Philips v. Turner

• Decision Date: 22 April 1902
• Docket Number: 1,121.
• Citation: 114 F. 726
• Parties: PHILIPS v. TURNER.
• Court: U.S. Court of Appeals — Fifth Circuit

114 F. 726

PHILIPS v. TURNER.

No. 1,121.

United States Court of Appeals, Fifth Circuit.

April 22, 1902

It appears from the record that several creditors of A. B. Wolf holding claims for an amount sufficient, filed a petition in the district court to have him adjudged a bankrupt. The ground of bankruptcy alleged was that within four months then next preceding he had sold and delivered to the petitioner Philips, one of his creditors, all of his property consisting of real estate, merchandise, choses in action etc., with intent to give said Philips an unlawful preference. Simultaneously a petition was filed by the same creditors against the New Orleans Chemical Company, the sheriff of Scott county, Miss., and said Philips, reciting the fact of the petition in involuntary bankruptcy having been filed, and the further facts that the said sale had been made to Philips with fraudulent intent; that the New Orleans Chemical Company had a few days before procured a writ of attachment against Wolf, which the plaintiff had levied upon a large part or the whole of the property of said Wolf, and was in possession of the sheriff, unless it should, before action on the petition, be replevied by Wolf or Philips. It was charged that, if the chemical company should be allowed to proceed with its attachment, it would be disposed of if not replevied, and would be dissipated, or be so intermingled or confused as to defeat the purpose of the bankruptcy proceedings. An injunction was prayed for to restrain the further prosecution of the attachment suit, and to prevent Wolf, Philips, and the sheriff from intermeddling with or recovering any of the property, and for the appointment of a receiver to take charge of the same until a trustee could be appointed after an adjudication of Wolf as a bankrupt. An injunction was granted upon petitioner entering a bond in the sum of $2,000 to plaintiff Philips. Philips, having been duly summoned, moved for a dissolution of the injunction four days later on affidavits and testimony. At the same time he filed an answer, claiming to have acquired the property from Wolf in good faith; that the price in hand paid was all cash except $1,850 borrowed money owing to him by Wolf. He also alleged that a small lot of flour, of the value of $125, which had never belonged to Wolf, was in his store with the stock bought of the latter. He denied the charge of having acquired Wolf's property in contravention of the bankrupt law. The motion to dissolve after argument by both parties, was denied, but the injunction was modified to the extent of allowing Philips to recover his flour. In the same order the matter was referred to the referee. Nugent, for full investigation and finding as to the solvency of Philips, the bona fides of the transfer of said property, and of the solvency or insolvency of Wolf, and all other material facts. On December 3, 1900. Wolf was adjudged bankrupt by default. The referee reported, on December 28th, the facts as found by him. He found: (1) That Wolf was insolvent at the time of the transfer of the stock of merchandise and accounts to Philips; (2) that $1,800 of the consideration was a pre-existing debt; (3) that Philips had reasonable cause to believe that Wolf was insolvent at the time of...