126 Wash. 294 | Wash. | 1923
— The plaintiff, Cunningham, as trustee in bankruptcy in the matter of the estate of Charles Bury, a bankrupt, commenced this action in the superior court for Benton county, seeking, in the interest of creditors of Bury, the setting aside of conveyances
The controlling facts, as we view them, may be summarized as follows: On April 8, 1920, there matured an indebtedness owing by Eury to Mary Bowen, evidenced by a promissory note which he had theretofore executed. A day or so prior to that date, attorneys for Miss Bowen advised Eury by letter addressed to and received by "W. B. Mitchell, his then attorney, this defendant and appellant, that payment of the indebtedness so evidenced would be insisted upon at maturity, and, if not then promptly paid, suit would be brought against him looking to the enforcement of such payment. The indebtedness not being paid at maturity, on April 10, 1920, Miss Bowen commenced an action upon the note in the superior court for Spokane county against Eury, seeking a judgment against him for the amount due thereon, with attorney’s fees as provided therein, and for her costs and disbursements. On the same day, Eury executed and delivered to appellant, who, as we have seen, was then his attorney, the deeds conveying several parcels of real property situated in Benton county, which are here in question. The property so conveyed was then of the value of more than $6,000. At that time, the total indebtedness owing by Eury to appellant did not exceed $250, which was for legal services and which, if justly measured, was probably less than that amount.
On October 28, 1920, judgment was rendered by the superior court for Spokane county in favor of Miss Bowen and against Eury in the action above mentioned, awarding her recovery in the sum of approximately $1,350, including principal, interest, attorney’s fees and costs. This judgment became final in the superior court on December 2, 1920, by the overruling of Eury’s motion for a new trial. We note that appellant was attorney for Eury as defendant in that action.
On December 9,1920, Eury filed in the Federal court for the eastern district of this state his voluntary petition in bankruptcy, and on the same day he was adjudged a bankrupt. He scheduled assets of very small apparent value, which assets proved to be of no value. He also scheduled, as one of his potential ultimate debts, the judgment rendered in favor of Miss Bowen and against him in the action above mentioned. We note that appellant was attorney for Eury in the filing of his petition in bankruptcy and in procuring the adjudication therein.
On December 22, 1920, Miss Bowen filed her claim in the bankruptcy proceedings for the indebtedness owing her upon the judgment above mentioned. Eury, by his attorney, this appellant, objected to the allowance of that claim on the sole ground that the judgment had been appealed from by Eury to this court, wherein a reversal was being sought. For this reason alone, the referee in bankruptcy delayed the formal approval of Miss Bowen’s claim, though the judgment of the superior court had in no manner been superseded pending the appeal; and it was, therefore, at that time,
It is contended, in behalf of appellant, that the record of this cause shows that respondent, as trustee in bankruptcy, is not authorized to maintain this action, because the conveyances he is seeking to set aside were made and recorded more than four months prior to the filing of Rury’s petition in bankruptcy, and there is no allowed or allowable claim against the bankrupt estate other than this claim of Miss Bowen. The time of the making and recording of the conveyances, it is true, as this record shows, was more than four months prior to the filing of Rury’s petition in bankruptcy; and, for the sake of argument, we shall assume that this claim of Miss Bowen is the only allowed or allowable claim against the bankrupt estate. The argument seems to be that, because of these conditions, respondent, as trustee representing no creditor other than Miss Bowen who could have been defrauded by the conveyances in question, is not authorized to wage this
The decision of the Federal circuit court of appeals for the sixth circuit in Stokes v. Sedberry, 275 Fed. 894, is relied upon in support of this contention. That decision does seem to hold that there is some limitation upon the extent to which the expenses of general administration of the bankrupt estate may be' charged against property or funds acquired by the trustee in bankruptcy for the benefit of some particular creditor or class of creditors, when such recovery of property by him consists of the setting aside of conveyances made by the bankrupt more than four months prior to the commencement of the bankruptcy proceedings. That is, while all creditors may look to all the property coming into the hands of the trustee at the time of the commencement of the bankruptcy proceedings, and also to all property coming into his hands by virtue of the avoiding of conveyances made by the bankrupt within the preceding four months, it is claimed, and we concede for argument’s sake, that property conveyed by the bankrupt prior to the four months’ period in fraud of creditors can only be subjected to the payment of the creditors so defrauded.
