Housman v. Parmelee-Dohrmann Co.

HUNT, Circuit Judge (after stating the facts as above). It is well established that ordinarily where the alleged act of bankruptcy is that the creditor has made a general assignment, -those who have assented to the assignment cannot be parties to a petition to have the one who has made thb assignment declared a. bankrupt. The obvious reason .is that, by accepting the assignment, the signing creditors have released their claims against the assignor and in lieu thereof have accepted claims under the assignment, and therefore should not be permitted to rely upon the ground that the assignment they consented to and participated in is the sole act upon which the assignor • should be declared a bankrupt. But in Housman’s assignment the creditors agreed to accept the pro rata and to release the assignor with the reserved right that such agreement of acceptance and release should become inoperative and void at the option of. any of such creditors, if anything intervened to prevent the payment of the pro rata to the creditors, by act of any creditor of the'assignor. When Swift & Co., a bona fide creditor, who did not assent to the assignment and release, levied an attachment upon the funds in the hands of Boteler, assignee, any creditors who had signed the release could avail • themselves of the option reserved and treat the agreement of acceptance and release as inoperative and void. If there were any evidence of fraud or collusion, or that Housman was induced by deception or other improper means to execute the assignment with a view to having him commit an act of bankruptcy, the case would .he different. But, as found by the master, Housman voluntarily made the assignment containing the agreement, which, because of the levy, justified the 'action taken by the creditors. Moulton v. Coburn, 131 F. 201, 66 C. C. A. 90; Ex parte Potts, Fed. Cas. No. 11344. It is said that, by reason of the reservation excepting leases, leasehold interests, real estate, and oil interests, from the general transfer, the assignment is not a general one, and therefore, there was no act of bankruptcy by Housman. That question, however, was not presented, to the District Court nor to the master. On the contrary, it appears affirmatively that at the hearing before the master the parties regarded the assignment as a general one, and proceeded to try the single issue, whether the petitioning creditors who had signed the agreement were estopped from maintaining the petition to put Housman into bankruptcy. The question of insolvency was recognized by the parties as irrelevant (West Co. v. Lea, 174 U. S. 591, 19 S. Ct. 836, 43 L. Ed. 1098), and the issue narrowed as hereinabove indicated. Housman and the creditors having consistently treated the assignment as general, the District Court was right in confirming the report of the master. Lookout Bank v. Noe, 86 Tenn. 21, 5 S. W. 453. Decree affirmed.