291 F. 775 | E.D.N.Y | 1923
There is before the court the report of a special commissioner recommending that the petition of Max Shaffer, trading as Max Shaffer Company, for an order directing the trustee to pay over to him $2,773.70, the proceeds of merchandise sold by the receiver under a stipulation between the parties, be denied. The-petitioner contends that the goods were obtained from him by the bankrupt through fraud; that when they were bought the bankrupt was insolvent, failed to disclose its insolvency, and had no intention of making payment.
On December 28, 192R a salesman of petitioner called upon, the bankrupt, without solicitation, and obtained an order for goods amounting to $4,168.24. The general manager of the bankrupt gave the order, requesting that shipment be rushed. The goods were to be shipped from West Virginia, and the bankrupt entitled to free delivery. When notice of arrival was received, the bankrupt itself sent for the goods and obtained them from the railroad station upon paying freight charges of $103.58. The petitioner claims that this action resulted in depriving him of his right to stop the goods in transit. Under such a claim petitioner 'must prove: First, insolvency of bankrupt when purchase was made; second, concealment of insolvency from claimant; third, intention on the part of bankrupt at the time of sale not to pay for the goods. In re K. Marks & Co., 33 Am. Bankr. Rep. 275, 218 Fed. 453, 134 C. C. A. 253. The commissioner has found as a fact that insolvency was not established, because it was found impossible to prove the amount of merchandise on hand belonging to the bankrupt, on December 28, 1921, and points out that numerous other reclamation proceedings have been unsuccessful for the same reason. In the absence of proof of this necessary element, neither concealment of insolvency nor intention not to pay has been established.
The motion to confirm the report of the special commissioner is granted.