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CODER V. ARTS, 213 U. S. 223 (1909)

U.S. Supreme Court

Coder v. Arts, 213 U.S. 223 (1909)

Coder v. Arts

No. 93

Argued January 26, 1909

Decided April 5, 1909

213 U.S. 223


Where a creditor presents a claim to the trustee joined with a statement that he has security upon the estate which it is his purpose to maintain and upon which he is entitled to priority, he institutes a proceeding in bankruptcy as distinguished from a controversy arising in the course of bankruptcy proceedings, and an appeal lies to the circuit court of appeals under § 25b, and the party aggrieved is not limited by § 24b to a petition for revision, and an appeal also lie to this Court, under the rules prescribed by it, if the amount involved exceeds $2,000 and the question involved is one which gives jurisdiction to this Court to review judgments of the state courts under § 709, Rev.Stat., or if a certificate of a justice of this Court is made as required by par. 2 of subd. b of § 25.

General Order of this Court, No. 36 in bankruptcy, which requires an appeal from a judgment of the circuit court of appeals to be taken within thirty days, and that the court from which the appeal lies to make findings of fact and conclusions of law within thirty days held to be complied with by the circuit court of appeals making findings within such thirty days, and directing them to be filed nunc pro tunc as of the day of entry of judgment, the appeal having also been taken within thirty days from such day of entry.

Where the claimant against a bankrupt's estate asserts a lien which would be defeated under the construction placed upon the Bankruptcy Act by the trustee, and the lien is allowed, a federal question is involved, which if involved in a case in the state court would give this Court jurisdiction to review the judgment under § 709, Rev.Stat., and the case is appealable from the circuit court of appeals to this Court under § 25b of the Bankruptcy Act.

On appeals from the circuit court of appeals under § 25b, this Court, under par. 3 of General Orders in Bankruptcy No. 36, can only look at the facts found by the circuit court of appeals.

An attempt to prefer is not necessarily an attempt to defraud, nor is a

Page 213 U. S. 224

preferential transfer always a fraudulent one. The question of fraud depend upon the motive, and in order to invalidate a conveyance as one made to hinder, delay or defraud creditors within the meaning of § 67e of the Bankruptcy Act actual fraud must be shown.

In this case, a mortgage given within four months of filing the petition to secure advance and while the mortgagee did not know of the mortgagor's insolvency, although the latter did, and which mortgage was found not to have been made with intent to hinder, delay or defraud creditors, held not to be voidable under § 67e of the Bankruptcy Law, and that the mortgagee was entitled to priority thereon, with interest.

152 F. 943 affirmed.

The facts, which involve the construction of certain provisions of the Bankruptcy Act, are stated in the opinion.

Page 213 U. S. 227

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