111 F. 158 | 8th Cir. | 1901
This is an original petition addressed to this court for the purpose of obtaining a review of an order made in a bankruptcy proceeding by the United States district court for the Western district of Arkansas. The opinion of the district judge on which the order in question was based is reported in 106 Fed. 873. The petition for review discloses the following facts: John D. Bender was adjudged a bankrupt on March 12, 1901, under an involuntary petition which was filed on P'ebruary 2, 1901. Previous io the institution of bankruptcy proceedings, and on or about October 8, 1900, Bender had executed mortgages upon his property, and had placed the same of record, which, as his creditors claimed, were fraudulent and operated as a preference, lie being at the time insolvent. On March 12, 1901, certain affidavits were filed in behalf of the bankrupt’s creditors, which charged, in substance, that the bankrupt was neglecting his property, and that it was liable to be disposed of improperly unless a warrant was issued to the marshal requiring him to take immediate possession of all of his property. In view of the representations so made, a warrant of seizure
[n the case of Bryan v. Bernheimer, 181 U. S. 188, 21 Sup. Ct. 557, 45 L. Ed. 814, which was recently decided by the supreme court, it was held that clause 3 of section 2 of the bankrupt act vests courts of bankruptcy with authority after the filing of a petition in bankruptcy, and also after an adjudication in bankruptcy, but before the trustee has qualified, to appoint a receiver or the marshal to take charge of the property of the bankrupt when it is deemed absolutely necessary to do so for the preservation of his estate. In the same case it was also decided that a warrant issued to the marshal under such circumstances authorizes that officer to take possession of the property of the bankrupt in the hands of third persons who claim title thereto, and in that behalf certain observations of Mr. Justice Miller in Sharp v. Doyle, 102 U. S. 686, 689, 690, 26 L. Ed. 277, showing the necessity which exists in certain cases for the exercise of such a power, were quoted with approval. Reference was also made with approval to the decision in Feibelman v. Packard, 109 U. S. 421, 3 Sup. Ct. 289, 27 L. Ed. 984, wherein it was held that a district court of the United States sitting in bankruptcy has jurisdiction to seize goods that are the property of the bankrupt, although they are in the possession of another person under a claim of title,
It follows, therefore, that on the showing made by the creditors of Bender the 'district court properly issued an order directing the marshal to take possession of all his property and effects, and that under that order the marshal had the right to take possession of such property, although it was found in the custody of third parties, and was claimed adversely by them. The decision in Bryan v. Bernheimer, supra, seems to answer all of the contentions on the part of the petitioner. The marshal had a valid warrant for the seizure of all the bankrupt’s property of every kind and description. He found the saloon and its contents in the actual possession of the bankrupt, and was not advised that the bankrupt claimed to be in possession as a bailee or agent for the petitioner. When this latter fact was averred by Young in support of his motion for a restoration of the property, it was met by a counter averment on the part of the bankrupt’s creditors to the effect that the mortgage under which the petitioner claimed title to the property was fraudulent and void, that the saloon and its contents in reality formed a part of the bankrupt’s estate, that it was rightfully held by the marshal, and that the possession thereof ought not to be surrendered to the petitioner. The order of the district court which we are asked to review was in effect a refusal to try the issues thus raised upon a mere motion. Inasmuch as the marshal had the right to seize the saloon and its contents, although it was held adversely by the petitioner, if it was in fact and in law the bankrupt’s property, the district court could not grant the motion and order a surrender of the property without hearing such evidence as the bankrupt’s creditors might produce, and deciding whether the property formed a part of the bankrupt’s estate. It declined to do this upon a mere motion, and remitted the petitioner to his action at law in any court of competent jurisdiction, or to an intervention in the bankruptcy proceeding, where the issues involved could be more formally presented and determined. It is manifest, therefore, that the order made below was not an erroneous order which this court should disturb, unless it be true that the petitioner had the right to have the controversy between himself and the bankrupt’s creditors touching the ownership of the saloon determined on a mere motion. He was denied no other right, since the order made below leaves him at full liberty to assert his title to the property in controversy in any other appropriate form of proceeding. We are unable to hold that tiie peti
The petition to obtain a review and a nullification of that order is accordingly dismissed at the costs of the petitioner.