Daily capital journal. (Salem, Oregon) 1903-1919, 1904-03-31
RECENT
BANKRUPTCY
DECISIONS
(oregon Law school Journal)

upon credit, storing the same In his
warehouse where he conducted his
bushes, arranges with a storage com.
pany, having no storehouse of its own
TO issue warehouse receipts to him for
property on his own premises, and ex.
ecutes a lease Of the premises to the
storage company, to continue so long
as he desires and without the payment
Of rent, and the bankrupt remains in
possession of the premises, treating
the property as his own, and no signs
on the exterior of the building indi.
Gates any ownership Of the storage
company, but small and obscure
signs placed on different floors OF the
building. most OF them hidden behind
the piles Of bags Of seeds, and upon
each pile for which warehouse re-
ceipts were Issued there was placed a
small tag, the arrangement must be
regarded not as warehousing Of prop
erty, but a mere subterfuge or device
70 enable the bankrupt to hypothe-
cate the warehouse receipts and so
to raise money upon secret liens, and
under the law of Illinois 1t was con
structively fraudulent as to the credi-
tors Of the warehouse receipts to bona
nde holders for value, even without
notice Of the fact, that the actual pos
session and control Of the property was
in the bankrupt, the transaction can
not be upheld as a valid pledge OF
the goods.
The decision Of the Fifth Circuit,
Court Of Appeals, in Beach v. Macon
Grocery Co, II Am B. r. 104, hold.
ing that where property is taken from
the possession Of one claiming TO be
the owner, without his consent, by a
receiver in bankruptcy under an er.
roneous order. which the cllmaut sue
cessfully resists on appeal, he is en-
titled TO a return of the property with
out charge OF any kind against either
II or him, is commendable both for its
good sense and sound law. See also
10 Am B. r. 1886.
In re Keet, II Am. B. r. III, 1t was
held that in the interest OF the gen
eral creditors, the bankruptcy court
In its discretion may order a sale OF
the bankrupt's real estate, free and
clear the liens, although the incum.
brances thereon equal the value Of the
property.
AS a case OF first impression Judge
Archibald. in Re Coddington Middle
District, Pal. II Am. b. R. 1872, has
been that where prior to bankruptcy
a debtor voluntarily transfers 10 an
other as a preference, goods which are
recovered back by the trustee and con-
verted into money, the bankrupt is not
entitled to his exemptions out of the
proceeds OF sale
Where II appears that on fling his
petition the bankrupt had SS4S.02 in
a bank account labelled as Manager"
but which he treated as his own prop.
Ferty, adding Unfortunately his own
and the money derived from real es-
tate Of an insurance company Of which
he was secretary and manager, paying
therefrom money for taxes and repairs
and his personal expenses, the trustee
Is entitled to an order requiring him
TO pay over S270 withdrawn and spent
for his private purpose since the M
ing of this petition in bankruptcy
In re Kurtz, IL Am, n r. 129.
Where the act Of bankruptcy charg
ed in an involuntary proceeding is a
transfer OF real estate by the alleged
bankrupt while insolyent TO his broth
or, who is averred TO be a creditor
with intent to prefer him to the other
creditors, and the weight OF evidence
upon an issue made by a denial Of the
commission OF the act OF bankruptcy
charged is decidedly with the bank
rupt, the testimony In support OF the
ayerment that the brother was a credi-
tor being insufficient and II not ap,
pearlng that the consideration paid
was not the fun value OF the property,
nor a mere device to give the trans
action a proper appearance, a finding
OF the refree that the brother vas a
creditor and the transfer preferential
must be reversed, with costs against
the petitioning creditors. In re Eos.
ter, II Am, b. r. 1871.
Where money due and owing to the
bankrupt at the time OF hllng his pc
ution Is thereafter received by him
and HONESTLY applied 10 the payment
OF a debt, he is not guilty, under sec
tion 2sh. OF knowingly and fraudulent
ly ~coneeAling while a bankrupt, prop
erty of his estate In bankruptcy, ever
ithrouah the rasult Of guch paymeni