Nebraska Mercantile Co. v. Nathanson Bros. Co.

• Decision Date: 11 May 1927
• Docket Number: No. 7571.,7571.
• Citation: 20 F.2d 330
• Parties: NEBRASKA MERCANTILE CO. et al. v. NATHANSON BROS. CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

20 F.2d 330 (1927)

NEBRASKA MERCANTILE CO. et al. v. NATHANSON BROS. CO. et al.^*

No. 7571.

Circuit Court of Appeals, Eighth Circuit.

May 11, 1927.

Harold M. Kelley, of Omaha, Neb. (Francis A. Mulfinger and Robert J. Webb, both of Omaha, Neb., on the brief), for appellants.

George Doane Keller, of Omaha, Neb. (Charles B. Keller, of Omaha, Neb., on the brief), for appellees.

Before STONE and KENYON, Circuit Judges, and POLLOCK, District Judge.

POLLOCK, District Judge.

This appeal brings up for review an order of the District Court refusing to allow a claim of $16,444.67 against the bankrupt estate of Black & Hansen Company, duly adjudged a bankrupt March 5, 1924; also, holding claimant, the appellant (hereinafter called the Mercantile Company), had received a voidable preference, which must be returned. This order was made on a petition to review an order of the referee allowing the claim and denying the Mercantile Company had received any preferential payment, which should be returned to the estate before its allowance. The trial court, on petition to review, set aside this order of the referee and entered the following order:

"In the matter of Black & Hansen Company, Bankrupt. No. 2856. Bankruptcy Order.

"This matter came on for hearing on the petition to review an order of the referee in bankruptcy, overruling objections of certain creditors to the allowance of claim of Nebraska Mercantile Company, in the sum of $16,444.67, and allowing said claim in full, and also refusing to find certain payments to have been preferences. After due consideration thereof, and being fully advised in the premises,

"It is ordered by the court that the order of the referee be and the same is hereby reversed, with directions to find the payments to be preferences and to require the substituted parties claimants to restore the same to the trustee."

An examination of the record discloses, before adjudication in bankruptcy and before the bankruptcy proceeding was instituted, the Mercantile Company, claimant, in pursuance of a resolution passed by its board of directors, assigned all its property to one F. J. Coates, as trustee, and the corporation was dissolved. The rights and powers conferred upon Coates as assignee by the instrument of assignment read, among other things, as follows:

"* * * Do hereby sell, assign, transfer, and convey to F. J. Coates, as trustee, for the use and benefit of the stockholders of the Nebraska Mercantile Company, all of the accounts receivable of said corporation as of this date, including all notes, mortgages, judgments, and liens of every kind and description, wheresoever situated, vesting full power and authority in said F. J. Coates, trustee, to collect said accounts, notes, mortgages, and liens, to file suit in his own name, as trustee, to execute releases of mortgages, judgments, and liens, and to do such other acts as may be necessary in the collection of said assets.

"Done at Grand Island, Nebraska, this 27th day of December A. D. 1924. Signed C. C. Hansen, President. Corporate Seal."

The claim of the Mercantile Company against the bankrupt estate was made and filed by C. C. Hansen on February 2, 1925. Hansen had been the former treasurer of the corporation. Thereafter, at a hearing before the referee on December 29, 1925, as a statute of the state makes the directors of a dissolved corporation trustees of its properties for the benefit of its shareholders, and as the proofs at the hearing before the referee did not disclose who said directors were, time was granted to the claimants until January 9, 1926, to establish who said last directors of the dissolved corporation were. Thereafter, on application of F. J. Coates, the directors of the corporation were by order of the referee allowed to be substituted in place of the former treasurer as claimant for the corporation, and the claim was thereupon allowed by the referee.

The objection to the allowance of this demand was first made by the trustee in bankruptcy. Thereafter amended specifications of objections were filed by the trustee in bankruptcy and by creditors of the bankrupt, Nathanson Brothers Company and Carson, Pirie, Scott & Co., and thereafter, before hearing of the claim, the trustee withdrew his objections to its allowance, and the claim was contested by the creditors alone.

As a claim presented against a bankrupt estate under the Bankruptcy Act (Comp. St. § 9585 et seq.) and General Orders in Bankruptcy, when properly verified and presented, places the duty of coming forward with proof upon the objectors to its allowance (Whitney v. Dresser, 200 U. S....