In re Baker
| Decision Date | 28 May 1926 |
| Docket Number | No. 8213.,8213. |
| Citation | 13 F.2d 413 |
| Parties | In re BAKER. |
| Court | U.S. District Court — Southern District of California |
Walter C. Durst, of Los Angeles, Cal., for petitioner Pearlman.
Walter W. Mayes, of Los Angeles, Cal., for petitioning creditors.
R. B. Baker, as to whom certain creditors have filed an involuntary petition in bankruptcy, prior to the early part of February, 1926, conducted the business of dealing in automobile tires at an established location in the city of Los Angeles. On February 11, 1926, Baker offered to sell to Sam Pearlman his business and stock of merchandise for the sum of $1,000. This offer was not accepted by Pearlman. On February 13, 1926, Pearlman returned, and Baker again offered to sell his business and stock, agreeing to take $500 therefor. Pearlman noticed that in the interval between his first and second visit, a considerable part of the merchandise had been removed from the shop. He accepted the last offer of Baker, and paid $200 in cash, and an escrow was made covering the balance of $300 due, pending the lapse of time required by section 3440 of the Civil Code of California within which creditors might assert claims. The notice of the intended sale was recorded in compliance with the section noted. Claims of creditors were made against the escrow deposit of amounts largely in excess of $300. An attachment was levied on process issued out of the state court, and the escrow holder was advised by Pearlman not to pay out the $300, pending action by the creditor claimants.
Pearlman on February 13, 1926, took possession of the shop and premises formerly used by Baker, and retained the same until dispossessed thereof by the attachment levied by the sheriff. The custodian appointed in this proceeding later obtained possession and has since retained the same. Pearlman's application for an order to have restored to him the possession of the shop was referred to a special master, upon the order being resisted by the petitioning creditors herein. The master, after hearing the evidence offered by the parties, made his finding that the transfer by Baker to Pearlman was fraudulent as against the creditors of Baker, and hence void. He made a second finding that the sale was never completed, because the consummation thereof under the escrow was suspended at the demand of Pearlman, the vendee. The master accordingly made his report and recommendation. Pearlman excepted to the findings of the special master on the principal ground that, under the evidence, there was no warrant for determining that the sale by Baker to him was void or voidable.
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