Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1905-09-11
Important Bankruptcy Case
Comes Up for Trial at Cedar
Rapids, Tomorrow
HISTORY OF CASE IN DETAIL
Attorneys for Farmers and Merchants
Bank Of Tama, Raise Now Issue in
tho Litigation Originating in Bank.
ruptoy of William e. Houk, For
merIy Grocery Dealer of Tama.
Special to Tlmes-Repupllcan.

Special to TlmeS-RepubllCan.
Tama, Sept II. - A bankruptcy
case OF considerable Importance. in
volving as 1t does, a new question In
bankruptcy law, will come up for con-
sideration In the United States district
court, before Judge Reed at Cedar
Rapids, Tuesday, September 18th. The
issues in the case will no doubt attract
considerable attention in the legal cir
cles of this and other states. The his
tory of the case and the new points in
volved are as follows, briefly told:
History of tho Case.
On January 14th, 1902, william T..
Houk, q grocery dealer of Tama, Iowa,
was adjudged u bankrupt, and on Jan-
uary 25th. 1902, he filed q schedule
OF his debts and all property owned
by him, from which 1t appeared that
he owed $s,913.72, and that he had no
property, except such as was exempt.
February 10th, 1902, Mr.. i. III. Arb, of
Tama, was elected trustee of the bank
rupt estate, and on the goth day Of
March, 1902, filed an application stat
ing that an examination Of the bank
rupt's affairs disclosed that the Farm
ers' and Merchants Bank Of Tama, Ia,
had within four months next preced-
ing the filing of the petition for bank
ruptcy, received from the bankrupt
Houk, large amount of money about
$1,000, and other property to the
amount Of about $1,000. And that the
trustee had commenced suit In the
district court of Tama county, Iowa,
to recover said money and property
alleging that it had been given by said
bankrupt and received by said bank,
''as preference" Whereupon the
referee In, bankruptcy, c.. j. Stevens
OF Montour. Iowa, issued an order ap-
proving the act of the trustee IN In
shutting said suit to recover the al
legged preference" and authorized the
employment Of counsel to prosecute
said suit in the Tama district court
The case came on for trial in the
Tama district court, in December, 1902.
before his honor, Judge G. w. Burn I
ham, and judgment rendered at the
conclusion of the case against the
said defendant, the Farmers and
Merchants bank, for the sum OF S3,-
1928, with interest, making q total
of $3,354.S9 and costs.
The bank appealed the case and the
supreme court affirmed the lower
courts decision against the bank. In
June, 1905, the bank paid the judge
ment and in July the referee called
a meeting Of the creditors for the pur-
pose of allowing claims, declaring and
directing final dividend, etc. In the
list of claims appeared the Farmers
and Merchants bank.
On July "a, 1905, the referee adjudg-
ed that a distribution for forty per
cent could be made to all creditors on
all claims proved and allowed to date
as shown by the list which was filed
with the trustee.
Tho Point in Question.
And now comes the point which Is
agitating and upon which Judge Reed
will pass. The new issue Is raised
by the attorneys for the bank, Messrs.
Willett & Willett, Of Tama, Iowa, bas-
ing their contention upon recent de-
cision of the United States supreme
court in the case of Keppel vs.. Tiffiny
(Ohio) Savings Bank, 1877 U. S.. p. b6,
decided April 8, 1905.
July IS, 1905, the trustee received
a notice from the attorneys for the
bank, Willett & Willett, that they had
decided to file claim for the r. &
M. Bank approximating the sum of
$1,000 against the bankrupt, Houk, es-
tate, claiming that under the recent
decision Of the U. S. court they had
a legal right to do so, and that they
were legally entitled to participate in
the distribution of the dividend, If the
claim was allowed. This action had
the effect Of preventing the trustee
from making any disbursement until
further instructions from the proper
tribunal. August 1, 1905, a claim
for $5,O66.51 in favor of the f. & M.
Bank was filed with the referee, where
upon that official notified the creditors
of the action, and that a meeting
would be held August q, 1905, for
the purpose of considering said claim
and hearing no objections to the al
lowance of same that might be made.
At the meeting August Fl, the at
torneys for the bank contended that
their client, the r. & M. Bank, had the