Brown Commercial Car Co. v. Continental Motor Mfg. Co.

227 F. 387 | 7th Cir. | 1915

KOHLSAAT, Circuit Judge

(after stating the facts as above). [1, 2] While there may have been some haste in closing down upon the new-born project of appellant, and a decided bearish attack upon the value of the real estate then recently purchased for the sum of $50,-000, we are unable to discover from the record that there was any error calculated to discredit the finding of the master. While the plant was not yet moribund, the evidence gives strong color to appellees’ contention that it was headed in that direction. Some one of appellant’s officers made a statement to its creditors of its condition and 'asked for a settlement at 35 cents. While the authority of this party does not seem clear, it is a circumstance to he considered. There is no evidence of a brightening future. The evidence in such cases is generally so conflicting as to make a review of little value. The present case was no exception. The master had all the facts and the proclaimed of them before him, and, under the circumstances, we are not disposed to overthrow his findings. We therefore concur in the adjudication of the master and the District Court as to the insolvency of appellant at the time of and for four months previous to the filing of the original petition.

The adjudication was recommended by the master, based upon the third amended petition, filed April 28, 1913. This sets out several alleged preferential acts growing out^of the transactions with the First National Bank of Peru, and the alleged preferential payments, among others, to R. A. Edwards, B. G. Kramer, Garage Equipment Company, Mather Spring Company, Highland Body Company, and Hays Manufacturing. Company, which are the only items which the master finds constituted preferences. These transactions took place more than four months prior to the filing of the third amended petition. For this reason, mainly, appellant urges that the appellees have failed to allege preferential payments within the four-months period immediately preceding the filing of the petition which alleges them. If these acts occurred more than four months prior to> the filing of the amended petition which asserts them, and were charged for the first time on April 28, 1914, and are new and.independent preferential acts charged by way of substitution for the items alleged in the original petition, and.not mere enlargements and amendments to the alleged acts of bankruptcy set out in petitions filed within the proper four-months period, then and in that case the transactions have not-arisen within the four-months period immediately preceding the filing of the petition. Remington on Bankruptcy, §§ 264, 265; Reed v. Crowley, 1 N. B. R. 516 (Fed. Cas. No. 11,644); In re Leonard, 4 N. B. R. 562 (Fed. Cas. No. 8,255); In re Haff, 136 Fed. 78, 68 C. C. A. 646; Walker v. Woodside, 164 Fed. 680, 90 C. C. A. 644; In re Pure Milk Co. (D. C.) 154 Fed. 682.

[3, 4] covering the names of payees and the dates and amounts of payments alleged to have been preferences, as set out in the third amended petition, were not mentioned by name in any of the preceding petitions, yet some of them were in fact included m the first allegations of an act of bankruptcy in the original petition concerning advances to the First National Bank of Peru; that is to> say, the payments to the Garage Equipment Company, the Mather Spring Company, and the Highland Body Company were paid to or through the said bank, but were in fact payments to or for said several parties. We regard said three statements of the third amended petition as mere explanations of the first act of bankruptcy charged, and not as substituted items, since the record shows such to be the facts. Appellee further claims that each of the alleged preferential payments specified by name, date, and amount in the third amended petition are specifications of the $10 item set out in the second amended petition filed March 17, 1914; but this amended petition was filed after the lapse of more than four months from the date of the transactions herein attempted to- be made bases for evidence of preferences. Since the waiver of the second and third alleged acts of bankruptcy, and under the rule above stated, all acts alleged for the first time in the second and third amended petitions, if not elaborations of or pertaining to the first alleged act of bankruptcy, viz., preferential pa}unents to the First National Bank of Peru, are not properly pleaded. We are unable to trace any connection between the allegations of the second amended petition as to a preferential payment of $10 to unknown creditors and any previously alleged act of bankruptcy. So far as we can judge from the evidence, that item refers to a new and independent act of bankruptcy. The alleged preferential payment of $134.73 to Edwards was merely the return of money advanced to meet the pay roll, made within one day of the time of its advance. Moreover, when interrogated thereto, counsel for appellees indicated that he would not rely on this item. (Record, p. 77.) We do not consider it available for the purposes of this suit.

The allegation of the second amended petition that appellant committed an act of bankruptcy, in that it paid the sum of $300 to B. G. Kramer on September 20, 1913, was first made on March 17, 1913, or almost six mouths after that payment was made, although it was a payment in fact to one Andrews, the person who was petitioners’ attorney, and as such made oath to the original and the first and second amended petitions, and therefore cannot urge-want of notice of such payment. This payment was an independent item, and cannot be held to have been included in any previous charge of a preferential payment. It could not, therefore, have been available for purposes of adjudication.

Without taking up the other items of the third amended petition, which seem to be only a few out of many payments in the regular course of business, we are of the opinion that the three items above mentioned — those of the Garage Equipment Company, the Mather Spring Company, and the Highland Body Company — may, under the rule laid down in In re Shoesmith, 135 Fed. 684, 68 C. C. A. 322, properly be regarded as specifications under the said first alleged act of bankruptcy, and, as such, treated as amendments thereto and not as substitutes therefor. These payments, it appears, were made when appellant was insolvent and unable to pay its debts, and were by the master and District Court, and are by us, deemed to constitute acts of bankruptcy.

The decree of the District Court is therefore affirmed.

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