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The decision on that motion was based upon the case of In re Muncie Pulp Co., 139 Fed. 546, 71 C. C. A. 530, and another application has now been made, directed to the various stockholders and to the corporation, asking that the stock of that corporation be turned over to the trustee in bankruptcy as the property of the bankrupt estate, upon the theory that the original transfer by Mills of his property, in exchange for the stock of the corporation, was fraudulent and void ab initio. To this motion objection has been made by the various parties cited, as well as by the corporation, which still has some of the stock unissued in its treasury, claiming that the court has no jurisdiction to dispose of the issue involved; these parties in their answers claiming title to the stock in question and denying the necessary elements by which fraud could be proven.

Clifford D. Mills, personally, was the holder of 10 shares of stock, which have been turned over to the trustee in bankruptcy. His daughter, Dorothy M. Mills, was made the recipient of yo shares of stock, issued to Clifford D. Mills as trustee for her; she being an infant. Fifteen shares of stock were issued to one Potter, who had been superintendent for Mr. Mills for a considerable period, and who it is claimed by Mr. Mills had become entitled to some share in the business, which he had aided in building up, as well as being a man whom the corporation needed to keep interested in the business. Five shares of stock were transferred to one William W. Butcher for services, and subsequently sold by him to William H. Agard, who apparently gave a note therefor. This note, in some way, appears to have got into the possession of Mr. Mills, and he has destroyed the note, or has not called for its payment. This accounted for the 100 shares of stock issued by the corporation, referred to in its minutes as "fully paid up” stock, for which cash had been turned in.

The various respondents upon this motion have attempted to appear specially and to interpose only such statements or answers as would form a basis for their pleas that this court has no jurisdiction to determine the title to property in the possession of other parties claiming to be bona fide holders of title. Each of these parties has, however, presented an answer, by which certain facts are admitted, and as to which there can be no controversy, showing the situation as above.

The petition in bankruptcy was filed on the 26th day of August, 1909, and the corporation in question was formed and the shares of stock issued about the 5th day of March, 1909. It is apparent that the property in question is not in the possession of the trustee, and that this court has not jurisdiction to determine these questions of title, upon any theory that the stock is, at present, a part of the estate in the hands of the trustee. Nor do the admitted facts show conclusively a condition of affairs from which fraud must be inferred, and upon which the court or any one considering the transactions could assume the responsibility of concluding that the transactions were void, as has been held in the case of In re Friedman, 161 Fed. 260, 88 C. C. A. 306, affirming Id. (D. C.) 153 Fed. 939.

On the other hand, the actions of Mr. Mills weré valid and his transfers unassailable only in case he was solvent at the time, and if

his gift of assets to other parties would not work a fraud upon his creditors. No actual consideration passed either from Dorothy M. Mills nor from Mr. Potter in return for their stock. It was equivalent to a gift, and could not be valid, therefore, in the absence of consideration, unless Mills were in a position to make a gift of the sort in question. The stock issued to the attorney would be in a different class, and the transfer to him valid, if it had been retained. But the subsequent transaction between Mr. Agard and Mr. Mills in reference to the promissory note makes it possible that testimony would prove the transmission of these 5 shares of stock to be lawful only in case Mills had the right to make a transfer thereof without consideration. The 10 shares of stock issued to Mr. Mills himself are not involved, inasmuch as they are a part of his property and have been turned over.

The respondents have appeared specially to question jurisdiction, but have voluntarily filed answers which show the weakness of the claims of title, if Mills was not solvent at the time of transfer, or was rendered insolvent by the transfer. By these answers, the presumptive invalidity of their acquisitions of stock as against creditors, unless they can sustain the burden of proving the right on the part of Mr. Mills to cause the stock to be transferred to them at that time, has been brought to the attention of this court, and they have submitted to its jurisdiction, to the extent of submitting the question of jurisdiction to the determination of this court. But further complication is added by the fact that Dorothy M. Mills is an infant, and must be represented by some one capable of protecting her legal rights, and separated from her father's position as voluntary trustee of the shares of stock for her, while at the same time the bankrupt herein and the person from whom the property in question was acquired by her by gift.

