271 F. 1 | 2d Cir. | 1921
The Hooven Automatic Typewriter Corporation on May 21, 1920, as a petitioning creditor, filed an involuntary petition, praying that the Automatic Typewriter & Service Company be adjudicated a bankrupt. The alleged bankrupt filed an answer, in which it. set up, among other things, seven affirmative defenses. To this no replication was filed, or ordered to be filed. The issues raised by' the petition and answer were noticed for trial, when' a notice was served that an application would be made to dismiss the petition at a term of the District Court. The petitioning creditor moved at the same time to dismiss the affirmative defenses on the ground that they were insufficient in law. The court below refused to' dismiss the petition, and adjudged six of the seven defenses insufficient. A master was then appointed to take testimony. As a result, this present petition to revise was brought on by the alleged bankrupt. It is contended that the petition for adjudication, filed by the sole petitioning creditor, is insufficient in law upon the face thereof, because it does not plead any facts showing insolvency of the alleged bankrupt, and that such facts as are alleged in the answer show that the Hooven Automatic Typewriter Corporation is not a creditor, and it is claimed that said creditor is estopped from maintaining the petition, because it sued out an attachment against the property of the alleged bankrupt prior to the filing of the petition herein, and that this attachment was in force and effect at the time of filing its petition praying for the adjudication in bankruptcy. The contention is advanced that the facts set forth in the answer established that the Hooven Corporation has received and has not surrendered a preferential payment because of its levying the attachment, and therefore is disqualified and estopped from maintaining this petition.
Error is further, alleged to have been committed because facts are alleged in the answer, which, it is claimed, show that the Hooven Corporation filed a petition in bad faith, for a sinister and ulterior purpose, and is equitably and legally barred from maintaining this petition. The petition pleads that the petitioner is a creditor for $50,000 for automatic typewriters sold and delivered to the alleged bankrupt, and for moneys paid out and expended for the latter’s account from December 1, 1919, to February 28,1920. The acts of bankruptcy are set forth as preferential transfers, and it is alleged that, since the same were made to prefer such creditors over its other creditors in the same class, property was conveyed, transferred, and concealed and removed with the intent to hinder, delay, and defraud its creditors. In the amended answer filed there is a denial of these allegations, and seven separate affirmative defenses are interposed. Jlie court below dismissed six of the seven defenses, and this is now sought to be reviewed on this petition to revise.
We think the petition sufficiently sets' forth that the petitioning creditor has a provable claim in excess of $500 and is not entitled to priority of payment within the meaning of section 64b of the Bankruptcy Act and the amendments thereof (Comp. St. § 9648), and, further, that
In re Connecticut Brass & Mfg. Co. (D. C.) 257 Fed. 445, is referred to us as an authority supporting the contention of the petitioner that the petition here is insufficient in its allegations; but that case refers to the allegation of insolvency in a bill in equity for the appointment of receivers and not to a petition in bankruptcy. The form used by the draftsman of the petition here in question is that which has been used under the rule promulgated by the Supreme Court of the United States as General Orders in Bankruptcy, and is known as General Order 38 (89 Fed. xiv, 32 C. C. A. xxxvii). “It is the form which shall be observed and used with such alterations as may be necessary to suit the circumstances of any particular case.” The plea of insolvency, as alleged by the petitioning creditor here, is in conformity with the form there adopted.
“Such a preferred creditor may present or may join in a petition for an adjudication of bankruptcy. But he may not be counted for the petition unless he surrenders his preference before the adjudication.”
If an adjudication be had here, the effect would be a dissolution of the attachment obtained, and therefore there would be no preference to
We find nothing in the Bankruptcy Act itself which forbids a creditor filing a petition under similar circumstances. While the attachment obtained by the respondent' remains unvacated of record, this respondent could not secure any advantage by that fact. When the order is entered vacating the attachment, it will be effective as of the date of decision of the court below vacating the same. This was a date before the bankruptcy. Furthermore, the preferred creditor who files a claim may surrender his preference at any time before the claim is allowed. This he need not do before the filing of the claim. We think the court below committed no error in refusing to dismiss the petition m bankruptcy because of this.
The further defense, struck out as pleaded, was that, within four months of the filing of the involuntary petition, the revising petitioner paid to the respondent the sum of $15,000, which sum the respondent received and has not surrendered. This is not a plea that a preference
Both orders are affirmed.