In re Brown

• Decision Date: 14 October 1918
• Docket Number: 3173.
• Citation: 253 F. 357
• Parties: In re BROWN et al. v. W. H. KENWORTHY & SON et al. BROWN et al.
• Court: U.S. Court of Appeals — Ninth Circuit

253 F. 357

In re BROWN et al.

BROWN et al. v. W. H. KENWORTHY & SON et al.

No. 3173.

United States Court of Appeals, Ninth Circuit.

October 14, 1918

Herr Bayley & Croson, of Seattle, Wash., for appellants Brown et al.

Peters & Powell, of Seattle, Wash., for appellant Dexter Horton Nat Bank of Seattle.

Kerr &amp McCord, of Seattle, Wash., and Stephen V. Carey, of Spokane Wash., for appellee National Bank of Commerce of Seattle.

Walter M. Harvey, of Tacoma, Wash., for petitioning creditors.

R. P. Oldham, of Seattle, Wash., for appellee Seattle Nat. Bank.

Before GILBERT and HUNT, Circuit Judges, and WOLVERTON, District judge.

GILBERT Circuit Judge.

The question which this appeal presents is whether the court below erred in confirming the master's report and adjudging that the appellant A. L. Brown was not chiefly engaged in farming or the tillage of the soil on December 28, 1917, the date of the alleged act of bankruptcy, for which his creditors by their petition sought to have him adjudged bankrupt. Brown was a citizen of Seattle, a lawyer, and the president of the Amos Brown Estate, a corporation, in which he and his mother and sisters owned all the shares; the estate consisting of city property of the value of $2,350,000. As such president he received a salary of $3,000 per annum.

He acquired 2,100 acres of land, situate about 60 miles from Seattle, and he and his wife had their home thereon, while at the same time they maintained apartments in Seattle, where much of their time was spent. The farm was stocked with a large number of cows, bulls, stallions, horses, swine, and poultry. Brown expended large sums of money in improving the farm. He erected thereon numerous buildings, including a stallion barn, an extensive packing house, with cold storage rooms, a creamery, and poultry houses. The packing house cost from $50,000 to $60,000, and the creamery and poultry houses about $30,000. Both the packing house and the creamery were of capacity vastly in excess of the needs of the farm. In 1915 he engaged in the business of selling his products directly to consumers by means of the parcels post. He secured the services of a government inspector for his packing plant. He slaughtered cattle and hogs, and, aside from beef, the manufactured product of the packing house included ham, bacon, sausage, and pickled pigs' feet. He bought cattle, hogs, and chickens from others to the extent of from 38 to 40 per cent. of the products which passed through the packing house. The evidence was that during the year 1917 the gross income from his several industries was about $222,000, of which about $95,000 was the gross income from the farm; that the feed purchased amounted to $37,648, while the feed raised on the farm was $17,600; that the gross expense of his operations was about $250,000, of which about $22,000 was the cost of operating the farm; that the total cost of labor was $46,391, of which the farm labor cost was $16,000. When obtaining a loan from a bank in July, 1917, Brown stated to the president of the bank that he was advertising a sale of his cattle, that he realized that in order to make money he must make it from his packing plant, and that he was making no money out of the stock, and for that reason he was going to dispose of it. On February 26, 1918, Brown wrote to his creditors as follows:

'In closing this letter I want to impress you with the fact that for the past several years I have been educating the farmers for many miles around in the raising and furnishing me with more and better products; I agreeing to take it all. They are now demanding that I still furnish them a market for their products. As a manufacturing plant I have been buying for a long time about 95 per cent. of the farm products we sold. We have daily calls for hundreds of dollars worth of Brown Farm Products, which we cannot furnish...