In re Lucey Mfg. Corporation

• Decision Date: 15 June 1925
• Docket Number: No. 379.,379.
• Citation: 9 F.2d 313
• Parties: In re LUCEY MFG. CORPORATION. Appeal of FIELD et al.
• Court: U.S. Court of Appeals — Second Circuit

9 F.2d 313 (1925)

In re LUCEY MFG. CORPORATION Appeal of FIELD et al.

No. 379.

Circuit Court of Appeals, Second Circuit.

June 15, 1925.

Beekman, Bogue, Clark & Griscom and Rosenberg & Ball, all of New York City (W. Campbell Armstrong and James N. Rosenberg, both of New York City, of counsel), for appellants.

E. Bright Wilson, of New York City, and J. J. Lynch, of Chattanooga, Tenn. (Allison, Lynch & Phillips, of Chattanooga, Tenn., of counsel), for appellee.

Before HOUGH, MANTON, and HAND, Circuit Judges.

HAND, Circuit Judge (after stating the facts as above).

We do not understand that any question is raised of the knowledge by the creditors' committee that the California business was being conducted as in fact it was, and that Everett was to pay and was paying such claims as were necessary to continue it. That knowledge was, moreover, acquired under circumstances which leave no doubt that the receivers' operations, of which Everett's were in substance a part, were with the committee's entire assent. While perhaps they did not know specifically of each payment made, the greater includes the less, and their general consent covered all details necessary to accomplish the general purposes in which they co-operated.

So much admitted, the petition must fail. A creditor, who would put his debtor into bankruptcy because of a preferential payment, complains of a wrong. The law requires an insolvent to distribute equally all that he has; he must be just, before he is generous. When he is not, any creditor aggrieved may take from him his property and secure its ratable distribution. Yet it is only because he has been wronged that the creditor may act; and if he has induced the debtor to make the payment, or even consented to it in advance, plainly it is not an injury and not a wrong. We have found no case in point, except In re Freeman Cotting Coat Co. (D. C.) 212 F. 548, though that accords with our view. But it is surely not necessary to find a precise application to this situation of so universal a principle, which rests upon the most obvious rules of fair dealing and has its roots in very ancient notions.

All this has no very near relation to estoppel, as the appellants seem to suppose. Under that term is properly included the conduct by which a person once wronged may disqualify himself from any effective complaint. It presupposes that the wrong has existed, and that the victim has had a remedy; it concerns itself only with whether the remedy has been lost. Such are the usual instances of assignments for the benefit of creditors, or receiverships, cases where the creditors might at one time have brought the estate into bankruptcy. The question is whether taking part in such proceedings concludes one from repudiating them later. As the law is not in general interested in the...