petitioning creditor, is insufficient in law upon the face thereof, because it does not plead any facts showing insolvency of the alleged bankrupt, and that such facts as are alleged in the answer show that the Hooven Automatic Typewriter Corporation is not a creditor, and it is claimed that said creditor is estopped from maintaining the petition, because it sued out an attachment against the property of the alleged bankrupt prior to the filing of the petition herein, and that this attachment was in force and effect at the time of filing its petition praying for the adjudication in bankruptcy. The contention is advanced that the facts set forth in the answer established that the Hooven Corporation has received and has not surrendered a preferential payment because of its levying the attachment, and therefore is disqualified and estopped from maintaining this petition.
Error is further alleged to have been committed because facts are alleged in the answer, which, it is claimed, show that the Hooven Corporation filed a petition in bad faith, for a sinister and ulterior purpose, and is equitably and legally barred from maintaining this petition. The petition pleads that the petitioner is a creditor for $50,000 for automatic typewriters sold and delivered to the alleged bankrupt, and for moneys paid out and expended for the latter's account from December 1, 1919, to February 28, 1920. The acts of bankruptcy are set forth as preferential transfers, and it is alleged that, since the same were made to prefer such creditors over its other creditors in the same class, property was conveyed, transferred, and concealed and removed with the intent to hinder, delay, and defraud its creditors. In the amended answer filed there is a denial of these allegations, and seven separate affirmative defenses are interposed. The court below dismissed six of the seven defenses, and this is now sought to be reviewed on this petition to revise.
We think the petition sufficiently sets forth that the petitioning creditor has a provable claim in excess of $500 and is not entitled to priority of payment within the meaning of section 64b of the Bankruptcy Act and the amendments thereof (Comp. St. Sec. 9648), and, further, that it has not received a preference within the meaning of the Bankruptcy Act. The claim is set forth as for typewriters sold and delivered to the alleged bankrupt, moneys laid out and expended for the account of the bankrupt, between the dates which are fixed, in excess of $50,000, and there is the further allegation that an unliquidated claim exists in favor of the petitioner against the bankrupt for breach of contract. The fifth paragraph of the petition sets forth that the alleged bankrupt is insolvent, and committed acts of bankruptcy by preferential payments and conveyances made to hinder, delay, and defraud the creditors. These allegations may have been more specific as to detail, but as set forth are sufficient.
In re Connecticut Brass & Mfg. Co. (D.C.) 257 F. 445 is referred to us as an authority supporting the contention of the petitioner that the petition here is insufficient in its allegations; but that case refers to the allegation of insolvency in a...
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