Marion Mach. Foundry & Supply Co. v. Girand

• Decision Date: 28 November 1922
• Docket Number: 3879.,3872
• Citation: 285 F. 160
• Parties: MARION MACH. FOUNDRY & SUPPLY CO. v. GIRAND et al. In re McCLEERY.
• Court: U.S. Court of Appeals — Fifth Circuit

285 F. 160

MARION MACH. FOUNDRY & SUPPLY CO. v. GIRAND et al.

In re McCLEERY.

Nos. 3872, 3879.

United States Court of Appeals, Fifth Circuit.

November 28, 1922

Petition for Rehearing Denied January 13, 1923.

George Thompson, Jr., of Fort Worth, Tex. (Thompson, Barwise Wharton & Hiner, of Fort Worth, Tex., on the brief), for appellant and petitioner.

W. D Girand and C. G. Whitten, both of Abilene, Tex. (R. W Haynie, of Abilene, Tex., on the brief), for appellees and respondents.

Before WALKER, BRYAN, and KING, Circuit Judges.

BRYAN Circuit Judge.

November 16, 1920, the petitioner, the Marion Machine Foundry & Supply Company, sold to C. G. McCleery a set of rig irons on credit, upon condition that McCleery would then pay a past-due debt. McCleery gave his check for $613.09, the amount of the past-due debt, and received the rig irons. The check was promptly presented, but payment was refused by the bank upon which it was drawn because of lack of sufficient funds to meet it. Thereupon the manager of the company interviewed McCleery, who stated he would wire to his brother for money. November 19, 1920, an involuntary petition in bankruptcy was filed against McCleery, and the rig irons were subsequently sold by the receivers for $1,340.79. The petitioner filed a petition for the return to it of the proceeds of the sale. The referee held the sale by McCleery was valid, and this action was affirmed on review by the District Judge.

It is not claimed that actual fraud was shown, but petitioner contends that it is entitled to the money held in lieu of the rig irons, because the sale was made only upon condition, which was never performed. We are of opinion that the contention is well founded. It is not necessary to show actual fraud. It is sufficient if in equity and good conscience the proceeds of the sale of the rig irons ought to be paid over to the petitioner. In re American Knit Goods Mfg. Co., 173 F. 480, 97 C.C.A. 486; In re New York Commercial Co., 228 F. 120, 142 C.C.A. 526; Ramey v. Allison, 64 Tex. 697. The case is not affected by the fact that petitioner accepted a check which was not paid. In re Perpall, 256 F. 758, 168 C.C.A. 104.

The question involved is presented both by appeal and by petition to superintend and revise. We are of opinion that the appropriate proceeding is by petition under section 24b of the Bankruptcy Act (Comp. St. Sec. 9608). The question presented is a purely...