In re Sullivan Condensed Milk Co.
| Decision Date | 08 June 1923 |
| Docket Number | 3192. |
| Citation | 291 F. 66 |
| Parties | In re SULLIVAN CONDENSED MILK CO. v. EDGERTON. BATZ |
| Court | U.S. Court of Appeals — Seventh Circuit |
William Ryan, of Madison, Wis., for appellant.
Oscar T. Toebaas, of Madison, Wis., for appellee.
Before ALSCHULER, EVANS, and PAGE, Circuit Judges.
This appeal is from a decree disallowing the claim filed against the estate of the bankrupt by appellant, who asked also that she have a lien for the amount thereof ($4,000 and interest) upon the proceeds derived from the sale of the property covered by the mortgage.
Most of the facts were covered by stipulation, from which it appears that appellant, on August 29, 1917, loaned bankrupt $4,000 receiving therefor a note, due six months from date, drawing interest at 8 per cent. As collateral security, she took first mortgage gold bonds covering the property of bankrupt the face value of which was $4,100. The referee found that this note had been paid, and his finding was confirmed by the court. If it remains undisturbed, affirmance of the judgment necessarily follows.
We find no support in the evidence for such a finding. In fact, the trustee in his answer did not allege payment as one of the many defenses. The making of the loan, the giving of the note, and the delivery of the collateral are not denied. But it is claimed the referee found that the debt had been paid because of a series of transactions with Mr. Batz, husband of claimant. It appears that Mr. Batz, about the same time as his wife so loaned the $4,000, advanced or loaned the bankrupt $20,000. He also gave his note for $4,588.64, which was put up as collateral with a Milwaukee bank. To secure these advances, Mr. Batz obtained an assignment of bankrupt's claim for fire insurance due as a result of a recent fire.
On September 15, 1917, bankrupt paid the note at the Milwaukee bank and thereby relieved Mr. Batz of his contingent liability. It also sent Mr. Batz $20,000, accompanying the check by a letter which read:
Appellee urges that $4,000 of the $20,000 sent Mr. Batz was for claimant, and should be so credited. But we find nothing in the record to indicate that any such intention on the part of the bankrupt was communicated to Mr. Batz. In fact, the foregoing letter negatives any such intention. The money was sent to Mr. Batz to extinguish a claim which was well secured. It came from the fire insurance fund, a part of which was assigned to him. If $4,000 was intended for Mrs. Batz, it is passing strange that the debtor did not call for the surrender of the note which it had given and the bonds which had been executed to secure the indebtedness.
More than this, about eight months thereafter the company made a payment upon claimant's...
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