In re Louis J. Bergdoll Motor Co.

• Decision Date: 15 June 1916
• Docket Number: 2110.
• Citation: In re Louis J. Bergdoll Motor Co., 233 F. 410 (3rd Cir. 1916)
• Parties: In re LOUIS J. BERGDOLL MOTOR CO. v. BERGDOLL. HARRIGAN
• Court: U.S. Court of Appeals — Third Circuit

233 F. 410

In re LOUIS J. BERGDOLL MOTOR CO.

HARRIGAN v. BERGDOLL.

No. 2110.

United States Court of Appeals, Third Circuit.

June 15, 1916

J Frederick Jenkinson and Frank A. Harrigan, both of Philadelphia, Pa., for appellant.

Henry J. Scott and Nicholas H. Larzelere, both of Philadelphia Pa., for appellee.

Before BUFFINGTON, McPHERSON, and WOOLLEY, Circuit Judges.

McPHERSON Circuit Judge.

This is an appeal by the trustee from the allowance of a claim against the bankrupt estate of the Louis J. Bergdoll Motor Company. The facts that gave rise to the original controversy are fully stated by Judge Woolley in Bergdoll v. Harrigan (C.C.A.3d) 217 F. 943, 133 C.C.A. 615, and need not be repeated. In order to explain the present dispute, it is enough to say briefly, that an involuntary petition was filed against the Motor Company on March 17, 1913, and that an order of adjudication was entered on April 11. In October the trustee was authorized to sue Erwin R. Bergdoll to recover a preference of more than $31,000, and accordingly he brought the suit soon afterward and recovered a verdict in the spring of 1914. We affirmed the judgment in 217 F. 943, 133 C.C.A 615 and the Supreme Court was of the same opinion.

Bergdoll v. Harrigan, 238 U.S. 609, 35 Sup.Ct. 663, 59 L.Ed. 1487. The decision of the Supreme Court was announced on April 26, 1915, and thereupon Bergdoll paid the judgment. On June 7, 1915, he offered a proof of claim, embracing the same debt ($31,270) that had been preferentially paid. The referee rejected the claim, but the District Court (Dickinson, J.) reversed this order and held that the proof should have been allowed. 230 F. 248. The question now presented is whether for any reason the claim was barred.

The trustee does not assert that the mere lapse of time was sufficient. It is true that more than a year had passed since the adjudication (section 57, cl. 'n'); but as the litigation about the preference was not ended until April 26, 1915, and as the proof was offered within 60 days from that date, he concedes that the offer was in time. The decisions on this subject are collected in 1 Rem. Bkcy. (2d Ed.) Secs. 717, 727 1/2; Collier, Bkcy. (10th Ed.) 746; Black, Bkcy. Sec. 526. And see Page v. Rogers, 211 U.S. 581, 29 Sup.Ct. 162, 53 L.Ed. 332, where the Supreme Court allowed a creditor 'to prove his claim and to receive a dividend on it upon an equality with other creditors,' although more than five years had passed since the adjudication. The sole ground of the trustee's objection is that the preferential payment was a fraud in which Bergdoll himself took part, and that such conduct affords an equitable reason for denying him the right to prove. It is contended that Keppel v. Bank, 197 U.S. 356, 25 Sup.Ct. 443, 49 L.Ed. 790, inferentially supports this position, and one or two passages from the opinion are quoted to justify the argument. We do not so understand the reasoning of that case. The question submitted and answered in the affirmative was this:

'Can a creditor of a bankrupt who has received a merely voidable preference, and who has in good faith retained such preference until deprived thereof by the judgment of a court upon a suit of the trustee, thereafter prove the debt so voidably preferred?'

The ground of the decision is that, although the act declares in section 57 that 'the claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences,' Congress intended that such claims should be allowed, whether the surrender be voluntary or involuntary. We are now asked to hold that,...