In re Pardo
In re Pardo
Opinion of the Court
delivered the following opinion:
This matter comes to the court from the referee on the latter’s certificate for advice as to a question that arose in the proceedings before him.
The question to be decided is whether a creditor of the bankrupt, who brought a suit and attached the goods of the bankrupt a few days before or after the filing of the bankrupt’s voluntary petition, and in the- same month, and shortly thereafter secured judgment and sold the goods levied upon in part satisfaction of his debt, should be required to turn the money over to the trustee in bankruptcy.
The inference and conclusion to be drawn from the evidence taken before the referee, and which-has been certified to us, is that this creditor undoubtedly had full knowledge of the insolv
We do not see how any question can have arisen regarding the rule of law on these facts. Under § 67c of the bankrupt act of 1898, this attachment lien was released by the mere filing of the petition in voluntary bankruptcy by the debtor; and from that instant the property belonged to the trustee in bankruptcy then or thereafter to be appointed. The referee evidently must have confounded the issue with issues in a class of cases upon which there has been much controversy; that is, where a merchant is dealing with a bankrupt without knowledge of the latter’s insolvency, and in good faith gets payments on account from time to time within four months before the filing of the petition. In that sort of a case much controversy arose as to whether the merchant ought to be required to surrender the money he had received on account before he is permitted to prove up the balance of his claim against the estate. It has now been .settled that in such case the creditor (where he lacks knowledge of the insolvency) is not bound to surrender the payments thus made to him within four months. See Joseph Wild & Co. v. Provident Life & Trust Co. 214 U. S. 292, 53 L. ed. 1003, 29 Sup. Ct. Pep. 619 (decided as recently as May 24, 1909), where this doctrine is affirmed, and .where a reference is made to the other leading cases in the Supreme Court of the United States on that and cognate questions. See also pp. 787 and 788, 7th ed. (1909), Collier on Bankruptcy, and where it is shown that under the section of the bankrupt act in question, all attachments obtained against insolvents within four months previous to the date of the filing of the petition are dissolved.
Reference
- Full Case Name
- IN THE MATTER OF FRANCISCO PARDO, Bankrupt
- Status
- Published