• This, it seems plain to us, does not successfully argue that the trustee is not the proper party to prosecute actions to set aside conveyances made in fraud of creditors prior to the four months’ period. As to what creditor or class of creditors the trustee is acting in the interest of in maintaining such actions has, it seems to us, to do only with the problem of the marshaling
“It is contended by counsel for appellants that plaintiff in his representative capacity as trustee in bankruptcy of the estate of defendant N. H. Burgor represented two classes of creditors, (a) a class entitled to set aside the deed as fraudulent upon sufficient testimony, because they were creditors at the time of the execution of the deed; and (b) a class not entitled to set the deed aside, because they had become creditors after the alleged fraudulent transfer. And it is argued that the plaintiff representing creditors can only have relief for the first class, and the trial court could not undertake to determine that some could participate in the fruits of the litigation and others not. We are unable to agree with counsel for appellants in this contention. It is sufficient to authorize the trustee to maintain the action that the transfer was fraudulent as against creditors existing at the time it was made, and whether or not subsequent creditors can participate in the assets recovered by the trustee is entirely immaterial so far as the trustee’s right to maintain the action is concerned. Valley L. Co. v. Hogan, 85 Wis. 366, 55 N. W. 415; Jackman v. Eau Claire Nat. Bank, 125 Wis. 465, 104 N. W. 98. The judgment in this case does not determine or adjudicate how the fruits of the litigation shall be distributed among creditors. That is a question for the Federal court in which the bankruptcy proceedings are pending. In re*301 Cannon (D. C.), 121 Fed. 582. The complaint in this case clearly shows a cause of action to set aside the deed in question upon the ground that the conveyance was, at least,, fraudulent as to some creditors, and that is sufficient to constitute a good complaint by the trustee in bankruptcy to set aside a conveyance fraudulent as to creditors.”
It seems to us that the only substantial difference between the rights and the powers of the trustee in the waging of actions looking to the setting aside of conveyances made by the bankrupt during and prior to the four months’ period is that, in actions so waged by him looking to the setting aside of conveyances by the bankrupt during the four months’ period, his substantive rights are controlled by section 67 (e) of the bankruptcy act; while in the waging of actions looking to the setting aside of conveyances made by the bankrupt before the four months’ period, his substantive rights are governed by the state law, though the question of his being the proper party to wage the latter is rendered plain by section 70 (e) of the bankruptcy act. Stokes v. Sedberry, 275 Fed. 894; Engstrom v. Lowell, 281 Fed. 973.
It seems quite clear to us that the trustee was fully qualified as the proper party to maintain this action. Indeed, we are unable to see by what right Miss Bowen, or any other creditor of Bury, could have commenced or maintained this action after the adjudication of the bankruptcy of Bury which, it seems to us, in legal effect made respondent, as trustee in bankruptcy, the exclusive representative of every creditor, taking away from each and all of them the right to maintain such an action.
Some contention is made in behalf of appellant that this action was.prematurely commenced, in that it was commenced before there was an actual formal allow
Some contention is made in behalf of appellant that respondent’s complaint, as trustee in bankruptcy, did not state a cause of action, principally because it did not allege the insolvency of Bury at the time of the making of the conveyances in question. Viewed critically, it may be that a demurrer to the complaint on that ground might possibly have been properly sustained. There was no demurrer, however, interposed by appellant in so far as we can see from the record before us, but he answered upon the merits, and, among other
We note that the setting aside of all of the conveyances may bring into the bankrupt estate property more than sufficient in value to satisfy the claim of Miss Bowen, which, as we are advised by this record, seems to be the only claim to which the proceeds of such property are applicable in payment. It is enough for us to say, in answer to any claim that the court should not have set aside all of the conveyances, that' the record fails to affirmatively show that it was practical, having in view the full protection of the rights of Miss Bowen, for the trial court to have limited its decree in that respect. What shall be done with the surplus, if any there be, we leave to the Federal court having in charge the administration of the bankrupt estate.
Some other contentions are made in behalf of appellant, but we think they are so wholly without merit as; to not call for discussion.
Under § 1939 of the Revised Code of Delaware for 1915, it is provided that it shall be lawful for the incorporators of any corporation, before the payment of any part of its capital, to file with the secretary of state an amended certificate, duly signed by the incorporators named in the original certificate of incorporation. Under Rem. Comp. Stat., § 3853 [P. C. § 4658], a foreign corporation desiring to transact business in this state is required to cause to be filed and recorded in the office of the secretary of state,
“ . . . a certified copy of its charter, articles of incorporation, memorandum of association, or certificate of incorporation, certified to by an officer who is the custodian of the same according to the laws of the state or territory, country or colony, where such corporation is incorporated, or who is authorized to issue certificates of incorporation according to the laws of such state, territory or foreign country or colony. The instruments herein required to be filed and recorded shall be attested by such certifying officer under his hand and seal of office, which attestation shall be prima facie proof of the facts therein stated, and of the genuineness of the certificate. ’ ’
The relator, having complied with the law in tendering the amended articles, which, as already stated, show every fact which would be disclosed by the original articles, had a right, under the statute, to have the same filed, and the respondent was in error in declining to accept them.
° The writ will issue.
Tolman, Pemberton, and Parker, JJ., concur.