Parker v. Gates
| Decision Date | 20 February 1911 |
| Citation | 135 S.W. 330,97 Ark. 621 |
| Parties | PARKER v. GATES |
| Court | Arkansas Supreme Court |
Appeal from Carroll Circuit Court, Western District; Joseph S Maples, Judge; affirmed.
Judgment affirmed.
Festus O. Butt, for appellant.
The payment being a preference, and its return into the source from which it emanated, the Lloyd estate, being under coercion from the Federal court, justice required that all parties should thereby be placed in statu quo, and their relative positions prior to the preference reinstated. 1 F Stat. Ann. 664; 11 F. 353. The fact that appellant surrendered his preference upon demand by the legal authority, and without waiting to be sued or declared to be in contempt of court, ought not to militate against his rights. 142 F. 68; 134 F. 477.
Charles D. James, for appellee.
The payment to appellant was not, under the bankrupt law as amended in 1903, a preference, hence the trustee could not have enforced his demand by suit. The payment to the trustee was therefore a voluntary one. Appellant, seeking to recover against appellee, would be held to make the same proof that the trustee would be required to make under the act, had he attempted by suit to recover the $ 900 back from appellant. Act 1903, § 13, subdivisions "a" and "b;" 63 N.Y.App. 498. If appellant when he received the payment from Lloyd did not have cause to believe it was intended as a preference, he had the right to keep the money. 182 U.S. 438; 59 N.Y. App. 555; 1 F. 399; 97 U.S. 80, 24 Law. Ed. 972; 18 F. 164; 10 Ohio Dec. 405; 108 U.S. 74, 27 Law Ed 640; 112 Mass. 100; 13 Wall. (U. S.) 40; 21 Id. 360; 15 N.H. 115.
W. J. Lloyd owed appellant, J. L. Parker, and executed to the latter his promissory note, with appellee Gates as surety, for $ 500, due six months after date. Shortly after the maturity of the note Lloyd assigned to appellant certain other notes in satisfaction of this note, which was cancelled and surrendered. About three weeks thereafter Lloyd was adjudged to be a bankrupt, and appellant attempted to prove, as a claim against the estate, another note executed to him by the bankrupt, but the referee in bankruptcy disallowed the claim on the ground that he had received a preference in the payment of the original note, and ordered that said original note be allowed against the estate upon the return by appellant to the trustee of the assigned notes. Appellant thereupon delivered to the trustee said assigned notes and the amounts he had collected thereon, and instituted this action against appellee, as surety on said original note, which had been surrendered, to recover the balance, after crediting the several amounts paid by the trustee out of the bankrupt's estate.
Appellant bases his right to recover on the alleged fact that the payment of the note constituted a preference, and that he had been compelled to refund it to the trustee in bankruptcy.
Appellant voluntarily returned the proceeds of the alleged preferential satisfaction of the note, and, in order to sustain his right to recover, it devolved upon his to prove that the payment constituted a preference within the meaning of the bankruptcy act. The bankruptcy act (sec. 60, subdiv. b) provides that "if a bankrupt shall have given a preference and the...
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