In re Hamilton Furniture & Carpet Co.
| Citation | 117 F. 774 |
| Decision Date | 06 October 1902 |
| Docket Number | 1,168. |
| Parties | In re HAMILTON FURNITURE & CARPET CO. v. MITCHELL. PENINSULAR STOVE CO. |
| Court | U.S. District Court — District of Indiana |
W. R Coffroth, for petitioner.
Stuart Hammond & Sims, for trustee.
The petitioner, the Peninsular Stove Company, filed its petition in the nature of a bill in equity against William C Mitchell, trustee of the estate of the Hamilton Furniture & Carpet Company, which had been adjudged a bankrupt on March 10, 1902, for the rescission of a contract of sale of a lot of stoves made by it to the bankrupt on December 27, 1901, and for the return of the stoves, or their value, on the ground that the contract of sale had been induced by the false and fraudulent representations of the bankrupt. The sale was made through a traveling salesman of the petitioner, who made inquiry of the bankrupt as to its solvency, and he was informed by the purchasing officer of the bankrupt that the company was perfectly solvent, and had $25,000 of paid-up capital behind it. The traveling salesman took the order for the goods, and reported it, with the representations of the bankrupt, to the petitioner. The petitioner then obtained a report from the Dun Mercantile Agency, of which it was a patron, of the financial standing of the bankrupt. The mercantile agency furnished to the petitioner a copy of a statement in writing made to the agency on February 1, 1901, by the bankrupt, which sets out the assets and liabilities of the bankrupt, showing that it was worth $32,875 over and above all liabilities. The petitioner was induced by these statements, which it believed and relied upon as true, to sell and ship to the bankrupt between the 6th and 31st days of January, 1902, stoves to the amount and value of $550.27. The representations of the bankrupt were false, and were known to have been so at the time they were made, and the petitioner, relying upon them as true, sold and delivered the stoves to the bankrupt. The bankrupt was grossly insolvent on February 1, 1901, and continued to be insolvent from that time until it was adjudged to be a bankrupt. From February 1, 1901, until it was adjudged a bankrupt, it was not possessed of property and assets to a greater amount than 50 to 60 per cent. of its liabilities. On these facts the referee decreed that the contract of sale should be rescinded, and the trustee was ordered to pay to the petitioner the value of the goods, which had been sold under an order of the court. The trustee has taken an appeal, and asks the court to review and reverse the finding and order of the referee. The right to such review and reversal is bottomed on a single proposition thus stated:
'To entitle the petitioner to rescind the contract set forth in the intervening petition, it was incumbent upon it to show that the purchase was made by the bankrupt while insolvent, with the preconceived design then present in its mind not to pay for the stoves.
It is well settled that where a party,...
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Lowell v. Brown
... ... 228 Mass. 152, 117 N.E. 46; In re Gold, 210 F. 410, ... 127 C.C.A. 142; In re Hamilton Furniture & Carpet Co ... (D.C.) 117 F. 774; Illinois Parlor Frame Co. v ... Goldman, 257 F ... ...
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Manly v. Ohio Shoe Co.
...to profit by the fraud of the bankrupt to the wrong and injury of the party who has been deceived and defrauded. In re Hamilton Furniture & Carpet Co. (D. C.) 117 F. 774, 776; Standard Oil Co. v. Hawkins (C. C. A. 7th) 74 F. 395, 33 L. R. A. 739. This does not result in a preference in favo......
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In re Stridacchio, 69-51.
...to profit by the fraud of the bankrupt to the wrong and injury of the party who has been deceived and defrauded. In re Hamilton Furniture & Carpet Co., D.C., 117 F. 774, 776; Standard Oil Co. v. Hawkins, 7 Cir., 74 F. 395, 33 L.R.A. 739. This does not result in a preference in favor of the ......
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