208 F. 97 | 8th Cir. | 1913
This was a suit by Joseph R. Palmer, as trustee in bankruptcy of William W. Reid, to set aside a deed of trust of 230 acres of land made by the bankrupt to W. O. Mayes, as trustee for Charles A. Mayes, as an unlawful preference under subdivisions “a” and “b” of section 60 of the bankruptcy act of 1903. So far as ' material those sections then read:
“(a) A person shall be deemed to have given a preference if, being insolvent, be bas, witbin four months before the filing of the petition, * » * made a transfer of any of bis property, and the effect of the enforcement of such * * * transfer will be to enable any one of bis creditors to obtain a greater percentage of his debt than any other of such creditors of the same class. Where the preference consists in a transfer, such period of four months shall not expire until four months after the date of the recording or registering of the transfer, if by law such recording or registering is required.”
“(b) If a bankrupt shall have given a preference, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from sixch person.”
It appears that William W. Reid, the bankrupt, had been for many years county judge of Lincoln county, Mo., retiring about January 1, 1907. He* had been a farmer, a merchant, and a banker. In the later years he resided at Elsberry, Mo. He had an excellent reputation for integrity and was supposed for a long time to be wealthy. June 22, 1908, a petition in involuntary bankruptcy was filed against him and on October 2d he was adjudged a bankrupt. On November 23d Joseph R. Palmer was elected and qualified as trustee as provided by law. November 24, 1903, William W. Reid borrowed of Charles A. Mayes $2,500 upon an unsecured note signed by himself and B. C. Welch due one year after date, with interest at 7 per cent. About 1906 or 1907 Charles A. Mayes bought two notes both signed by William W. Reid and B. C. Welch, one dated in March, 1902, for $91, due six months after date, and the other dated in April, 1902, for $500, due one year after date. On January 24, 1908, Charles A. Mayes loaned William W. Reid $3,000 upon the note of Reid and B. C. Welch due one year after date. The obligations of Reid to Mayes, exclusive of interest, thus amounted to $6,091. In the spring of 1908 Charles A. Mayes suddenly became insistent upon these notes being paid or secured. He had held the note of November 24, 1903, which had been past due for nearly 3% years, and never collected any interest upon
The Supreme Court in Thompson et al. v. Bowman, 6 Wall. 316, 18 L. Ed. 736, said:
“There is no doubt that a copartnership may exist in the purchase and sale of real property equally as in any other lawful business. Nor is there any doubt that each member of such copartnership possesses full authority to contract for the sale or other disposition of its entire property, though for technical reasons the legal title vested in all the copartners can only be transferred by their Joint act. But the fact that real property is held in the joint names of several owners, or in the name of one for the benefit of all, is no evidence of copartnership between them with respect to it. In the absence of proof of its purchase with partnership funds for partnership purposes, real property standing in the names of several persons is deemed to be held by them as joint tenants, or as tenants in common; and none of the several owners possesses authority to sell or bind the interest of his co-owners.”
The referee and the District Court both found there never was any partnership and in that finding we concur. But even if there was a partnership all the obligations were included in notes signed in the individual names of William W. Reid and B. C. Welch, and one holding the individual note of William W. Reid and B. C. Welch could not be informed that these men were partners, and he could recover nothing from William W. Reid until his individual debts were all paid. There is no such rule as this on the marshaling of assets.
For all three of these reasons we think this position of the appellants could not be sustained, and the last two reasons would defeat the appellants’ contention even if there was a firm and if there had been an express adoption of the debts of the firm by William W. Reid. Treating the notes signed by William W. Reid and B. C. Welch as the indebtedness of William W. Reid, there can be no doubt that he was hopelessly involved on May 28, 1908.
The evidence shows the transfer was made within four months of the filing of the petition, and it appearing that William W. Reid was at the time hopelessly insolvent, it is quite apparent that the effect of the transfer if sustained would be to enable Mr. Mayes to obtain a greater percentage of his debt than the other creditors of the same class.
“A fellow says lie will sometimes get money when he don’t get it.”
Fie was not satisfied about the condition things were in. Mr. Reid testified in the last talk he told Mr. Mayes that he did not like to ask ■ his wife to sign the papers. Mr. Mayes said she did not have to sign them. He said he did not propose to have it recorded; did not aim to have it recorded. ¡
.“The day we fixed it up Mr. Mayes said he would leave it with Mr. Palmer; there would be nothing done in this until you give your consent to it or know about it or something to that amount. Mr. Mayes spoke to me frequently about security, insisted on it. I told him he would get his money. He said he didn’t think he would. He was afraid he wouldn’t.”
‘•If a man had some notes against a party part cine and part not due. could lie sue all of them, those that were not due as well as those that were due?”
That Mr. Mayes was back in his office some time from the 24th to the 27th of May and said:
“ ‘I have some notes against Iteid and I have learned that he is very heavily indebted’ or ‘broke’ or something to that effect. It left the impression with me that the judge was busted. lie says, Tart of them are due and part not due;’ and he says, “I have been trying to get Judge Reid, to give me some security but be has not done it yet.’ lie says, T am going to try further to get the security.’ lie said he would sue Judge Reid but if be did the other people would all come in and there would not be anything for any of them; his other creditors would tile suits and there would not be anything for any of them. Mr. Mayes said, referring to the deed of trust, ‘I have agreed to leave it here with Joe for him to keep and nothing to be done with it,’ or ‘not record it,’ I do not recall just which he said, ‘until you (Judge Reid) give your consent.’ ”
Mr. Palmer further testified that on June 5th Mr. Mayes came to his office and asked Palmer if he would let Imn have the deed of trust. Mr. Palmer told him that he knew the agreement under which it was left there and that he would rather not do it unless Mr. Reid was present and gave his consent. Mr. Mayes said if lie would let him have if he would take it by Judge Reid’s house that evening and unless Judge Reid gave his consent that he should have it recorded he would leave it with Judge Reid. Mr. Palmer told him that under these circumstances he would let him have it and did so.
While it is true that substantially all of this evidence is denied by Mr. Mayes, the mere recital of it is sufficient to show that we ought not to interfere with the finding of the trial Judge that Mr. Mayes had reasonable cause to believe that it was intended by the transfer to give a preference. This conclusion makes it unnecessary to consider other points raised in the argument, and the decree is affirmed, at the cost of the appellants.