104 F. 764 | W.D.N.Y. | 1900
The petition herein was filed on the 22d day of December, 1899, and, the alleged bankrupts having answered, the issues were referred to Vernon E. Peckham, Esq., referee, to ascertain and report the facts. The referee has made report of the facts, and the matter now comes before the court upon the petitioners’ motion to confirm the referee’s report, and upon exceptions filed. The first act of bankruptcy alleged in the petition to have been committed herein by the respondents is under section 3a, subd. 3, by which it is provided that acts of bankruptcy by a person shall consist of having “suffered or permitted while insolvent any creditor to obtain a preference through legal proceedings and not having at least five days before a sale or final disposition of any property affected by such preference, vacated or discharged such
It seems to me that the payment of money to apply, on the execution issued was a technical levy. The deputy sheriff having the execution in charge called on each of the alleged bankrupts., and had a conversation with them regarding their property, and was informed by them that Mr. Andrews had in his.possession money belonging to them, which he had collected from debtors of the alleged bankrupts. One payment of $100 was, made to the deputy sheriff by Mr. Andrews, to apply on the execution, and other payments were subsequently made by him. By section 1405 of the New York Code of Civil Procedure it is provided that ‘The personal property of the judgment debtors not exempt, by express provisions of law, .from levy and sale by virtue of an execution are bound by the execution from the túne of the delivery thereof to the proper officer to be executed,” and, where the personal property bound by the execution is money, it need not be sold to apply it on the execution. It may be taken and credited on tbe writ. Section 1410, Code Civ. Proc. N. Y. The amount paid to the sheriff by Mr. Andrews belonged to the defendants in the action, although it was in the possession of another. I think that the application of the money herein by the sheriff on the execution was a final disposition of property. The alleged bankrupts directed its payment and its application on the judgment recovered against them by the petitioner, the Quaker City Fruit Company. This was a preference, within the meaning of section 3a, subd. 3. It gave to the judgment
Had a voluntary petition been filed after the issuing of execution, the court, on application, would have stayed the sheriff, and thus the general creditors would have been benefited. Tin; Quaker City Fruit Company is one of the petitioners-herein, and the balance unpaid on its judgment against the alleged bankrupt is $227.88; tin? amount stated in the petition to be owing to J. H. Gail, creditor, is $321.25, and Snyder & Son, creditors, $30.70, unsecured claims,— making in all the sum of $579.83. By section 59b of the bankruptcy act it is provided that “three or more creditors who have provable claims may file a petition to have a person adjudged bankrupt.” The claim of the Quaker City Fruit Company becomes a provable claim when it surrenders its preference. The prosecution of the action at law commenced by it for the recovery of the debt is not a bar to proceedings against the debtor in banlcruptcy. In re Henderson (D. C.) 9 Fed. 196; Coxe v. Hale, 10 Blatchf. 56, Fed. Cas. No. 3,310. It has been held that a creditor who has given his consent to the act is estopped from thereafter urging it as an act of bankruptcy.
Upon the hearing before the referee, evidence was received, under objection, that the alleged bankrupts, being indebted to one L. Y. Miller, father of respondent Miller, had transferred over to said L. Y. Miller certain property to be applied on such indebtedness, and that such application was made within four months of the time of filing the petition. The contention in regard to the admission in evidence of this transfer is that it tends to introduce a new act of bankruptcy, not specified in the petition; and therefore, there being no amendment to the petition, no act of bankruptcy on this finding of the referee can he made. I think that the amendment to the petition must be deemed to have been made;. The petitioners learned of this act of bankruptcy from the testimony of one of the alleged bankrupts on the trial. In the Lange Case (D. C.) 97 Fed. 197, 2 Nat. Bankr. N. 85, it is laid down that amendments of this character are allowed to be inserted in the petition, if applied for before the trial; and where such an amendment is not applied for before the trial, and it appears that the alleged bankrupts were not surprised, and the evidence was derived from them, the amendment will be deemed to have been made.
In view of the conclusions reached, it is unnecessary to review the other acts of bankruptcy alleged to have been committed, or any of the other findings of the referee. Ho error on the trial appears of