Upon the entire situation it would seem that, inasmuch as more than four months elapsed between the date of issuing the stock in question and that of filing the petition in bankruptcy, inasmuch as various other transactions and many different events must be passed upon in determining whether the title of the holders of the stock is valid, and as that stock is in their possession under a claim of title, the issue should be determined in an action, rather than in a summary way by this court, even though there might be sufficient to hold the summary proceeding in this court upon the facts voluntarily presented by the answers above set forth. The trustee should bring his appropriate action, if the creditors so desire; but in the meantime he should be protected against further transfers of the stock in question, and the parties holding the same will be restrained from transferring or incumbering it, except after application to this court to modify that restraining order.


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(Circuit Court, E. D. Missouri, E, D. June 15, 1910.)

No. 5,824.

Plaintiff alleged the death of her decedent while working in the mill of defendant box company, a foreign corporation, owing to the latter's failure to provide a reasonably safe place for plaintiff to work, in that such company was required, but failed, to provide a guarded platform over its shaving pit, where plaintiff was required to go to open the pipes leading into it, and that while performing such work, and using a defective stick provided by defendant, deceased fell from the platform by reason of its unguarded condition, and lost his life. The petition alleged, also, that defendant K., a resident of the same state as plaintiff, was negligent in fail. ing to inspect the place and appliances, and discover and report any de fects found therein to defendant company. Held, that the box company and defendant K. were not jointly liable, but that there was a separable controversy between plaintiff and the box company, which was removable to the federal court.

[Ed. Note. For other cases, see Removal of Causes, Dec. Dig. § 49.*

Separable controversy as ground for removal of cause, see notes to Robbins v. Ellenbogen, 18 C. C. A. 86; Mecke v, Valleytown Mineral Co.,

35 C. C. A. 155.] Action by Mary Marach against the Columbia Box Company and another. On motion to remand. Denied.

John C. Robertson, for plaintiff.
Watts, Williams & Dines and Wm. R. Gentry, for defendants.

DYER, District Judge. The motion to remand in this case is based upon the proposition that the controversy is not wholly between citizens of different states. This raises the question as to whether the plaintiff has a joint cause of action against the two defendants. This must be determined by the averments in the plaintiff's petition.

The plaintiff is the widow of the deceased, who came to his death, it is alleged, by the negligence of the box company in failing to provide a reasonably safe place for the deceased to work in; that it "provided a short platform, consisting of boards placed upon girders; that said platform is about one foot or more wide and about six feet long; that said boards were on the day aforesaid not properly fastened, and said platform was wholly unguarded with a rail or fence, or anything whatever, for the protection of the person standing and working thereon"; that the box company was further negligent in failing to provide its system of "blowpipes” with proper and reasonably safe "shut-offs," and in providing a stick that was short and of rotten material, and not a reasonably safe appliance, and in maintaining and operating a system of “blowpipes” that were not safe, and the system was old, inadequate, and unsafe. The petition states that on the 28th day of July, 1909, the plaintiff was at work in a reasonably safe place in said factory, and that he was ordered and directed by the foreman of the defendant to go into the shavings pit and open up the pipes etc., and that such were

*For other cases see same topic & S NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

not his usual and ordinary duties in and about said factory; that while performing the work directed to him, and while standing upon said platform and using the stick so provided by defendant, and while standing upon said platform, which was on said day covered with shavings, the deceased fell from said platform by reason of its unguarded and unfenced condition, and by reason of his unsteady foundation on said platform, into the pit and lost his life.

It clearly appears from this petition that the plaintiff lost his life by falling from a platform which was unsafe for the purposes for which it was used, and that this platform had been erected there by the box company. The only allegation in the petition which tends in any way to make Krueger, the superintendent, responsible, is this: That he was"charged with the duty, among others, of providing and inspecting the place in which the deceased had to work, and the appliances with which he had to work; that said defendant Martin L. Krueger had entered upon the discharge of this among his other duties; and that said defendant Martin L. Krueger negligently failed to perform his duty of providing and continually Inspecting the place where deceased had to work, and the appliances with shich he had to work, and that by reason of his said negligence in this behalf, be is jointly liable," etc.

