162 F. 685 | N.D. Iowa | 1908
This suit is by complainant, as trustee in bankruptcy of the estate of Ira E. Eldregde, bankrupt, to recover of the defendant bank and John J. Large, its cashier, the value of certain real and personal property alleged to have been transferred and conveyed to them by the bankrupt as a preference within the four months immediately preceding the bankruptcy. The answer admits that the property was transferred by the bankrupt to the bank within the four months prior to the bankruptcy to apply upon a debt then owing by him to the bank; but it alleges that a part of the property so transferred was property, or the proceeds of property, exempt to the bankrupt under the statutes of Iowa, and that the whole was so transferred pursuant to an agreement made with the bankrupt more than four months prior to the bankruptcy. The complainant filed a formal demurrer to the answer upon the ground alone that the facts alleged did not constitute a defense to the allegations of the bill. Counsel have filed a written stipulation that the demurrer maybe considered as an application to set the case down for hearing upon bill and answer, and that the ruling upon the demurrer shall have the same effect as upon a demurrer to an answer in a law action, and
A demurrer to an answer in equity is unknown to the equity practice, and the only way of testing the sufficiency of an answer in equity as a defense to the bill is to set the cause down for hearing upon bill and answer. Banks v. Manchester, 128 U. S. 224—250, 9 Sup. Ct. 36, 32 L. Ed. 425; In re Sanford Fork & Tool Co., 160 U. S. 247-257, 16 Sup. Ct. 291, 40 L. Ed. 414; 1 Bates, Fed. Eq. § 216. A formal demurrer filed to an answer may, however, be treated by the court, in the absence of objections to so doing, as an application to set the cause down for hearing upon bill and answer, or as an exception to ,the answer for impertinence, or for failure to answer fully according as its contents may present the one or the other of .these questions. If exceptions are taken for impertinence, or for failure to answer fully, and are allowed,, the answer may be amended; but, if the cause is set down for hearing upon bill and answer, the allegations of the bill not denied, and of the answer, are admitted, and the cause is submitted -for final decree upon the merits. In re Sanford Fork & Tool Co., 160 U. S. 247-257, 16 Sup. Ct. 291, 40 L. Ed. 414. It is obvious from’the stipulation of the parties in this case that neither intended to so submit'this cause, and it might work an injustice to one or the other of, them to so dispose of it upon this submission.
• Upon the question of the sufficiency of this answer to constitute a defense 'to the bill, it may be observed, however, that, if a part of the property transferred by the bankrupt to the bank was exempt, or the proceeds of exempt property, under the Iowa statute, the-creditors generally would have no right thereto, nor the trustee to recover the samé for their benefit. In re Eash, 157 Fed. (D. C.) 996. As to the other property, if it was transferred to the bank within the four months immediately preceding the bankruptcy1, to apply upon a prior debt of the banlcrujjt, though in pursuance of an agreement made'with him prior-to said four months that he would do so, it
In view of the manner in which the so-called demurrer has been submitted, leave is granted to each of the parties to amend his pleadings; the complainant in 15 days, and the defendants by the August rules, so that each may stand thereon if he shall be so advised.
It is ordered accordingly.
