John Wall v. Walter Cox

• Court: U.S. Supreme Court
• Writing for the Court: Gray
• Citation: John Wall v. Walter Cox, 181 U.S. 244, 21 S.Ct. 642, 45 L.Ed. 845 (1901)
• Decision Date: 29 April 1901
• Docket Number: No. 504,504
• Parties: JOHN D. WALL and Thomas W. Huske, Trading as Wall & Huske, Appts. , v. WALTER O. COX, Trustee of W. H. Gilbert

181 U.S. 244

21 S.Ct. 642

45 L.Ed. 845

JOHN D. WALL and Thomas W. Huske, Trading as Wall & Huske, Appts.,

v WALTER O. COX, Trustee of W. H. Gilbert.

No. 504.

Submitted April 15, 1901.

Decided April 29, 1901.

Messrs. Clement Manly and Watson, Buxton, & Watson for appellants.

Messrs. Louis M. Swink and Lindsay Patterson for appellee.

Mr. Justice Gray delivered the opinion of the court:

On October 12, 1899, certain creditors of W. H. Gilbert filed against him a petition in bankruptcy in the district court of the United States for the western district of North Carolina, alleging that he was insolvent, and on October 10, 1899, transferred his stock of goods, with intent to hinder, delay, and defraud his creditors, by a bill of sale to John D. Wall and Thomas W. Huske.

On October 14, 1899, the district court issued an order of notice to Wall and Huske to show cause on October 24, 1899, why they should not be perpetually enjoined from disposing of the goods alleged to have been purchased by them from Gilbert, and meanwhile restraining them from disposing of it. At the time of the issue of that order, Wall and Huske had those goods in their possession.

The district court, on October 27, 1899, adjudged Gilbert a bankrupt, and on November 6, 1899, 'ordered that the restraining order heretofore issued be continued until the appointment and qualification of trustee of W. H. Gilbert, bankrupt. Upon the appointment and qualification of said trustee, in a proper case and upon a proper showing, an injunction or restraining order may be obtained upon application, in which Wall and Huske, defendants above named, may be made parties, restraining the sale or other disposition of any of the property until a hearing may be had and the matters at issue be determined, either by a suit in equity or action at law in the United States courts or the courts of the state, as petitioners may be advised.'

Walter D. Cox, on November 23, 1899, was duly elected and qualified as trustee of Gilbert, Bankrupt, and on December 6, 1899, filed a plenary bill in equity in the district court of the United States for the western district of North Carolina against Wall and Huske, to set aside as fraudulent the sale by Gilbert to them, alleging that Cox had requested them to deliver the property to him as trustee, to be divided among Gilbert's creditors, but they had refused to do so and alleged that the sale to them was valid, and they thereby acquired title to the property, and were purchasers in good faith and for a present fair consideration. The bill prayed that the sale be set aside, and the property be decreed to belong to Cox as part of the bankrupt's estate, and for an injunction and a receiver.

On December 16, 1899, Cox filed a supplemental bill setting forth the former bill and its service upon Wall and Huske, alleging that the property was within the district and in the jurisdiction of this court, and was deteriorating in value by reason of being stored.

At the time of the filing of these bills and of the service of the subpoena upon Wall and Huske, they were in possession of the stock of goods, holding it under the bill of sale from Gilbert.

On the filing of the bill the district judgeissued an order to Wall and Huske to show cause why a receiver should not be appointed to take charge of the stock of goods, and issued an injunction restraining them from disposing of it until the further order of the court. By consent the hearing was postponed until January 9, 1900.

On January 6, 1900, Wall and Huske, 'specially appearing under protest for the purpose of this plea, and for no other,' filed a plea and demurrer assigning as reasons that the plaintiff had an adequate remedy at law; that the district court had no jurisdiction to entertain this bill, or to determine the question arising between the plaintiff, as trustee in bankruptcy of Gilbert, and these defendants; that the defendants claimed title to the property described in the bill under a purchase from Gilbert prior to the institution of proceedings in bankruptcy against him;...