Court Opinion

ID: 6642093
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:46:36.402649+00
Date Added: 2024-06-11T15:59:16.991702
License: Public Domain

FOX, District Judge.
A petition lias been presented by Wm. M. Price et als., creditors ■of Wm. F. Abbott-, praying that be may be adjudged a bankrupt; at tbe same time application was made for an injunction, to restrain tbe debtor and one Roscoe L. Bowers, wbo was charged with aiding tbe bankrupt in a fraudulent sale, concealment, and removal of bis property, from removing, disposing, or interfering with tbe property, until tbe further order of tbe court. Upon the affidavit of one Lothrup, tbe injunction was ordered. Tbe present motion is in behalf of Bowers to dissolve tbe injunction, and is sustained by bis own affidavit as- web as that of Abbott, and is approved by tbe affidavit of Mr. Eastman, a solicitor for tbe creditors. Tbe injunction was granted under the provisions of tbe 4th sec. of the bankrupt act, which authorizes the court, upon commencement of involuntary proceedings, "to restrain tbe debtor and any other person, from making any transfer or disposition or any part of tbe debtor’s property, not excepted by this act from the operation thereof, and from any interference therewith.” Some discussion was had at the bar as to the operation and extent of the provision, and whether it was applicable to property once belonging to the debtor, but of which it was claimed he had made a transfer in violation of the provisions of the bankrupt act. In my view, the provision is applicable to ab property, which under the act would vest in the assignee, and which it would be his duty to claim for the benefit of the estate; not only that in the actual possession of the debtor at the commencement of bankrupt proceedings, and to which his title is indisputable, but to ab other estate of which he has made any fraudulent transfer or concealment; and on the court being satisfied by prima facie proof that the property has been thus fraudulently transferred or concealed, the parties should be enjoined and restrained from any interference with it until the determination of the question of bankruptcy. On the affidavit of Lothrup a prima facie case was presented which justified the injunction as ordered by the court.
From the affidavits, it appears that Abbott has been for some years a cigar maker in Saco, pretty extensively engaged in the business, and as he states, without keeping proper books of account, so as to be fuby informed as to his standing and condition.
Abbott says that in January last he engaged Bowers to straighten out his affairs and keep his books; and for this purpose, an account of stock was taken and a nrw set of books opened by Bowers. Both swear that they bebeved Abbott was solvent. Bowers purchased from Abbott all the cigars he manufactured from April 10th, to Sept. 24th, 1S69. The whole amount sold by Abbott in 1869 being 932 M. Besides the sale of the cigars, Bowers claims that be tween May 13th, and Aug. 25th, Abbott consigned to him $10,073.44 of stock and pipes, on which he advanced $12,075.75. Abbott failed on or about Sept. 28th, owing $35,000, $25,115 of which was for stock and fixtures purchased since May 13th. His assets consisted of $500 of stock under attachment, and stock and fixtures sold Bowers Sept. 28th for $1,526, and notes amounting to $6,-000 or $8,000, of not much value.
The fairness and good faith of all these transactions between Bowers and Abbott are set forth repeatedly in the strongest language in their respective affidavits, and these averments have not escaped the attention of the court. A critical examination of Bowers’ dealings with Abbott, so far as they have seen proper to explain and develop them by their affidavits, does not satisfy me that it would be just towards the creditors to remove and dissolve the injunction. Much more light might and should have been thrown on their deabngs, and a more complete and satisfactory exposure of them could have been presented; but they have seen fit to deal in general denials and assertions, without going into a fair exhibit of the accounts, and purchases, and cost of the property thus acquired by Bowers. If i am in error then in any of my calculations or facts, it is rather owing to the darkness and uncertainty with which they have seen fit to obscure their dealings, than to any failure of investigation on my part, as I have twice carefully read over their affidavits in order to be fully conversant with their contents. The books of Abbott which are in the handwriting of Bowers, and wholly kept by him, have not been produced at the hearing, but although called for by the creditors’ attorney, have been kept back, Bowers contenting himself by stating in his supplemental affidavit that nothing appears therein inconsistent with his statements. Under the circumstances, it would have been altogether more satisfactory for the court to have ascertained this fact by a personal examination of the books, rather than from the statement of a party in interest whose relations are such with the debtor, that no doubt can be entertained that the books would have been present, if it had been thought for the interest of Bowers that they should have been produced. From their non-production under the circumstances, l cannot but conclude, that in some way they would have afforded evidence detrimental to these parties, and that for reason satisfactory to themselves they have seen fit to withhold them from the court. I think that matters should remain as they now are until an investigation can be had by an assignee.
Motion overruled.