McKey v. Smith
| Decision Date | 26 October 1912 |
| Citation | 99 N.E. 695,255 Ill. 465 |
| Parties | McKEY v. SMITH et al. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Error to Superior Court, Cook County; Charles A. McDonald, Judge.
Bill by Frank M. McKey, trustee, against Fred Smith and others. Decree for complainant, and defendants bring error. Reversed and remanded.
Kruse & Peden and R. C. Merrick, all of Chicago, for plaintiffs in error.
John C. Farwell, of Chicago, for defendant in error.
This writ of error is prosecuted to reverse a decree setting aside a deed from Fred Smith to his brother, Herman, and another from the latter to Fred Smith's wife, rendered by the superior court of Cook county in a suit brought by Frank M. McKey, as trustee in bankruptcy of Fred Smith.
[1]The bill alleged that the complainant was elected trustee in bankruptcy of Fred Smith on February 23, 1910, that his bond as such trustee was approved on March 3, 1910, and that Fred Smith was adjudged a bankrupt on June 3, 1910. The answer neither admitted nor denied that the complainant was such trustee, but called for strict proof of such fact. No proof of it appears in the record. The complainant introduced in evidence an order of Frank L. Wean, referee in bankruptcy, entitled, ‘In the matter of Fred Smith, individually and as copartner of the firm of Brown & Smith, bankrupt,’ reciting that ‘Frank M. McKey, the trustee herein, be and he hereby is given leave to institute suit against said Fred E. Smith, and any person or persons holding under him in the superior court of Cook county, Illinois, for the purpose of setting aside a certain conveyance of real estate made by said Fred E. Smith,’ etc. This order was unnecessary to the maintenance of the suit. In any event, it was no evidence of the complainant's election and qualification as trustee. There was a record of these acts if they existed, but no such record was introduced.
[2] The bill was filed under subdivision ‘e’ of section 70 of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 566 [U. S. Comp. St. 1901, p. 3452]), which provides that ‘the trustee may avoid any transfer by the bankrupt of his property which any creditor of the bankrupt might have avoided,’ etc. It alleges that the conveyance by Fred Smith was made on December 11, 1909, but it does not allege that he was then or at any time insolvent; that he had not other property amply sufficient to pay all his debts, or that he owed any debts either then or at any other time; that any claims had been allowed against his estate in bankruptcy, or that any unpaid debts existed at the time the bill was filed. The bill is insufficient to support a decree, because, while it contains a general allegation that the conveyance was made for the purpose of defrauding the creditors of Fred Smith, no facts are stated on which the conclusion so alleged can rest.
[3]There was neither allegation nor proof that any claims of creditors had been allowed in the bankruptcy proceedings. In ordinary bills of this character it is essential to the maintenance of the suit that the complainant shall have reduced his claim to...
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