Moore v. Yampa Mercantile Co.

• Decision Date: 03 March 1923
• Docket Number: 5929.,5928
• Parties: MOORE v. YAMPA MERCANTILE CO. et al. (two cases).
• Court: U.S. Court of Appeals — Eighth Circuit

287 F. 629

MOORE v. YAMPA MERCANTILE CO. et al. (two cases).

Nos. 5928, 5929.

United States Court of Appeals, Eighth Circuit.

March 3, 1923

Ernest Morris, of Denver, Colo., for appellant and plaintiff in error.

Arthur F. Friedman, of Denver, Colo. (Horace H. Hindry and Guy K Brewster, both of Denver, Colo., on the brief), for appellees and defendants in error.

Before SANBORN and KENYON, Circuit Judges, and POLLOCK, District judge.

SANBORN Circuit Judge.

On June 27, 1921, Herbert E. Moore was adjudged a bankrupt upon an involuntary petition which charged that on March 9, 1921, he had made a general assignment for the benefit of his creditors. To the petition Mr. Moore answered: First, that on and before March 9, 1921, he was chiefly engaged in farming and tilling the soil, and was not subject to adjudication in bankruptcy; and, second, that he had not made a general assignment for the benefit of his creditors and was not insolvent, and he demanded that the issue regarding his insolvency be inquired of by a jury. The court called a jury, all the evidence at the trial and hearing upon all the issues was presented to them, at the close of the trial the court instructed them that Mr. Moore made a general assignment for the benefit of his creditors as charged in the petition, and submitted to them the issue whether or not in February and March, 1921, the defendant was chiefly engaged in farming or tilling the soil. The jury found that he was not so engaged and that at that time he was chiefly engaged in the business of lumbering. Thereupon the court adjudged him a bankrupt, and from that decree he has appealed, and he has also sued out a writ of error to reverse it.

The appellees have made a motion to dismiss the appeal on the ground that, because the appellant demanded and obtained a jury trial of the issues in the case, the adjudication of bankruptcy therein is reviewable only by a writ of error. But the issue whether Mr. Moore was chiefly engaged in farming or in lumbering was not one of the issues regarding which he had a right, under section 19a of the Bankruptcy Act (Comp. Stat Sec. 9603), to a trial by jury. Consequently their verdict upon that issue was merely advisory to the court, and the adjudication of bankruptcy unavoidably evidences the finding and decree of the court below as a court of equity that he was not engaged chiefly in farming and tilling the soil when and immediately before he committed the act of bankruptcy, and that finding and decree is reviewable by appeal, and not by writ of error.

The only issues upon which a defendant in a petition for his adjudication in bankruptcy has the right to a trial by jury under section 19a, are the question of his insolvency, and the question of his commission of an act or the acts of bankruptcy alleged in the petition. The trial of these two issues by a jury on the demand of the defendant must be according to the ordinary course of common law and their trial is reviewable by an appellate court only by writ of error. Elliott v. Toeppner, 187 U.S. 327, 334, 23 Sup.Ct. 133, 47 L.Ed. 200; In re Neasmith, 147 F. 160, 163, 77 C.C.A. 402. But the question whether a defendant in a petition for his adjudication in bankruptcy was chiefly engaged in farming or tilling the soil is not one upon which he has the right to a jury trial, and when that question is submitted to a jury their verdict is advisory only, as in other suits in equity, and the finding and decree of the court upon that issue is not reviewable by writ of error, for errors of the court in its charge, or for its failure to charge the jury, but it is reviewable only by appeal, as in ordinary suits in equity, on the ground that the finding and decree upon this issue were unjust and inequitable. In re Neasmith, 147 F. 163, 77 C.C.A. 402; Stephens v. Merchants' Nat. Bank, 154 F. 341, 343, 83 C.C.A. 119; Carpenter et al. v. Cudd et al., 174 F. 603, 606, 98 C.C.A. 449, 20 Ann. Cas. 977. The appeal in this case, therefore, properly presents for determination here the question whether or not the finding of the decree below that the defendant was not chiefly engaged in farming or tilling the soil on March 9, 1920, was unjust or inequitable, and that question must be decided by this court as upon a trial de novo, in the light of the evidence upon that issue in the court below. The motion to dismiss the appeal must therefore be denied. In re Iroquois Hotel & Apartment Co., 158 F. 1020, 86 C.C.A. 672.

The alleged errors assigned to the rulings, findings, and decree of the court below at the hearing of the issue whether the defendant was chiefly engaged in farming or tilling the soil when and before he made the assignment have received examination to ascertain whether that trial, finding, and decree was unjust or inequitable, either on account of any of the rulings assigned as error, or because the evidence upon that issue does not sustain the finding. The evidence and the briefs of counsel upon this question have been carefully read and thoughtfully considered. The evidence upon either side of the question, standing alone, would be sufficient to sustain a finding in its favor. When all the evidence is considered, it is conflicting. The court below saw and heard the witnesses, and thus had a far better opportunity than the members of this court rightly to determine the weight and credibility of their testimony. A recital of that testimony or of parts of it here would serve no useful purpose, because no subsequent case will present the same evidence and the same conflicts in it. Suffice it to say that a thorough search of the record has disclosed to this court no material error of law or mistake of fact in the hearing, finding, and adjudication of this question, on account of which it appears that the finding was either unjust or inequitable, and that finding and the adjudication based upon it must be permitted to stand, under the familiar rule that, when the chancellor has considered conflicting evidence and made his finding and decree thereon, they must be taken to be presumptively right, and unless an obvious error has intervened in the application of the law, or some serious mistake has been made in the consideration of the evidence, they ought not to be disturbed. De Laval Separator Co. v. Iowa Dairy Separator Co., 194 F. 423, 425, 114 C.C.A. 385.

On March 9, 1921, the defendant, Mr. Moore, made an assignment of his property in writing to L. W. Holmberg, which was signed by both parties, was acknowledged by Moore before a notary public, and was recorded on March 12, 1921, in the records of the clerk and recorder of Routt county, Colo. At and prior to that time he had been and was the owner of farm lands and was superintending farm operations thereon, and he was also engaged in lumbering under the name of White Pine Lumber Company. The court below charged the jury that this assignment was a general assignment by the defendant for the benefit of his creditors, and that it constituted an act of bankruptcy, and the jury so found. Counsel for the defendant assigns this ruling and the adjudication of bankruptcy based upon it as error, because, as he contends, (a) this assignment was not an assignment of all the defendant's property, but of only that part thereof that was usable and used by the defendant in his lumbering business; (b) this was not an assignment for the benefit of all the defendant's creditors, but for only that part of his creditors, that had become such through the defendant's lumbering business; and (c) the assignment was conditioned by the qualification of the assignee, Holmberg, as administrator of the estate assigned, and he never qualified under this assignment.

The assignment recites that whereas the assignor has operated a certain milling business under the name and style of White Pine Lumber Company, whereas said ...