276 F. 266 | 8th Cir. | 1921
On July 2, 1920, Peterson, Satterfield, Fuller, Brooke, McNally. Davidson, and Alexander, claiming to be creditors of Missouri Valley Cattle Loan Company, filed an involuntary petition in bankruptcy against it praying that said company be adjudged a bankrupt. The petitioners claimed to be creditors for the reason that they had been induced to enter into contracts for the purchase of the stock of the alleged bankrupt by false and fraudulent representations of its agents, and that in pursuance of said contracts petitioners had given to it cash and promissory notes; that some of the notes had passed into the hands of innocent purchasers. Peterson also claimed to be the owner of a note indorsed by the alleged bankrupt. The alleged bankrupt was declared to be insolvent and while insolvent dad committed certain acts of bankruptcy which were stated in general terms. On July 28, 1920, the Farmers’ State Bank of Springfield, Neb., Clark H. Fuller, Frank R. Beebe, and Floyd Davidson, claiming ro be creditors of the alleged bankrupt, filed an intervening petition wherein they joined in the prayer of the petition of Peterson et al. The claim of the bank arose on account of the ownership by it of certain notes endorsed by the alleged bankrupt. Puller’s claim was based on a judgment. The claims of Beebe and Davidson were of the same character as the original petitioners. The intervening petition alleged specifically that the alleged bankrupt had on July 1, 1920, while insolvent and within four months next preceding the filing of the original petition, applied for a receiver of its property, and further that
The alleged bankrupt answered, the original petition- and the intervening petition of the Farmers’ State Bank et al. by filing a general denial. On August 2, 1920, Walker, Van Syckle, and Heldman, claiming to be creditors of the alleged bankrupt, were allowed to intervene and they joined in the prayer of the original petitioners. The claim, of these interveners arose in the same way as those in the original petition. August 18, 1920, the trial court after hearing a part of the evidence of the petitioners and interveners adjudicated the alleged bankrupt a bankrupt upon the following findings:
“1. That the said petitioners have provable claims against the said Missouri Valley Cattle Loan Company in excess of the sum of $500, and that the indebtedness of said Missouri Valley Cattle Loan Company on July 1. 1920, was in excess of the sum of $1,000.
“2. The court finds that the subscriptions to the capital stock of the respondent corporation were obtained by means of a scheme to defraud stock subscribers in said corporation, which scheme to defraud was set on foot and carried out by one R. V. MeGrew, the Missouri Valley Finance Company, and others associated together in said scheme to defraud, and out of all stock subscriptions so obtained, on account of which money, notes, or anything of value was obtained by the company a liability arose from the corporation to the subscriber for the amount so received. The respondent corporation, by reason of such liability and indebtedness to said stock subscribers, was insolvent on the 1st day of July, 1920, and by reason of said indebtedness the indebtedness of said respondent exceeded the fair value of its assets.
“The court further finds that the number of said stock subscribers is large, and the above finding applies' to them generally, but is made without prejudice as to any particular claim that may be drawn in question in the bankruptcy proceedings.
“Provided, however, that nothing contained in these findings and order of adjudication shall determine or affect the order of priority among creditors in the distribution of the funds of the bankrupt.
“3. The court further finds that the appointment of receivers for said Missouri ’Valley Cattle Loan Company on July 1, 1920, was an act of bankruptcy.”
“ * * * Or, being insolvent,- applied for a receiver or trustee for his property or because of insolvency a receiver or trustee has been put in charge of his property under the laws of a state, of a territory, or of the United States.”
The act of bankruptcy, if any, committed by the alleged bankrupt so far as the record shows, is alleged to have arisen under the language
If we look to the record outside of the findings of fact, we find that to the intervening petition of the Farmers’ State 1’anlc et al. there was attached as an exhibit the complaint and answer in the cause ii. equity in which the receiver was appointed. The action as appears from the exhibit was brought by the stockholders of the alleged bankrupt to wind up its affairs, but the complaint alleges that the corporation was solvent, and the answer of the corporation admitted this allegation and prayed that such relief might he granted as justice and equity might require. It is said by counsel that the question as to whether the alleged bankrupt applied for the appointment of a receiver is not questioned on the record. This cannot be said to be so in the face of the general denial of the. allegations of the petition and intervening petit ions in bankruptcy filed by the alleged bankrupt and in-terveners. Reference is made in the briefs to a discussion had between the trial court and counsel at the trial of the bankruptcy action. We are of the opinion that this discussion between the court and counsel cannot be considered by us in the determination of the case. There is found in the record a document called “Appellees’ Statement of the
Reversed.