Paper v. Stern, 3,668.
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
| Citation | 198 F. 642 |
| Docket Number | 3,668. |
| Parties | PAPER et al. v. STERN. |
| Decision Date | 19 August 1912 |
198 F. 642
PAPER et al.
v.
STERN.
No. 3,668.
United States Court of Appeals, Eighth Circuit.
August 19, 1912
Syllabus by the Court
A guarantor, an indorser, an accommodation maker, or a surety, on the obligation of a bankrupt, is a creditor within the meaning of section 60b of the Bankruptcy Act of July 1, 1898, c. 541, 30 Stat. 562 (U.S. Comp. St. 1901, p. 3445).
The fact that the guarantor or indorser did not pay or induce the payment of the debt, but the payment was made by the bankrupt, does not except the case from the operation of the rule.
A transfer by a bankrupt within four months of the filing of the petition does not create a voidable preference unless he is 'insolvent'; that is to say, unless his property at a fair valuation is insufficient to pay his debts at the time of the transfer.
Proof of knowledge or notice of facts which give a creditor, or a person to be benefited by a preference, reasonable cause to believe at the time of the transfer that it is intended to give a preference thereby, is indispensable to the establishment of a voidable preference.
Suspicion, fear, and facts that arouse suspicion and fear in the mind of the creditor, or the party to be benefited, but give no reasonable ground for him to believe that a preference is intended by the transfer, do not make such a preference voidable. [198 F. 643]
Ball, Watson, Young & Lawrence, for appellants.
Sam T. Swansen and T. C. Richmond (Ralph W. Jackman, of counsel), for appellee.
Before SANBORN and HOOK, Circuit Judges, and WILLARD, District Judge.
SANBORN, Circuit Judge.
Sam Paper and Abraham Yoffey have appealed from a decree that a transfer of some of the property of the bankrupt, Dave Naftalin, to them on February 13, 1908, constituted a voidable preference under section 60b of the Bankruptcy Act of July 1, 1898, c. 541, 30 Stat. 562 (U.S. Comp. Stat. 1901, p. 3445), and that the trustee recover of them the value of this property. Naftalin was adjudged a bankrupt on March 24, 1908. He had been engaged in the business of a retail merchant of clothing, gents furnishing goods, boots, and shoes at Fargo, N.D., for about four years. He had a stock of goods worth somewhere from $5,000 to $10,000. In March, 1907, he gave his promissory note for $3,000, payment of which was guaranteed by the appellants to the First National Bank of Fargo, the note and guaranty were renewed for 90-day periods, and one or two small payments were made upon the debt until, on February 13, 1908, the bank held the note of Naftalin and the guaranty of the appellants for $2,948.35, principal and interest, dated December 16, 1907, due March 16, 1908. Naftalin was, and for some months had been, unable to pay his debts as they matured, the bank had received...
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In re Schindler, No. 61 B 336(1).
...can be made promptly effective by the owner of property to pay his debts. Stern v. Paper, 8 Cir., 183 F. 228, 230 affirmed Paper v. Stern, 198 F. 642 (C.C.A.8th); In re Sedalia Farmers' Co-Op Packing and Produce Company, 268 F. 898, 900 (D.C.Mo.). The Court of Appeals for the Second Circuit......
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Brown Shoe Co. v. Carns, No. 9612.
...Ed., 1923) pp. 1300-1302; 4 Remington on Bankruptcy (3d Ed., 1923) ß 1823. Mere suspicion is insufficient. Paper v. Stern (C. C. A. 8) 198 F. 642, 645; Nichols v. Elken (C. C. A. 8) 225 F. 689, 691; Bassett v. Evans (C. C. A. 8) 253 F. 532, 535; 2 Collier on Bankruptcy (13th Ed., 1923) p. 1......
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In re Fulghum Const. Co., Bankruptcy No. 380-00235
...236 F. 42, 47, certiorari denied 243 U.S. 648, 37 S.Ct. 475, 61 L.Ed. 946; Stern v. Paper, D.C.N.D., 183 F. 228, 230, 231, affirmed 8 Cir., 198 F. 642. And fair market value implies not only a "willing buyer," but a "willing seller." Grandison v. National Bank of Commerce, 2 Cir., 231 F. 80......
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Bank of Forest v. Capital Nat. Bank, 32199
...292; McGill v. Commercial Credit Co., 243 F. 637; In re Chappell, 113 F. 545; Schuette v. Swank, 109 A. 531; Stern v. Paper, 183 F. 228, 198 F. 642; Rutland Bank v. Graves, 156 F. 168; In re Cleveland Discount Co., 9 Fed. (2d), 97; In re Klein, 197 F. 241; Empire State Trust Co. v. Fisher, ......
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In re Schindler, No. 61 B 336(1).
...can be made promptly effective by the owner of property to pay his debts. Stern v. Paper, 8 Cir., 183 F. 228, 230 affirmed Paper v. Stern, 198 F. 642 (C.C.A.8th); In re Sedalia Farmers' Co-Op Packing and Produce Company, 268 F. 898, 900 (D.C.Mo.). The Court of Appeals for the Second Circuit......
-
Brown Shoe Co. v. Carns, No. 9612.
...Ed., 1923) pp. 1300-1302; 4 Remington on Bankruptcy (3d Ed., 1923) ß 1823. Mere suspicion is insufficient. Paper v. Stern (C. C. A. 8) 198 F. 642, 645; Nichols v. Elken (C. C. A. 8) 225 F. 689, 691; Bassett v. Evans (C. C. A. 8) 253 F. 532, 535; 2 Collier on Bankruptcy (13th Ed., 1923) p. 1......
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In re Fulghum Const. Co., Bankruptcy No. 380-00235
...236 F. 42, 47, certiorari denied 243 U.S. 648, 37 S.Ct. 475, 61 L.Ed. 946; Stern v. Paper, D.C.N.D., 183 F. 228, 230, 231, affirmed 8 Cir., 198 F. 642. And fair market value implies not only a "willing buyer," but a "willing seller." Grandison v. National Bank of Commerce, 2 Cir., 231 F. 80......
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Bank of Forest v. Capital Nat. Bank, 32199
...292; McGill v. Commercial Credit Co., 243 F. 637; In re Chappell, 113 F. 545; Schuette v. Swank, 109 A. 531; Stern v. Paper, 183 F. 228, 198 F. 642; Rutland Bank v. Graves, 156 F. 168; In re Cleveland Discount Co., 9 Fed. (2d), 97; In re Klein, 197 F. 241; Empire State Trust Co. v. Fisher, ......