134 F. 498 | E.D. Pa. | 1905
In this case an involuntary petition in bankruptcy was filed, and the alleged bankrupt filed an answer denying that he had committed the act of bankruptcy set forth in the petition, or that he was insolvent, and requested that these issues be tried by a jury, according to the provisions in the bankrupt act. Accordingly, an issue was framed, and the case was tried by a jury, and a verdict rendered finding against the bankrupt. Evidence was offered of the entry of two judgments against the bankrupt in the court of common pleas of Philadelphia county within four months, which he failed to vacate or discharge within five days before the sale of his property, upon which a levy had been made by the sheriff of the county. There was no dispute as to these facts tending to establish the commission of the act of bankruptcy. As to the question of his insolvency, the creditors offered in evidence two other judgments, which had been entered in the court of common pleas of Philadelphia county, one of which had been opened by that court for the purpose of allowing the defendant, who is the alleged bankrupt, to make a defense, and was objected to for that reason. The other judgment was offered in evidence as a subsisting claim against the alleged bankrupt, and was objected to upon the ground that it was entered of record in the said court more than four months before the date of the commission of the act of bankruptcy, and for the other reason that it was for more than was due the plaintiff in the judgment. Counsel for the creditors, however, stated the fact that the whole amount of the judgment was not due, and only submitted it as evidence of an indebtedness, and stated the correct amount, to wit, $975. All the other claims not of record were offered in evidence, making a total of about $.20,941.37. Claims amounting to $11,782.95 were offered in evidence for the Rothaker Brewing Company by G. E. Rothalcer, Jr., who produced an extract from the books of their company, and was allowed to testify to the claims from this statement, which was objected to by the counsel for the bankrupt upon the ground that it was necessary to produce the books. He was, however, allowed to testify to the amount, and the books were subsequently produced for the purpose of examination by the bankrupt’s counsel, and for the purpose of examining the witness as to the books and the correctness of the indebtedness ; but the bankrupt’s counsel did not call the witness for that purpose, although the books were produced. Other claims were admitted in the same way. Herman Voight was permitted to testify that the bankrupt was indebted to him in the sum of $1,500 for notes and interest, but he did not produce these notes because they were not due and payable at this time. However, the indebtedness had been created prior
Upon the question of assets counsel for the bankrupt offered to prove that at the time the hotel property in Philadelphia had been transferred by him there was a verbal agreement that upon the payment of certain indebtedness the property should revert to him, and that the value of this equity was worth $20,000, although the deed on its face was an absolute fee-simple deed, without any reservations. This evidence was excluded. The bankrupt’s business was that of a hotel keeper, and at the time of the commission of the act of bankruptcy was a licensee of a hotel in Philadelphia. Some time prior fa> the trial of this case new licenses for the year were issued in Philadelphia, and the bankrupt was unable to raise sufficient money to take out the new license at a cost of $1,100, and the receiver was directed to sell his license, and to provide for payment of the license fee for the new license for the coming year. He accordingly advertised and sold the same for $14,900 if the purchaser paid for the new license, and $16,000 if the receiver was required to pay the license fee. These facts were established, and the court charged as follows:
“A number of amounts have been presented, among them $11,782.95 of the Rotbaker Brewing Company, in which there is $1,100 charged for the payment of a license fee which was paid by them on the 11th day of May, which was long subsequent to the presentation of the involuntary petition in bankruptcy. That was paid for the purpose of preserving the only valuable piece of property that was convertible in bankruptcy to pay the debts of this defendant, and I charge you, gentlemen of the jury, that this is a fair item to place in this total of liabilities, because, if it is not placed in the liabilities, according to the testimony, it is to be taken off! of the value of the license, because the party who purchased that license was to give $16,000 for it with the license fee paid, or $14,900 if he paid license fee for this year.”
The court also charged that debts payable in the future were to be taken into consideration on the question of insolvency, and submitted to the jury the question as to what amount of indebtedness had been offered in evidence, and the amount proven to their satisfaction of that submitted. The jury were also told that a liquor license in a bankrupt court was an asset for the payment of debts.
