29 F. Cas. 1327 | E.D. Mich. | 1876
It has already been held by this court, in the case of Ber-geron [Case No. 1.342], that the attaching creditor has the right to intervene and contest the jurisdictional allegation of the petitioner, as to the number and amount of creditors. All the cases up to that time are cited in this opinion. Since then, however, the same question has been similarly decided by the district judge of the Eastern district of Wisconsin. In re Hatje [Id. 6,215]. It is claimed, however, by the petitioning creditors in this case that, although he may have the right to intervene to object to the juris
The question next arises whether the petitioning creditors are not estopped to claim the bill of sale set forth in the petition as a preference, to be an act of bankruptcy. The intervening petition sets forth (and for the purposes of this motion, it must be taken as true), that four of the petitioning creditors were officers of the bank to which the bill of sale was made at the time the same was executed; that they and two others of the petitioners transferred their claims set up in the petition to the bank; that said claims were held by the bank at the time the bill of sale was taken and constituted a part of the claim named in the bill of sale, which it was taken and intended to secure, and that said security was procured with the consent and at the instance of these creditors, and that they were not entitled to be represented in the petition. It further sets forth that five of these creditors, acting for themselves and the bank, have undertaken to defeat petitioner's claim, under his attachment, by asserting their lien under the bill of sale, and have combined with Williams to procure an adjudication and thereby to work a dissolution of his attachment lien. The law is as well set-tied in bankruptcy as in equity, that the party who has become a party to. assented or taken benefit from a fraudulent conveyance, is es-topped thereby to claim the same as a fraud or an act of bankruptcy. A party cannot thus take advantage of his own wrong, as observed by Judge Leavitt in Re Langley [Case Xo. 11.-006]: “The well known doctrine of estoppel is undoubtedly applicable in such a ease, if the facts justify its application. It would be clearly in violation of a rule of good morals as well as of law. that one should give his assent and approval to an act, and afterwards, for his own advantage, denounce the act as illegal and immoral." In the Case of Schuyler [Id. 12,494], creditors who had assented to a transfer from a common law assignee for the benefit of creditors to another assignee, were held estopped from questioning the original assignment. See. also, Spicer v. Ward [Id. 13,241]; In re Massachusetts Brick Co. [Id. 9,259]; Bamford v. Baron, 2 Term R. 594, note; Hicks v. Burfitt, 4 Camp. 235, note; Ex parte Kilner, Buck, 104; Ex parte Cawkwell, 19 Ves. 233; Back v. Gooch, 1 Holt, N. P. 13. I think it entirely clear in this ease that the creditors-whose claims are secured by this bill of sale would be estopped to claim its execution as an act of bankruptcy.
The only other act charged is the suspension and non-payment of a note, dated July 15, 1875, payable sixty days after date to the order of William Hamilton. The intervening petition further sets up that the bank and the petitioner Hamilton procured a transfer from Williams to the bank, of all his property, money, credits and effects to secure the payment of this note, and that by such transfer Williams was deprived of the means of paying the same, and the bank and Hamilton thereby obtained the means with which payment of such note could have been made within the forty days, and therefore that the petitioning creditors have no right to set up the non-payment of the note as an act of bankruptcy; though it was clear that Williams could not, as against creditors not assenting thereto, set up the assignment of his property for the benefit of creditors as an excuse for non-payment of his commercial paper, still I think the creditors who have procured such assignment, and thereby taken the means by which Williams might reasonably be expected to pay the note, are as much estopped to claim the non-payment of the note as an act of bankruptcy as they are to claim the assignment itself to be such. But it is insisted, that, granting that the debtor might claim these estoppels, the same defense cannot be made available in the hands of the intervening petitioner. The general rule is unquestioned, that only parties to a deed and those in privity with them, can be bound by it. or take advantage of the estoppel created by the instrument. Bigelow, Estop. 269. It only remains to inquire whether Crapo is a privy to the estate of the debtor within the meaning of the law. The term ‘privity” (Greenl. § 189) “denotes mutual or successive relationship to the same acts of property.’'’ Such relationship may be cast upon the privy by the voluntary act of the party, or by the act of the privy himself, proceeding in -hostility to the parry. Privies in estate exist where there is a mutual or successive relationship to the right of property, not occasioned by descent or by act of law. Freem. Judgm. § 162. Privies in estate are simply distinguished from strangers. and the manner in which the party be