129 F. 646 | E.D. Pa. | 1904
This petition was filed November 4, 1903, and sets forth as the acts of bankruptcy that Charles F. Belknap did, “on the 21st day of October, 1903, suffer and permit a levy to be made at the instance of the Fidelity Trust Company, one of his creditors, upon certain of his goods and chattels at 333 Chestnut street, which said goods will be exposed for sale under said levy at said premises on November 4, 1903, thereby suffering and permitting, while insolvent, a creditor to obtain a preference through legal proceedings, and not having, at least five days before the sale or final disposition of any property affected by such preference, vacated or discharged same; (2) that said Belknap has within four months last past conveyed, transferred, concealed, and removed part of his property with intent to hinder, delay, and defraud his creditors, in that he has removed from his premises almost all of his effects, and concealed or disposed of the same for the purpose of hindering, delaying, and defrauding his credit-tors, and with said intent.” The testimony shows that the first act of bankruptcy thus set forth was not a levy under execution, but was a distraint of goods under a landlord’s warrant, and the question is presented whether such a levy is a “legal proceeding” within the meaning of section 3a (3), Act July 1, 1898, c. 541, 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422]. I do not think it necessary to decide the question, however, because it is clear to my mind that no preference was obtained by the distress. A preference is described by Act July 1, 1898, c. 541, § 60, cl. “a,” 30 Stat. 562 [U. S. Comp. St. 1901, p. 3446], as amended in Act Feb. 5, 1903, c. 487, § 13, 32 Stat. 799 [U. S. Comp. St. Supp. 1903, p. 416], in the following language:
“A person shall be deemed to have given a preference, if, being insolvent, he has within four months before the filing of the petition, or after the filing of the petition and before adjudication, procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable anyone of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.”
The second act of bankruptcy is under section 3a (1) 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422], and the facts with reference to this charge are found by the referee as follows:
“Counsel for one of the petitioning creditors went to Belknap, and threatened him with criminal proceedings unless the debt due his client was immediately paid. Belknap then sold certain property to raise money for this purpose, but the creditor afterwards refused to receive the money, and instituted criminal proceedings. Belknap denies having sacrificed goods for that purpose, saying that he obtained for them not much less than their full value, but admitted that at the time his stock of goods was worth less than $25,000, the amount of his indebtedness.”
As it seems to me, this transaction cannot be regarded as being the act of bankruptcy described in section 3a (1). The intent to defraud is essential under this clause, and differs from the intent to prefer, which is essential to the act of bankruptcy described in section 3a (2). The proper distinction should be preserved between these two clauses. The subject has been so satisfactorily discussed by Judge Archbald, of the Middle District of Pennsylvania, in Githens v. Shiffler, 7 Am. Bankr. Rep. 453, 112 Fed. 505, that I content myself with referring to his opin-. ion as a clear vindication of the conclusion that the facts here do not make out an intent to defraud. See, also, Re Mingo Valley Creamery Ass'n, 4 Am. Bankr. Rep. 67, 100 Fed. 282. It is urged that Re Morgan, 4 Am. Bankr. Rep. 402, 101 Fed. 982, is an authority in support of the opposite view, and it is true that some language in the opinion will bear that construction. But an exámination of the case discloses a completed preference in favor of two creditors, and it is certainly reasonable to suppose that the court was speaking with reference to the actual facts. But, even if I should be mistaken in this, Githens v. Shiffler is of more weight in this circuit.
It also appeared that another creditor, named Wright, whose debt was about $6,000, came to Belknap’s place of business upon one occasion, and in Belknap’s absence took about $1,200 of goods, and carried them away to his own store, and retained possession of them in spite of Belknap’s protest. Belknap took no legal proceedings against
The exceptions to his report are overruled, and, in accordance with' his recommendation, the petition is dismissed, at the costs of the petitioning creditors.