155 F.2d 221 | 10th Cir. | 1946
Thomas K. Hudson and Clarence W. Button, attorneys at law, filed in the United States Court for Colorado a petition in involuntary bankruptcy against R. E. Schreffler. It was alleged that Schref-fler owed debts in the amount of $1000 or over; that the number of his creditors was less than twelve; that the petitioners had provable and unsecured claims against him amounting in the aggregate to $500 or more; that such claims were in the amount of $3470.83 and were for services rendered to Schreffler at his instance and request; and that Schreffler had within four months next preceding the filing of the petition committed three acts of bankruptcy, each consisting of the sale of property with the intent to hinder, delay, or defraud his creditors. Schreffler seasonably filed an answer in which he denied that he owed debts of $1000 or more; denied that petitioners were his creditors or that he owed them anything; and admitted the sales of property specified in the petition but denied that they were made with the intent to hinder, delay, or defraud his creditors. The answer contained a counterclaim in which it was alleged that Schreffler engaged Button to perform certain legal services; that Button departed to enter the military serv
Error is assigned upon the action of the court in dismissing the counterclaim. Since the order of dismissal expressly provided that it was without prejudice to the right of the alleged bankrupt to have the matter passed upon in the proceedings before the referee, it is doubtful whether any prejudicial effect resulted. But treating the order as a final dismissal of the counterclaim, it may be conceded, without deciding, that the substance of the counterclaim could appropriately be pleaded as an affirmative defense to the allegation in the petition that the petitioners were creditors of the alleged bankrupt and held a claim or claims against him of $500, or more, specifically of $3470.83 for services rendered. Still the substance of the counterclaim was not pleaded in that form or for that purpose. Instead, it was pleaded solely as the basis for recovery of a personal judgment for damages against one of the petitioners. We are not aware of any statute or established principle of law which permits an alleged bankrupt to recover judgment in-that manner.
The order of adjudication is challenged on the ground that it was improvidently entered in the face of jurisdictional issues joined upon the pleadings, in the face of a demand for trial by jury upon such issues, and without the submission of any evidence. Section 3 of the Bankruptcy Act, as amended, 52 Stat. 840, 844, 11 U.S. C.A. § 21, provides among other things that the conveyance, transfer, concealment, or removal of property with the intent to hinder, delay, or defraud creditors shall constitute an act of bankruptcy. Section 4, sub. b, 11 U.S. C.A. § 22, sub. b provides that, with certain exceptions not material here any natural person owing debts of $1000 or more may be adjudged an involuntary bankrupt. And section 59, sub. b, 11 U.S.C.A. § 95, sub. b, provides that three or more creditors who have provable claims against a qualified person, fixed as to liability and liquidated as to amount in the aggregate amount of $500 or more, or if the creditors are less than twelve in number, then one of such creditors whose claim equals such amount, may file an involuntary petition against such person. The filing of a petition, as here, by two petitioners charging among other things that' the alleged bankrupt owes debts of $1000 or more; that the petitioners hold a provable claim against him in the aggregate amount of $500 or more, that the total number of his creditors is less than twelve; and that he has within four months preceding the filing of the petition conveyed, transferred, concealed, or removed some or all of his property, with the intent to hinder, delay, or defraud his creditors, specifically describing the act, gives the court jurisdiction of the proceedings. But if these jurisdictional allegations are seasonably put in issue, they must be established by proof before an order of adjudication is warranted. Here, the alleged bankrupt seasonably denied that he owed debts of $1000 or more; denied that the petitioners held claims against him of $500 or more, or for
The order dismissing the counterclaim is affirmed. The order of adjudication is vacated and the cause remanded.