Metsker v. Bonebrake

• Decision Date: 05 March 1883
• Citation: 2 S.Ct. 351,27 L.Ed. 654,108 U.S. 66
• Parties: METSKER and Wife v. BONEBRAKE, Assignee, etc
• Court: U.S. Supreme Court

108 U.S. 66

2 S.Ct. 351

27 L.Ed. 654

METSKER and Wife v. BONEBRAKE, Assignee, etc.

March 5, 1883.

[Syllabus from pages 66-67 intentionally omitted]

[Statement of Case from pages 67-68 intentionally omitted] John A. Finch, S. Shellabarger, and J. M. Wilson, for appellants.

W. H. Calkins and A. C. Harris, for appellee.

MILLER, J.

This is a bill in chancery, brought by Bonebrake as assignee in bankruptcy of John R. Metsker, against said Metsker and his wife. The object of the bill is to subject to administration, as part of the assets of the bankrupt, a farm of 162 acres of land, on which Metsker and his wife were living, the legal title of which was in Mrs. Metsker.

It appears that on August 2, 1876, Metsker and wife conveyed this land to McCole, who, on the fourth day of the same month, conveyed it to Mrs. Metsker, the consideration in each deed being recited as $8,000.

On December 1, 1876, one Poe, with whom Metsker was in partnership in the hardware business, filed his petition in bankruptcy, alleging that Metsker would not join him, and making him a party, and praying that he be adjudged a bankrupt. On the twenty-ninth of that month Metsker came in and confessed himself a bankrupt, and was so adjudged.

The charging part of the bill, as regards the invalidity of the title conveyed to Mrs. Metsker by these two deeds, reads as follows:

'On that day, to-wit, August 2, 1876, within four months of the time of filing said petition in bankruptcy, the said John R. Metsker, being the owner, in his own right, of the real estate above described, and being indebted as aforesaid, with the fraudulent intention of defeating the operation and effect of the bankrupt law; and with the fraudulent intention of preventing his property from being distributed and applied in payment of his debts, as provided for in the bankrupt law; and with the intention of defrauding and cheating his creditors; and with the intention of preferring, in violation of the provisions of the bankrupt law, a pretended claim of the defendant Elizabeth Metsker, which claim, your orator says, was unjust and incorrect, and not a valid and legal claim against said John R. Metsker,—the said John R. Metsker, together with his wife, the defendant Elizabeth Metsker, did execute, without any consideration whatever, to one C. J. McCole, who was a party to such fraudulent purpose, a deed of conveyance of said real estate; and the said grantee, C. J. McCole, in pursuance of the previous understanding and agreement, and for the purpose of carrying out the fraudulent intent before expressed, did convey said real estate to the defendant Elizabeth Metsker, wholly without any consideration, on the fourth day of August, 1876.

'And your orator states that said Elizabeth Metsker was fully cognizant of the fraudulent and wrongful intention of said John R. Metsker, and participated in the same, and joined in the deed to McCole for the purpose of carrying out the same, and accepted said fraudulent conveyance from C. J. McCole with full knowledge of its purpose, and with the intention of carrying out said fraudulent purpose.'

To this bill Metsker and his wife filed their answer, under oath, in which they admit the conveyances and the bankruptcy proceedings, but denying all fraud in the transaction, and that Metsker was in failing circumstances when the deeds were made, or that they knew or believed he was unable to pay his debts. They aver that after said conveyances were made a large part of the indebtedness of Poe & Metsker was paid off in the ordinary course of business. They further allege that the conveyances mentioned were made in order and for the express purpose, and for no other purpose, of paying a debt of $5,700 which Metsker owed his wife, and the interest accumulated thereon, for money loaned by her to him, which he had promised to repay to her on demand.

It is evident that the bill is framed upon the idea that section 5128 of the Revised Statutes was in force, and that the periods within which such conveyances by an insolvent could be assailed as void under the bankrupt law were four and six months, and all its allegations seemed aimed at such acts as would be unassailable after those periods. But the act of 1874 has shortened these periods to four and two months in cases of involuntary bankruptcy. 18 St. 180, § 10.

We do not doubt that Metsker's was a case of involuntary or compulsory bankruptcy, within the meaning of this amendment. The distinction intended by this language is clearly between the cases in which the bankrupt himself and of his own volition initiates proceedings in bankruptcy, and those in which they are commenced by some one else against him.

In the one case it is voluntary and in the other compulsory. It is not a voluntary bankruptcy if the man is forced into it against his will by his partner, any more than by any one else, and it is compulsory and involuntary if he refuses to join in such case and is forced into it, as much as in any other enforced bankruptcy.

These deeds cannot be impeached, therefore, on the grounds of preference or payment in violation of the...