In re Dickson
| Decision Date | 15 November 1901 |
| Docket Number | 344.,341 |
| Parties | In re DICKSON et al. v. WYMAN. DICKSON et al. |
| Court | U.S. Court of Appeals — First Circuit |
Henry D. Hotchkiss and Richard B. Aldcroft, for petitioners and appellants.
Thomas H. Gage, Jr., for respondent and appellee.
Before COLT and PUTNAM, Circuit Judges, and WEBB, District Judge.
These cases were argued in October, 1900, and the determination of them has been delayed by reason of the pendency in the supreme court of Pirie v. Trust Co., now reported in 182 U.S 438, 21 Sup.Ct. 906, 45 L.Ed. 1171, involving a question underlying those at issue here. The controversy arose out of the following provision in the act establishing a uniform system of bankruptcy, approved on July 1, 1898 (paragraph 'g' of section 57):
'The claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences.' Other provisions of the statute bearing on the construction of this paragraph are given in the decision of the supreme court referred to, and they are conveniently grouped in McKey v. Lee, 45 C.C.A. 127, 105 F. 923, 925, to which we will also again refer, so that it is needless to now recite them at large.
These proceedings were instituted by creditors the proof of whose claim was stricken out by the district court, basing its action on the provision of the statute which we have quoted. It appears that the creditors had been dealing with the bankrupt, selling him merchandise from time to time at short intervals, and receiving payments therefor substantially every month, each sale being paid for by itself; that is to say, each bill of merchandise sold one month was separately paid for the succeeding month, or soon after. The sales however, and the payments, were entered to the same running account, so that, so far as the mere form of ledger entries is concerned, the transactions were continuous. The proof was made up of several items of merchandise sold as stated, on none of which had any payment been made.
It is consequently claimed by the creditors that, so far as the sales in proof are concerned, they received no payment during the four months preceding the bankruptcy; and they also claim that whatever payments they received were in the ordinary course of business, without any intention on the part of the debtor to prefer them, and without reasonable cause on their part to believe him insolvent. All the facts thus set up by the creditors are conceded by the trustee in bankruptcy, who is the party proceeded against in this court. Nevertheless the district court, justly feeling itself bound to follow the decisions of the circuit courts of appeals in other circuits, and finding that the creditors had actually received payments for other merchandise within four months, rejected the proof. Afterwards came the opinion in Pirie v. Trust Co., 182 U.S. 438, 21 Sup.Ct. 906, 45 L.Ed. 1171, already referred to, sustaining the action of the district court so far as concerns the lack of any intention on the part of the debtor to prefer, and the lack of any reasonable cause on the part of the creditors to believe that he was insolvent. The supreme court, however, did not pass in terms on the other proposition; that is to say, that arising from the fact that no payment had been made during the period of four months on account of any merchandise the price of which constitutes any particular item offered to be proved; but its line of reasoning and some expressions contained in its opinions sustain the decree appealed from, so far as this is concerned. The construction given by that court to the statute is a literal one. Carrying this method of construction to its legitimate conclusion, it must be observed that paragraph 'g' of section 57 classifies according to creditors, and not according to claims; and, so far as creditors who have received preferences are concerned, it makes no limitation with reference to the claims offered by them for proof. So long as the statute is to receive a literal construction in the manner applied by the supreme court, we cannot avoid the conclusion that any creditor who has received a payment, under the circumstances which we have stated, without more appearing, must comply with paragraph 'g' before he can prove any claim whatever.
There is one view of the pending cases, however, which is not touched on by the supreme court, and which apparently was not brought to...
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In re Fulghum Const. Corp.
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