Smith v. Gaskill

• Decision Date: 02 June 1925
• Docket Number: No. 18725.,18725.
• Citation: 272 S.W. 1087
• Parties: SMITH v. GASKILL.
• Court: Missouri Court of Appeals

272 S.W. 1087

SMITH v. GASKILL.

No. 18725.

St. Louis Court of Appeals. Missouri.

June 2, 1925.

Appeal from Circuit Court, Rails County; Charles T. Hays, Judge.

"Not to be officially published."

Action by H. L. Smith, trustee of the bankrupt estate of Charles D. Campbell, against William Gaskill. From a judgment for plaintiff, defendant appeals. Affirmed.

Joseph F. Barry and Onie D. Newton, both of New London, for appellant.

Rendlen & White, of Hannibal, for respondent.

DAVIS, C.

This is an action by a trustee in bankruptcy, under section 67 of the Bankruptcy Act (U. S. Comp. St. § 9651), to recover money obtained by a judgment creditor of the bankrupt in garnishment proceedings. A jury being waived, the court rendered judgment in favor of plaintiff for the sum of $127.50 and costs; defendant appealing therefrom.

Plaintiff's evidence tends to show that the parties agreed and stipulated, in substance, that Charles D. Campbell, formerly of Rails county, Mo., was duly adjudged a bankrupt by the United States court having jurisdiction on September 22, 1921; that plaintiff was appointed his trustee in bankruptcy, and was authorized by the referee to file this action; that defendant was plaintiff in an action against Campbell, the bankrupt; that defendant obtained judgment against, the bankrupt in Justice of the Peace Brown's court in Rails county on August 12, 1921, for $134.18; that on August 28, 1921, execution on said judgment was issued and placed in the hands of the sheriff; that on said August 28, 1921, one Meyer was summoned as garnishee, who, on September 2, 1921, with the knowledge of the sheriff, paid defendant the sum of $40; that on September 22, 1921, the day Campbell was adjudged a bankrupt, the sheriff summoned one Caldwell as garnishee in the above suit, and the said justice, on September 28, 1921, after a hearing, ordered Caldwell to pay the sheriff $100; that on May 6, 1922, upon the debt and judgment and under execution, Caldwell, the garnishee, paid the sheriff $100, out of which the sheriff, on May __, 1922, paid costs of $12.50, and $87.50 to defendant on account of said judgment; that the costs taxed in the case of Gaskill v. Campbell were $12.50.

The bankrupt testified that he was insolvent when defendant obtained judgment against him in the justice court. The trustee testified that he notified the sheriff and defendant that he looked to them to pay him the $40 paid by Meyer and the $100 paid by Caldwell, demanding this as part of the bankrupt estate, which they refused.

The attorney for the trustee testified that, about October 29, 1921, in behalf of the trustee, he filed before Justice Brown an intervening petition of the trustee in the case styled Gaskill v. Campbell, which was never pressed for hearing; that he discussed the matter with the attorney for defendant, stating that he would not push the matter in the justice court, and would file proceedings in the circuit court of Rails county. The attorney for defendant wrote the attorney for the trustee on November 11, 1921, stating that he reached the conclusion that he would prefer to have him file his petition in the circuit court, stating the trustee's cause of action in the usual way, and that he (attorney for defendant) would enter appearance and file an answer for defendant, and do all that he could to get action at the present term of court. The attorney for the trustee then prepared a petition and sent it to the sheriff and the attorney for defendant; that afterwards the original petition in this cause was filed November 17, 1922, in the circuit court of Rails county, and defendant entered his voluntary appearance, waiving service of process, and asking leave to file an answer on and before December 15, 1922, which was afterwards done; that on March 5, 1922, plaintiff filed his amended petition on which the cause was tried; that on February 26, 1923, the trustee moved the court, by written application, to dismiss the petition filed therein in his behalf; Justice Brown on said day making the order as requested.

On cross-examination, the bankrupt was permitted to testify, without objection, that the $100, owing by Caldwell, did not belong to him and never did, but that it belonged to his two sons for working that summer for him (the bankrupt).

Section 67f of the Bankruptcy Act (U. S. Comp. St. § 9651), reads:

"That all levies, judgments, attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien shall be deemed wholly discharged and released from the same, and shall pass to the trustee as a part of the estate of the bankrupt, unless the court shall, on due notice, order that the right under such levy, judgment, attachment, or other lien shall be preserved for the benefit of the estate; and thereupon the same may pass to and shall be preserved by the trustee for the benefit of the estate as aforesaid. And the court may order such conveyance as shall be necessary to carry the purposes of this section into effect: Provided, that nothing herein contained shall have the effect to destroy or impair the title obtained by such levy, judgment, attachment, or other lien, of a bona fide purchaser for value who shall have acquired the same without notice or reasonable cause for inquiry."

I. Defendant, contending that section 67f of the Bankruptcy Act is not...