Twenty exceptions were filed to the admission and rejection of evidence and the charge of the court, which may be classified as follows: (1) To the admission of a judgment entered in the court of common pleas, which had been opened for the purpose of allowing the defendant to make a defense to the claim; (2) to the record of a judgment entered against the bankrupt more than four months before the commission of the act of bankruptcy; (3) to the admission of claims by witnesses without requiring them to testify from books of original entry, although the books were produced in court subsequently by the witnesses; (4) to the admission of evidence as to indebtedness on notes without producing the same in court; (5) to the rejection of the offer of evidence, on the part of the bankrupt, to show the value of an equity in real estate, for which he had given an absolute deed in fee simple; (6) to the charge of the court directing them to take into consideration
1. We think there was no error committed in allowing the record of the judgment entered in the court of common pleas of Philadelphia county to be offered in evidence, although it had been opened for the purpose of allowing the defendant to make a defense to it. It was a subsisting claim, and, if he had a defense to the claim as a subsisting one against his estate in bankruptcy, he could have made it before the jury; but he offered no evidence whatever to show that he was not indebted to the plaintiffs in that judgment.
2. It was entirely competent to offer evidence of the judgment, although entered in the court, of common pleas more than four months before the commission of the act of bankruptcy, for the purpose of showing the solvency or insolvency of the bankrupt; and the evidence of Mr. Gaidas was in his favor, as it established the fact that, instead of over $4,000 being due on this judgment, there was only subsisting a claim at that time of $975.
3. A number of claimants were permitted to state from memoranda taken from books of original entry the respective amounts of their claims, who afterward produced their books in court for the purpose of being cross-examined by counsel for the alleged bankrupt, if he saw fit to do so. This evidence was submitted to the jury for the purpose of showing them the claims due from the bankrupt’s estate to that
4. The admission of evidence of an indebtedness, for which notes were held, not yet payable, was submitted to the jury, and there was no denial of the existence of this indebtedness. If it had been disputed, another question might be presented; but we see no reason why the jury should not be permitted to find the existence of this indebtedness, upon the evidence submitted in regard to it, when the alleged bankrupt was on the stand, and did not deny that the notes had been given and the indebtedness existing as testified to by the claimant.
, 5. The bankrupt set up a verbal agreement, which he alleged was made by him with the grantee of a property, to whom he had given a deed in absolute fee simple, to the effect that upon the payment of certain judgments and claims that the property was to revert to him, and he offered to prove this reversionary interest arising out of this verbal agreement was an asset valued at $20,000. This was ruled out, and we think the statement of the facts in connection with it is a sufficient answer to the offer.
6. Before the trial of this case it was necessary to renew the license, which was the asset of greatest value in this estate. The record of this case before the trial .will show that the alleged bankrupt was given the option of continuing in possession of the property, provided he could pay for the new license, which was to be taken out on a certain date to prevent its being forfeited. He failed to raise sufficient cash for that purpose, and the receiver was directed to sell the license and to pay the new license fee in order that this asset might be preserved. He accordingly advertised the license for sale, and sold to the present owner for $16,000 provided he (the receiver) paid the license fee, but the purchasing price was to be $14,900 in case the purchaser paid the license fee. In view of this condition of affairs, and the necessity of preserving this asset, the charge of the court, as above set forth, was fully warranted.
The question of the amount of indebtedness proven was submitted to the jury for them to find what.amount existed at the time the petition was filed. The amounts specified in the charge of the court were simply amounts to which the items totaled in various aspects of the case, but the question as to the total amount proven was to be determined by the jury.
As to the question of whether or not a liquor license was an asset, we do not see how the bankrupt could be injured by the instructions of the court that it is an asset, as he was interested in showing assets to an amount greater than his indebtedness, and the charge of the court, in holding the license to be an asset, was to that extent favorable to his contention of solvency.
Motion for a new trial refused.