136 F. 912 | E.D. Pa. | 1905
On March 31, 1905, an involuntary petition in bankruptcy was filed in this court against William H. Latimer, Frank C. Marrin, and Stanley Francis individually and trading as the Provident Investment Bureau. On the same day a petition was presented for the appointment of a receiver, in which it is alleged that the “bankrupts have been engaged in procuring money through the mails by fraudulent representations,” the method being therein set out. It is further stated that William H. Latimer and Frank C. Marrin are fugitives from justice, and their whereabouts are unknown to the petitioner, and that Stanley Francis, known under his various aliases, which are given in the petition, is now in custody charged with the violation of the laws of the United States relating to the fraudulent and improper use of the mails for the purpose of procuring money. The other necessary averments are set forth in the petition, showing that a receiver is absolutely necessary for the preservation of the estate and to take charge of the property of the bankrupts until a trustee is qualified or the petition is dismissed according to law. A receiver was appointed without first giving notice to any of the bankrupts, and on April 4, 1905, a petition was presented by Stanley Francis asking the court to revoke the appointment of the receiver made on the above-mentioned date for the reason that he was not served with notice and allowed to be heard prior to the appointment having been made. He was, however, served with notice the day after the appointment had been made.
This raises the question whether, under these circumstances, a receiver in bankruptcy can be appointed to take charge of the alleged bankrupt’s property without first giving him notice and al
The allegation here is that the indebtedness for which the alleged bankrupts are liable was created through a fraud perpetrated upon the claimants in obtaining their property, for which reason two of them have fled the jurisdiction of this court, and Stanley Francis, the third, is under arrest and in prison. A notice, under these circumstances, to Francis, that a receiver was about to be appointed, in all probability would have defeated the very object .of the appointment, to wit, to prevent a disappearance of the property belonging to the alleged bankrupts, and in the appointment of the receiver he was only authorized to hold the property pending the determination of the questions involved. It is not depriving the alleged bankrupts of their property without due process of law. It is merely a preliminary step in a proceeding whereby property is taken into custody and safely preserved until the rights of the contending parties can be determined. We find in all systems of procedure similar means of enforcing rights of parties and preserving property — such as the issuance of the writ of replevin, whereby the possession of property is taken by the claimant from an adverse party without notice; and in admiralty libels are filed and vessels attached; and in foreign attachments personal property is seized without notice — and in all these proceedings the object is to -hold the property safely until the issues involved can be determined. They are all instituted without notice.
The petition and answer in this case upon the rule to show why the appointment of the receiver should not be revoked further strengthens the position of the creditors against the alleged bank- , rapts in their right to have a receiver appointed in this case with
The motion, therefore, to revoke the appointment of the receiver as to Stanley Francis in this case, is overruled.