In re Victor

• Decision Date: 01 November 1917
• Docket Number: 884.
• Citation: 246 F. 727
• Parties: In re VICTOR. v. VICTOR et al. LANHAM
• Court: U.S. District Court — Northern District of Georgia

246 F. 727

In re VICTOR.

LANHAM v. VICTOR et al.

No. 884.

United States District Court, N.D. Georgia, Northwestern Division.

November 1, 1917

M. B Eubanks and Max Meyerhardt, both of Rome, Ga., for Mrs A victor.

L. H Covington, of Rome, Ga., for trustee.

Denny &amp Wright, of Rome, Ga., for petitioning creditors.

NEWMAN District Judge.

The referee has filed an opinion in this matter, which comes before the court with a petition to review his findings. The opinion of the referee in the case is as follows: The bankrupt and his wife conjointly participated in the carrying on of the business in question, at a place of business on Broad street, Rome, Ga.; both of them co-operating in the matter of purchasing goods, wares, merchandise, and fixtures, consisting of fruits, foods dispensed as lunches to customers, drinks which were iced for sale, a refrigerator, cash register, and fixtures necessary for the conduct of the business. Both participated in the actual sales and work about the place. In every instance goods, wares, and fixtures were bought in the name of the bankrupt, A. Victor. The fixtures in some instances were bought under formal written contracts signed 'A. Victor,' such contracts as for a $65 McCrary refrigerator and a $313 National cash register, being certified herewith as part of the evidence. Purchases of goods were invariably receipted for in the name of A. Victor; sometimes the wife signing the name, and sometimes the bankrupt doing so, and in instances the children so receipting. The bankrupt attended to small purchases by using his name without express authority in each specific instance, with his wife's knowledge and consent; but in important matters he sought and obtained his wife's consent.

Nothing appeared at any time at the place of business to indicate claim of the ownership or interest in the business on the part of the wife. The window contained a large sign 'A. Victor,' painted there by the Coca-Cola Company, at the direction of A. Victor, and without objection on the part of the wife, who does not disclaim knowledge of its existence or profess objection thereto; the evidence and the manner of both on the stand indicating very strongly that it was the express desire of both for the sign to so remain. A. Victor received $75 per month for six months of the year, and only his clothes the other six months. A large amount of goods were acquired from numerous trade creditors in this course of dealing, all of which were paid independent of the bankruptcy administration. The bankrupt swears that these accounts he paid with his wife's money.

The goods involved in this proceeding, as well as all other goods and fixtures, were bought in the name of A. Victor, and on the strength of his credit entirely-- his explanation being that every one knows A. Victor, and no one knows C. Victor, or words to that effect; that people knew him a hundred times better than his wife, the name of the wife never having appeared in connection with the business, in any way or at any time. The goods now in the possession of the bankrupt under these facts consist of: 'A certain stock of goods and merchandise, located in the storehouse at No. 410 Broad street, in the city of Rome, Georgia, said stock of goods and merchandise consisting of fruits, candies, canned goods, and confections in general, and also fixtures located in said store, consisting of showcases, cash register, refrigerator, and other fixtures used by said bankrupt in connection with his business, conducted in said storehouse. ' No disputes were made as to the nature of the goods, nor its alleged value of $600; but ownership was denied by him, and asserted by bankrupt and his wife to be in his wife.

The city license issued by the municipality of Rome, Ga., for the years of 1914, 1915, and 1916, were issued to C. Victor, the wife. This was after the creation of a debt of $750 by subscription to stock of the Broadstreet Hotel Company. This company is the only creditor listed by the bankrupt in his schedules. The licenses for prior years are not in evidence; the bankrupt testifying that he kept all licenses in his safe, but did not now know where the old licenses were, his counsel stating in open court that some others were in his possession. The claim of the Broadstreet Hotel Company, based upon the second and last installment of the stock subscription, was proved and allowed by Hon. W. S. Rowell. The first installment, in like sum, had been sued to judgment in the state courts, carried to the Court of Appeals of Georgia, and the judgment of the lower court confirmed.

