149 F. 273 | D. Vt. | 1906
The trustee, by petition, alleges in substance: That Lynn J. Sanderson was duly adjudged a bankrupt May 20, 1904, upon his creditors’ petition. That thereafter the petitioner was elected trustee. That the petitionee is the father of the bankrupt and is the owner of a farm, consisting of 235 acres of land, situated on the “Gore Road,” so called, in Franklin county. That the bankrupt carried on said farm for many years just preceding his bankruptcy, and increased its value, improved the buildings, and increased the amount of stock on said farm. That he had paid the taxes and inter
“Maplewood Creamery.
“Highgate Center, Vt., Aug. 25, 1903.
“I regret to say to you that on account of financial losses that I am com- ■ pelled to suspend payment of my creditors for the time being. I have struggled against adverse circumstances for a long time, and paid a hundred cents on a dollar that I owed until I have become deeply involved, and am unable to meet my obligations as they become due. No one will regret the situation more than myself, for I am anxious to pay every honest dollar that I owe, and hope to do so if my creditors will give me an extension and forbear with me. I find myself In debt from $7,000 to $10,000, but I hope to be able in the future to pay all I owe, if I have my health and strength. If I can avoid the disgrace of bankruptcy and secure the confidence of my creditors, so that they will forbear payment with me, I feel confident that I shall be able to pay all in the future. I am advised that, in view of the circumstances, I cannot safely make payment to any of my creditors until it is ascertained what attitude they take in the premises. Shall be pleased to advise with you, of any of my creditors, in regard to the best method to pursue, and will be glad for your co-operation and advice in the premises.
“Very respectfully yours, L. J. Sanderson.”
That the bankrupt testified before the referee in bankruptcy, and on this testimony, which is set out in the petition at some length, it is charged that the bankrupt and the petitionee were partners in said creamery business. That at the time of making said preferred payments the petitionee knew that his son, the bankrupt, was insolvent, and therein prays the court to appoint a receiver to take possession of said farm. That the bankrupt’s interest in said farm be carved out for the benefit of the bankrupt’s estate. That the petitionee account at length to the trustee of the bankrupt. That the petitionee be ordered to pay such sum or sums and to surrender any and all property that
In the opinion of the court, the facts set forth by the master are not sufficient to justify the court in ordering a receiver to take possession-, of said farm, or decree to the trustee in bankruptcy an ownership in any part or fractional part of the petitionee’s real estate. It well enough appears that the bankrupt and the petitionee procured loans at the Eastern Townships Bank at Bedford, province of Quebec, Canada.; that they procured one J. M. llill, Jr., and other parties, to sign some of said notes as sureties, and the petitionee gave to those surety signers collateral security in some instances; that within four months of filing said petition in bankruptcy several of said notes were paid, and payments made upon other notes at said bank. It is claimed by the
Section 60 of the national bankruptcy act, subdivision B (Act July 1,1898, c. 541, 30 Stat. 562 [U. S. Comp. St. 1901, p. 3445]), provides:
“If a bankrupt shall have given a preference and the person receiving it, or to be benefited thereby, or his agent acting thereunder, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property, or its value, from such person.”
It is the opinion of the cotirt that the words “such person” refer either to the person receiving such preference or the person who is "benefited thereby. If the party receiving such preference is without the jurisdiction of this court, and the person benefited thereby is within the jurisdiction of the court, the trustee may proceed against the latter. It appears that the bankrupt collected money from the sale of the products of the creamery, and, instead of paying it to the patrons, to whom it belonged, he, through the advice of the petitionee, used it in paying obligations that he was owing to parties in Canada; that his father, the petitionee, who then knew that his son was insolvent, might be relieved from liability as a surety or indorser. Also, it is claimed that he paid the petitionee several hundred dollars on account.
It was claimed in argument, by counsel for the petitionee, that in a case where such* payments are made to a foreign creditor there is no precedent for the recovery, as herein prayed for. See Landry v. Andrews, 6 Am. Bankr. Rep. 281, 48 Atl. 1036. Whether there is a federal court precedent or not, justice demands it, wherefore there should be a decree for the petitioner to recover of the petitionee all sums of money that were paid by the bankrupt, or paid by the petitionee out of the funds of the bankrupt, or out of funds received from the sale •of the products of the creamery, within four months of filing said petition in bankruptcy, to the petitionee or upon the notes and. obligations of the bankrupt whereby the petitionee was benefited by such payments, as above indicated.
The cause is recommitted to the master to more definitely report the •amount of such payments and the interest thereon, that a decree may he made accordingly.