The duty of the master, to wit, the box company, to the deceased, to provide a reasonably safe place for men to work, is not to be questioned. The duty of Krueger, under his employment by the box company, was to inspect these places, and supposedly, if any defect was discovered, to report the same to the master. The failure to perform the duty imposed upon him by the master neither excused the master from providing a reasonably safe place for the deceased to work in, nor does it establish in any wise a joint liability of a master and servant to the plaintiff. If Krueger, superintendent for the defendant, was guilty of any negligence whatever, that negligence of the servant might be assigned as a cause of action against the master.

In my judgment the case was properly removed to this court, and the motion to remand will be denied.


(District Court, E. D. New York. May 25, 1910.) BANKRUPTCY (8 136*)/ASSETS/CONCEALMENT.

Facts held insufficient to explain a loss of assets by a bankrupt, and to justify the referee's order requiring the payment of a specified sum to the trustee as his assets.

(Ed. Note. For other cases, see Bankruptcy, Dec. Dig. $ 130.*] In the matter of Robert Greenberg & Bro., bankrupts. On petition to review the referee's order requiring the bankrupts to turn over to the trustee concealed assets. Affirmed.

Nathaniel Tonkin, for bankrupts. James, Schell & Elkus (Robert P. Levis, of counsel), for trustee. "Por other cases see same topic & S NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexen

CHATFIELD, District Judge. The referee, as special commissioner, reports that the bankrupts should turn over the sum of $2,022.89, which they have concealed and failed to account for, to the trustee. The property admitted by them to have been in their possession, over and above all liabilities, on the 1st day of March, 1908, amounted to $11,437.50, which, with the excess of liabilities over assets, as shown by the schedules, viz., $17,457.08, makes a total of $28,894.58 to be charged against the bankrupts. They are credited by the referee with certain items presented in the testimony to account for those sums. He accepts as credible the loss of $3,400 in conducting a store in Cortlandt street, New York, $13,934.09 on individual sales throughout their general business during the period in question, and $1,000, a wedding present given by Robert Greenberg to his sister (which he says represented money that she had earned in connection with the business), and other items, including the stock on hand at the time of bankruptcy.

The bankrupts also allege that the testimony shows, beyond the amounts credited by the referee, $500 expenses of the sister's wedding, $200 more estimated as lost in the Cortlandt street store, $1,031 paid to one Fox, who had been nominally a partner, $300 for business expenses during a period of three weeks not included by the referee, $200 more from losses on bad debts, and $462.40 additional, estimated value of stock; the referee having credited them in each instance with the minimum, instead of the maximum, as estimated by the bankrupts. These items, added together, would more than equal the amount of the deficit as found by the referee.

If any items are to be allowed at all, and if such ridiculous testimony as was given by these bankrupts in estimating their business losses is to be believed, there would seem to be no reason for disputing the statements of the bankrupts as to when they made the payments in question, and their maximum estimates of loss should be used, rather than the minimum estimates thereof.

It is impossible to explain the loss of goods in such wholesale manner, and such large items by ordinary expenses and mere shrinkage of business between March 1st and November 5th of the same year. Either the goods of the firm were secreted and disposed of in large quantities, or the firm had no such stock as they claimed when they attempted to show a surplus of over $11,000 in March, 1908. But, even if that be granted them, their business from that time until November shows no such depreciation as would cause a shrinkage to a point where their liabilities exceeded their assets by over $14,000; and if any satisfactory method of tracing the property, or of picking out the amount of assets which the bankrupts have not satisfactorily explained, had been presented, there would be abundant testimony upon which to base the referee's report.

Inasmuch, however, as the referee has found in favor of the bankrupts upon all the items of testimony, with the exception of the small ones above mentioned, and as he refuses to believe the same sort of statements as those previously made by them, it is difficult to see how he reached such a conclusion. Upon the entire matter, the

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