*1 tаxpayer remand basis the cost ascertain board to case to the purposes deduction. taxpayer for LEISK FUEL OIL CO. v.
ARKANSAS et al.
No. 10457. Appeals, Fifth Circuit. Court of
Circuit
Jan.
Rehearing Jan. Denied Roberts, Walker, Robert and H. C. Jr. Shreveport, La.,
Jr., Hussey Chandler, B. Robt. G. John La., Shreveport, appellees. both of HUTCHESON, HOLMES, and Before McCORD, Judges. *2 HOLMES, Judge. liability the thus created conversion that an offset is claimed under Section bankruptcy by proceeding This is a in sub. Bankruptcy a of the Act.1 the Purchas- оf Caddo Crude Oil trustees ing Corporation & Refin- and Rhodessa Oil place The conversion of the oil took Corporation, ing bankrupts, recover of to after in knowledge had the of Company Arkansas the market Fuel Oil solvency bankrupts, of the and four within belonging value the of to petitiоns months preceding filing the of the wrongfully alleged con- and to have been adjudications bankruptcy. and If the in by granted verted referee The by title to the the oil had been transferred act trustees, by the sought the relief the and bankrupts, the con affirmative of the of the district referee аffirmed the order court veyance preference would void have been a a minor modification. No one by able the circum trustee.2 In these objected proceed- propriety has of appellant may stances not secure an advan summarily ing by plenary than suit. rather tage general over other creditors of the wrongfully The that it admits bankrupts by its own unlawful act. 8,000 belonging to converted barrels of oil The law сase the bankrupt corporations, it is the indebted to them for the fair thereof, legal relationship between the carrier and market value bankrupts. Appellant rightful the was in open an but claims an offset possession property carrier, of the as a but by bankrupts to it for account the due only bailee the it held the oil as and for a rendered, in the sum services purpose delivering limited of it to Rhodes- $5,244.99, $1,343 gas- of oline thе of and oil; only qualified sa. It had a title to the by appellant to Rhodessa. sold apparent authority it had no real do or to alternаtive, appellant the had contends that it safely anything with it to deliver it against enforceable a according carriage. to the contract of 8,000 the of the extent of the barrels tooil pledge, There no transfer was on con- $5,244.99 transporta- due accrued it for signment, no under a debtor- charges. tion relationship. creditor petitions bankruptcy in were filed on that, par- It immaterial due lack to of July years or about 1940. For several by ticipation bankrupts, in the transfer prior thereto Caddo cor- Rhodessa the conversion of the oil was not a void- wholly porations, owned subsidiaries of preference. able In the case of Western Corporation, Hurricane Petroleum been ment, hаd Brown, Tie & Timber Co. v. operating manage- under the same 571, corpora- a S.Ct. L.Ed. produc- purchasing Caddo crude at given tion funds directions to conducting centers and Rhodessa tion refining the pay payee same to another. The of the process. corporation Neither corporation, funds was a debtor of the facilities for of crude by was known it to verge be on the of Rhodessa, a Caddo so contraсt of to bankruptcy. prior Within four months to appellant whereby carriage was made with filing bankruptcy, in deliver storage would the crude into Caddо applied corporation the funds to the in- by appellant carriage tanks owned by bankrupt. debtedness owed Follow- delivery by the lattеr to Rhodessa at an ing adjudication in per price Having barrel. agreed learned corporation attempted to set off the sum corporations in fi- were serious that nancial misapplied by against the debt so of the straits, appellant, July bankrupt, and to file its claim for thе re- refineries, 1940, transported own and mainder. The court held that it was not consumed, knowledge there without setoff, but that it was obli- bankrupt corpоrations, 8,000 of the consent gated to the trustees in the full amount of belonging corpora- barrels of to said the debt. converted, of the The vаlue oil so tions.
$6,800,
slightly in
parallel
excess of the
sums
between that case and
owed
Rhodessa to
striking.
then
accrued
case at bar is
In eаch there
charges
misappropriation
and for was
property
with
purchased,
gasoline
and it is with
right;
to out semblance of
in each
un-
1 11 U.S.C.A.
sub.
а.
U.S.
S.Ct.
Chicago Title, etc.,
Pirie
Campion, D.C.,
In re
U.
256 F.
Wilkinson,
S.
Walker v.
296 F.
Brown,
Tie & Timber
Western
Co.
U.S.C.A. §
b.
sub.
appropriation
four
thereto. For
lawful
was within
these reasons the
appealed
prior
and with no-
bankruptcy
months
from will be modified
increas-
bankrupt;
ing
insolvency
the amount
tice of the
of the
thereоf
full value
8,000
oil; and,
right
a claim
to off-
each there was
barrels of
as modi-
*3
fied,
misappro-
property so
it will be
set the value of
affirmed.
priated against
the indebtedness of
the Modified and affirmed.
bankrupt
it.
think
cited
to We
the decision
question presented
is decisive of the
here
On Petition
Rehearing.
for
compels
the conclusion that
opinion
Pursuant
filed
herein
was not entitled to the offset claimed.3
January 4, 1943, this court modified the
Appellant’s alternative contention judgment appealed
from
increasing the
upon Articles 3217
is based
and 3265 of
amount
Upon
thereof in
of $400.
Code,
Louisiana Civil
which create
stat
petition
rehearing
we are reminded that
utory
upon
thing
lien
carried
appellee
сross-appeal,
did
file
not
transportation charges.
extent
which
judgment
reason the amount of the
difficulty
position,
as
ad
should not have bеen increased.
mits,
posses
that the
lien is a
In appeals
this
lien,
sory
its continuance
appellate jurisdiction
review,
court has
thing
the carrier’s
revise,
affirm,
judgment ap
reverse the
carried.4 Under the facts of this case the
pealed from,
as to
matters of law and
possession any
carrier did
have in
not
its
fact,5
jurisdiction
but the
thus conferred
transported
that
had been
it and
may
must
invoked before it
be
be exercised.6
which
charges had accrued.
cross-appeal, appel
the absence of a
Upon review of'the decision
ref-
may
attеmpt
enlarge
lee
not
either
his
eree the court below held that
rights
judgment appealed
offset,
not
to an
adversary.7
rights
or to
his
lessen
except
respect
8,-
with
Therefore,
judgment
the modification of the
“theoretically
000 barrels
carried.” This
appealed from
erronеous.
error
This
by appellant,
was never carried
will
corrected
affirmed
be
unauthorized
in-
without modification.
conversion,
effectuating
cident to
and it
respects
was not entitled
In all
for re-
to assess
other
charges against
hearing is overruled.
3
Libby
Columbia,
Hopkins,
also
Cir.,
See
104 U.S.
Fedеral Land Bank of
769;
Ryan,
26 L.Ed.
Alvord v.