In re Terry, 4007.
| Decision Date | 26 May 1951 |
| Docket Number | No. 4007.,4007. |
| Citation | 97 F. Supp. 635 |
| Parties | In re TERRY. |
| Court | U.S. District Court — Eastern District of Arkansas |
J. B. Milham, Eureka Springs, Ark., for the debtor, A. O. Terry.
Townsend & Townsend, Moore, Burrow, Chowning & Mitchell, Cooper Jacoway, Little Rock, Ark., for petitioning creditors.
This cause comes on to be heard upon the debtor's petition to review the order of the Referee, Honorable Lee Cazort, adjudicating him a bankrupt, which order was entered by the Referee on August 15, 1950. Upon consideration of the record in the case and the written briefs filed herein, we are of the opinion that the case should be remanded to the Referee with certain directions which will be hereinafter set forth.
This is an involuntary proceeding initiated by three of the debtor's creditors on January 10, 1950; in their petition these creditors alleged that within four months of the filing of the petition the debtor concealed with intent to hinder, delay, and defraud his creditors "large sums of money". On the same day the petitioning creditors asked that a receiver be appointed to take charge of the assets of the debtor, and an order to that effect was made on the same day. On March 2, 1950, the debtor filed a verified answer to the creditors' petition in which he denied that he had committed the act of bankruptcy alleged in said petition and further denied that he was insolvent. On March 28, 1950, the debtor filed an amendment to his answer in which he alleged that the creditors had procured the appointment of a receiver who operated his business for seven days and then closed the business down; it was further alleged that the debtor had filed a suit in the Circuit Court of Saline County, Arkansas, against the petitioning creditors and others alleging that they had wrongfully converted his property and had damaged him to the extent of $33,400, and that said suit was then pending in that Court; following this allegation the debtor again denied in general terms each and every allegation contained in the creditors' petition. Thereafter, the debtor filed a second amendment to his answer in which he raised certain issues not here pertinent, and which we do not discuss.
The Referee held extended hearings and took voluminous testimony on the issues raised by the pleadings, and on August 15, 1950, entered an order adjudicating the debtor a bankrupt. On August 18, 1950, the debtor filed a petition for review of the Referee's order of adjudication, and it is upon this petition for review that the case is now before us.
Upon the filing of the petition for review, the Referee filed a certificate covering the proceedings before him, setting out the questions presented, and his findings of fact with reference thereto. Contemporaneously with the filing of this certificate the Referee likewise filed a memorandum opinion discussing the issues in the case and his findings and conclusions.
It appears that there were two questions presented to the Referee: (1) Whether or not the alleged bankrupt had committed the act of bankruptcy alleged, and, (2) whether or not the alleged bankrupt was insolvent at the time the petition in bankruptcy was filed against him. The Referee found that the debtor had committed the act of bankruptcy alleged in the petition, and that he was insolvent at the time that the petition against him was filed. It was upon these findings that the order of adjudication was made.
Upon the filing of the Referee's certificate and opinion, the matter was submitted to the Court upon a transcript of the evidence taken before the Referee and written briefs filed by the respective parties. After we had read and considered all of this evidence and the briefs, but before we had entered any order in the premises, we received information that the debtor probably owned certain property which was not considered by the Referee at the time he made his original findings, and we remanded the case to him under the provisions of General Order in Bankruptcy No. 47 to take additional testimony but on the sole question of the solvency or insolvency of the debtor at the time the petition against him was filed. We were satisfied as to the Referee's finding with reference to the debtor having concealed large sums of money with the intent to hinder, delay and defraud his creditors.
Upon this partial re-submission to the Referee, he conducted further hearings and made a further finding of fact, which has been duly certified to us and which is to the effect that the debtor was solvent at the time that the petition against him was filed. Both sides have filed additional briefs in connection with the supplemental findings of the Referee and the cause has been submitted to the Court for decision in chambers on the record and the briefs.
The scope of our review of the Referee's findings of fact is very strictly limited by General Order in Bankruptcy No. 47, which provides that, "Unless otherwise directed in the order of reference, the report of a referee * * * shall set forth his findings of fact and conclusions of law, and the judge shall accept his findings of fact unless clearly erroneous. * * *" It will be noted from the plain language of this General Order that we are bound by the Referee's findings of fact unless they are clearly erroneous; and the Court of Appeals for the Eighth Circuit has held that a Referee's findings are not clearly erroneous when they are supported by substantial evidence. Equitable Life Assurance Society v. Deutschle, 8 Cir., 132 F.2d 525, 526. Even before this General Order was promulgated in its present form, the said Court had held in Rasmussen v. Gresly, 8 Cir., 77 F.2d 252, 254, that "The determination of a referee in bankruptcy of issues of...
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In re Leach
...observe the demeanor of the interested parties while they were testifying, and to judge their credibility as witnesses. In re Terry, D.C.E.D.Ark. 1951, 97 F.Supp. 635. His findings are fully sustained by the record. Therefore, the only question before the court is whether the conclusions of......
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Terry v. Plunkett-Jarrell Grocery Co.
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In re Hot Springs Broadcasting, Inc.
...to observe the demeanor of the interested parties while they were testifying and to judge their credibility as witnesses. In re Terry, (E.D.Ark.1951) 97 F.Supp. 635. His findings are fully sustained by the record. In re Leach, supra; In re Carroll, supra. Therefore, the only question before......