127 F. 728 | E.D. Pa. | 1904
The act of bankruptcy charged in the creditors’ petition is the transfer, by bill of sale and actual delivery, of the stock and book accounts of a fur store to Andrew Gerenday, the son-in-law of one of the bankrupts, with intent to hinder,
“That on the 15th day of January, 1904, when the involuntary petition in bankruptcy was filed against the above-named firm of Tesehmaeher & Mrazay, and for a long time prior thereto, I, the said Andrew Gerenday, was in the sole, uncontrolled, and exclusive possession and ownership of all the goods and merchandise in the premises No. 1217 Walnut street and No. 117 South Eleventh street, in the city of Philadelphia, state of Pennsylvania.
“That I, the said Andrew Gerenday, became the owner of said merchandise in good faith and for valuable consideration.
“That my ownership, possession, and control of said goods and merchandise is adverse against the whole world, and for the sole and exclusive benefit and enjoyment of myself, and not as agent, or for the benefit, interest, or enjoyment, of any other person or persons whomsoever, and that no person other than myself is in any wise interested, directly or indirectly, therein; that I, the said Andrew Gerenday, am not a party to the bankruptcy proceedings, do not desire to become a party thereto, and do most respectfully aver that I cannot he lawfully made a party thereto.
“I deny the jurisdiction of your honorable court in the making of the decree or restraining order served on me, or in permitting the same to further continue, or in any wise to have my title to said goods and merchandise attacked or inquired into in said bankruptcy proceedings, or in any manner other than a direct proceeding wherein the person or persons who proceed to attack my title thereto shall be put under proper and sufficient bond to respond in damages, so that my rights may be protected and adjudged according to the due processes of law, which are my constitutional rights.”
Laying aside for the moment the effect of Gerenday’s consent to the reference, I may say at once that I have examined the testimony taken before' the special -referee, and am of' opinion that it sufficiently dis
It follows, therefore, that as the testimony taken by the referee discloses that Gerenday is making a real, and not merely a colorable,' claim to the ownership of the property in dispute, he is entitled to have his contention examined and judged according to the ordinary and regular process of the law, unless his consent to the summary proceeding before the special referee has bound him irrevocably to go on with it to the end. It is well settled that mere consent cannot give jurisdiction.' Unless,.therefore, the bankrupt act has conferred upon the district court the power to decide summarily between such adverse claims to property as'are here presented, or has given the court such
“Suits by the trustee shall only be brought or prosecuted in courts where the bankrupt whose estate is being administered by such trustee, might have brought or prosecuted them, if proceedings in bankruptcy had not been instituted, unless by consent of the proposed defendant, except suits for the recovery of property under section 60 sub-division (b) and section 67 sub-division (e).”
Assuming for present purposes that, before a trustee has been appointed, a receiver or an interested creditor may bring the “suits” referred to by this clause, in order to protect the estate, I think it is clear that the language just quoted refers to plenary actions, whatever their form may be, and not to summary proceedings. The presumption is against a construction that would take away the ordinary rights of a litigant, would deprive him of trial by jury unless the court should grant it as a matter of grace, and might land him in prison for nothing more criminal than his conduct in accepting a preference.
In accordance with these views, the restraining order is dissolved, and the special referee is discharged from further consideration of this matter. But, in order that the controversy about Gerenday’s title may be promptly disposed of, if a receiver has authority to raise the question at all, I will entertain an application for the appointment of a receiver, in order that action may be taken at once, without waiting for what may be the somewhat tardy appointment of a trustee.
The clerk is also directed to amend the order of January 20 so as to read that the appointment of the referee was made after hearing the arguments of counsel, and upon their consent, and also that the referee was directed to hear such evidence as might be offered by Gerenday, as well as by the petitioning creditors.