Standard Acc. Ins. Co. v. ET Sheftall & Co.
| Decision Date | 28 October 1931 |
| Docket Number | No. 6375.,6375. |
| Citation | 53 F.2d 40 |
| Parties | STANDARD ACC. INS. CO. v. E. T. SHEFTALL & CO. et al. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Max F. Goldstein, of Atlanta, Ga., for appellant.
J. Kurt Holland and Herbert J. Haas, both of Atlanta, Ga., for appellees.
Before BRYAN, SIBLEY, and WALKER, Circuit Judges.
At the instance of the appellees, and over the resistance of the appellant, the Wallace Construction Company was adjudged an involuntary bankrupt on the sole ground that within four months before the filing of the petition, and while the construction company was insolvent, it had permitted and consented to a receivership in a state court, and the receiver had taken charge of its property. This appeal followed.
The undisputed facts are these: Union Realty Company, a creditor having a judgment obtained May 22, 1930, and over four months old, which was a general lien against all property of the Wallace Construction Company, filed, on September 29, 1930, in a state court, a bill against the construction company, the appellant, Standard Accident Insurance Company, and others, in which, professing to act in behalf of itself and all other creditors of the construction company, and alleging its insolvency, it prayed for the appointment of a receiver to take charge of the assets of the construction company and make disbursement thereof under order of the court, and for general relief. On October 11, 1930, upon consent of all parties, a receiver was appointed to take charge of "all the assets of Wallace Construction Company wherever situated," and the receiver took possession of what property he could. On November 5, 1930, another creditor intervened, having a judgment less than four months old. On November 10, 1930, the petition in involuntary bankruptcy was filed, and defended by Standard Accident Insurance Company as a creditor. Several other creditors having judgments and other liens intervened in the receivership pending the bankruptcy hearing, and on July 27, 1931, an amendment of the receivership bill was allowed, which sought to restrict it to creditors having liens, and proposed to return any excess of assets to the Wallace Construction Company. On July 31, 1931, the order of adjudication was entered.
The restrictive amendment of the bill in the state court after the appointment of the receiver and the filing of the petition in bankruptcy cannot alter the effect of the receivership as an act of bankruptcy. But the appellant contends that from the beginning the bill was not a general insolvency bill, but an effort to marshal property subject to its specific judgment and to other liens, and, its judgment being more than four months old, the lien would be unaffected by the bankruptcy, and the jurisdiction of the state court would not be suspended thereby. Straton v. New, 283 U. S. 318, 51 S. Ct. 465, 75 L. Ed. 1060; Russell v. Edmondson, 50 F.(2d) 175, and Carling v. Seymour Lumber Co., 113 F. 483, from this court, are...
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