On application the order of the former referee was reopened, the claim considered, and the objections overruled and the claim finally allowed. This judgment of the referee was not appealed from, and is not now on review. The following facts are found as to this debt as bearing upon the main question here for review: The subscription to the stock was taken by J. H. Lanham and E. P. Harvey, acting jointly. At the time the bankrupt, A. Victor, and wife, C. Victor, were present. The bankrupt was told in the presence of his wife that the building of the hotel would enhance property values. The bankrupt discussed the matter at some length with his wife, and the subscription was signed by A. Victor. The wife, after discussion and evident joint consideration with her husband, expressed a desire for the husband to subscribe.

The bankrupt and his wife testified at the hearing. They testify laconically that the wife always owned the business since 1912, at which time Victor had financial troubles and lost his money in New York. That the word 'manager' or 'agent' was never added to the invariably used business title of 'A. Victor,' but that in fact A. Victor always acted as agent for the wife, C. Victor. That the father of C. Victor gave her the business. That the building in which the business was run belongs to the wife, and was deeded to her by A. Victor some years prior to the bankruptcy, and was bought by A. Victor in his own name, with C. Victor's money, and transferred to her.

The bankrupt testifies, in rather categorical manner also, that the business has been run in his name, but only as agent for his wife, for some 18 years. The wife testifies in similar manner to such state of facts existing for many years, but that she only married the bankrupt some 13 years since. He explains that through mistake he listed the claim of Broadstreet Hotel Company in his schedules as Rome Hotel Company.

The stenographer's transcript of the examination of the bankrupt at the first meeting of creditors was offered in evidence and objected to because of the fact that Hon. W. S. Rowell, the referee presiding, was disqualified, and has since formally disqualified, and the matter referred to the acting referee.

This examination, while admissible to contradict the bankrupt on this hearing, and possibly in other proper cases, was held to be inadmissible, and was not considered in making any findings of fact herein reported. The transcript is transmitted, however, along with the record herein.

Findings of Law as Applicable to Facts.

Possession of the res by the bankrupt, or any one for him not having a bona fide adverse claim at the time of the commencement of the proceedings which result in an adjudication, gives the bankruptcy court summary powers to compel its production. The question so stated is fully discussed in Collier on Bankruptcy (9th Ed.) pp. 490 to 498, and specially in numerous holdings of the federal courts; the exceptions being largely based upon comity and discretion, and usually in cases of conflict of jurisdiction between courts. Mueller v. Nugent, 184 U.S. 1, 22 Sup.Ct. 269, 46 L.Ed. 405, 7 Am.Bankr.Rep. 224; Murphy v. John Hofman Co., 211 U.S. 562, 29 Sup.Ct. 154, 53 L.Ed. 327, 21 Am.Bankr.Rep. 487; In re Eppstein, 19 Am.Bankr.Rep. 89, 156 F. 42, 84 C.C.A. 208, 17 L.R.A. (N.S.) 465; Mound Mines Co. v. Hawthorne, 23 Am.Bankr.Rep. 242, 173 F. 882, 97 C.C.A. 394.

Under the Georgia law, possession by the husband and wife is presumptively that of the husband, though the presumption may be rebutted by proof. Perryman v. Morgan, 103 Ga. 555, 29 S.E. 708.

The possession in the case at bar, construing the facts most favorably to the wife, is that of a joint possession in both the husband and wife. And a summary proceeding should lie in such a case to compel relinquishment of the property, at least where the wife is unable to show anything more than a claim which on its face is patently a specious one.

Indeed the facts smack very strongly of fraud. The remarkable business relationship, outlined by the bankrupt and his wife, of a long-continued use of the husband's name alone to buy goods on his credit, admittedly without the slightest influence from the...