187 Mo. App. 597 | Mo. Ct. App. | 1915
Plaintiff, Trustee in Bankruptcy of the estate of the Automatic Music Company, a business corporation located in Kansas City, * Missouri, brought this suit to recover the value of an alleged voidable preference made by the bankrupt within four months before the filing of the petition in bankruptcy. A demurrer to the petition was sustained and plaintiff, declining to plead further, stood on his petition and appealed.
The facts stated in the petition are as follows:
The petition in bankruptcy was filed December 11, 1912, the corporation was adjudged a bankrupt on August 9, 1913, plaintiff was appointed and qualified Trustee on September 8, 1913, and on December 26, 1913, was ordered to institute this action, which was done on the same day the last-mentioned order was made.
For a year or more prior to the filing of the petition in bankruptcy, the said Music Company had been purchasing pianos and piano appliances from the defendant and on said December 11, 1912, and for several weeks prior thereto, the said Music Company was largely indebted to defendant on that account.
On December 3, 1912, said Automatic Music Company made a voluntary and ex parte application to the circuit court of Jackson county, Missouri, for the appointment of a receiver of its affairs, and in that ex parte hearing, unauthorized by law and not founded upon any cause of action against said corporation, and at the instance of the corporation itself, an alleged receiver was appointed for it on the ground of its own
On December 11,1912, defendant made application to the circuit court, wherein the alleged receiver had been appointed, for an order on the receiver to turn over to defendant a large number of pianos, and the proceeds of certain other pianos, then in the possession and control of said receiver, which application was based on the alleged ground that the said pianos and proceeds belonged to defendant and not to the insolvent corporation by virtue of a consignment contract between defendant and said coporation. Said application was sustained, and the receiver was ordered to turn over, and did turn over, to defendant a large number of specified pianos of the aggregate value of $1735, and also a number of specified promissory notes given by customers of the Music Company for the purchase price of other pianos, aggregating $2925 in value.
Said petition further alleged that said pianos and notes did not belong to defendant but were the property of said insolvent corporation; that the transfer of said property occurred within four months of the filing of the petition in bankruptcy; that the effect of said transfer was to, enable defendant to obtain a greater percentage of its debts than any other creditor of said corporation of the same class; that said corporation was insolvent at the time said property was turned over and said transfer operated as a preference, and defendant, and its agents acting for it, knew, or had reasonable cause to believe, that fact.
The petition further alleged that the defendant, after receiving said pianos and notes, converted them to its own use and disposed of same, and that plaintiff elected to sue for the value thereof, which was alleged to be $4660 for which judgment was prayed.
In our opinion it was error to sustain a demurrer to plaintiff’s petition. It is true the petition contains some statements which are doubtless conclusions of
The same may be said concerning the allegation of the petition as to the validity of the receivership. The
The appointment of the receiver and all orders made therein being void, of course, the turning of the insolvent corporation’s property over to one of its creditors was also void, and the situation is the same as if the corporation itself had voluntarily turned said property over to the defendant. And, since it was done within four months of the filing of the petition in bankruptcy and under circumstances from which defendant must have known, or had reasonable cause to believe, that it would effect a preference, it is voidable by the trustee under the terms of the National Bankrupt Act. And this applies even to judgments procured or suffered to be entered against the bankrupt within that time under the terms of Par B., sec. 60, of the Bankrupt Act as amended by Act of Congress of June 25, 1910'. [36 U. S. Stats, at Large, Chap. 412, p. 842; 3 Reming
“b If a bankrupt shall have procured or suffered a judgment to he entered against him in favor of any person or have made a transfer of any of his property, and if, at the time of the transfer, or of the entry of the judgment, or of the recording or registering of the transfer if by law recording or registering thereof is required, and being within four months before the. filing of the petition in bankruptcy or after the filing thereof and before the adjudication, the bankrupt be insolvent and the judgment or transfer then operate as a preference, and the person receiving it or to he benefited thereby, or his agent acting therein, shall then have reasonable cause to believe that the enforcement of such judgment or transfer would effect a preference, it shall he voidable by the trustee and he may recover the property or its value from such person. And for the purpose of such recovery any court of bankruptcy, as hereinbefore defined, and any State court which would have had jurisdiction if bankruptcy had not intervened, shall have concurrent jurisdiction. ’ ’
By virtue of this Act and of the facts stated in the petition the trustee is entitled to recover the reasonable value of the goods and property at the time they were turned over to defendant. [Moore v. John H. Smith & Sons, 205 Fed. 431.]
The case of Beekman Lumber Co. v. Acme Harvester Co., 215 Mo. 221, cited by defendant, has no application here. In the first place, it arose' and was decided prior to the amendment of the above mentioned paragraph of the Bankrupt Act in 1910; and in the next place, there was no adjudication of bankruptcy in the Beekman case as there has been in the case at bar.
Neither can defendant call to the aid of its demurrer the well-known rule that as the circuit court is a court of general jurisdiction all presumptions may
It is not necessary to decide what would have been theeffectofbankruptcyproceeding on the circuit court’s action in the alleged receivership if jurisdiction had existed to appoint the receiver. Neither the trustee nor any one else was a party thereto to be bound thereby for failure to object. And if the Bankrupt Act can render void the acts of the parties themselves, when done within a certain date of the bankruptcy proceedings and under certain circumstances, then it can render voidable what a court has done for them under those specified circumstances, else the National Bankrupt Law is not paramount.
The judgment is reversed and the cause remanded, so that the trustee may be permitted to offer his testimony in support of the prayer of his petition.