William R. Day

“ We are of opinion that he thus instituted a proceeding in bankruptcy as distinguished from a controversy arising in the course of bankruptcy proceedings. This being the character of the proceeding, its subsequent disposition and the appropriate appellate jurisdiction are to be determined by the provisions of the bankruptcy act governing bankruptcy proceedings.
It is true that Arts asserted both a debt and a lien to secure the same. ”

“ The giving of the mortgage of May 2, 1904, to Arts, did not, as a matter of law, constitute any evidence of any intent on the part of the bankrupt to hinder, delay, or defraud other creditors within the meaning of § 67e, notwithstanding the fact that its necessary effect was to hinder and delay other creditors, and to deprive them of an opportunity they might otherwise have had to collect larger portions of their claims. ”

“ The same terms are used in § 3, subdivision 1, in which it is made an act of bankruptcy to transfer property with intent to hinder, delay, or defraud creditors. Such transfers have been held to be only those which are actually fraudulent. ”

“ Cas. 789, intervene in the bankruptcy proceedings for the purpose of asserting an independent and superior title to the property held by the trustees, claiming the right to recover the property and to remove it from the jurisdiction of the bankruptcy court as a part of the estate to be administered. Arts appeared in the bankruptcy court, recognizing the title and possession of the trustee in bankruptcy, asserted his claim upon the notes, and his right to have the assets so administered and paid as to recognize the validity of the lien for the security for his claim. ”

“ Armstrong had the reputation of being one of the wealthiest men in Carroll county and no security had been required of or given by him to Arts until May 2, 1904, when he gave a mortgage on 2,360 acres of his land in Carroll county to secure the payment of $98,503.32, evidenced by his notes, and this mortgage was recorded on May 3, 1904. ”

“ The general order in bankruptcy No. 36 (18 Sup. Ct. ix) , provides that appeals under the act from the circuit court of appeals to this court shall be taken within thirty days after the judgment or decree, and that in every such case 'the court from which the appeal lies shall, at or before the time of entering its judgment or decree, make and file a finding of the facts, and its conclusions of law thereon, stated separately ”

“ In § 60 merely preferential transfers are defined, and the terms on which they may be set aside are provided; in 67e, transfers fraudulent under the well-recognized principles of the common law and the statute of Elizabeth are invalidated. ”

“ Arts
Argued: January 26, 1909. --- Decided: April 5, 1909
Alexander Armstrong, upon a petition in voluntary bankruptcy, was adjudicated a bankrupt by the United States district court for the southern district of Iowa on August 6, 1904. Josiah Coder, appellant, was duly elected and qualified as trustee. On August 26, 1904, William Arts, appellee, filed a claim for $104,880.46 against the bankrupt estate on certain promissory notes, to wit, one in the sum of $2,700, dated May 19, 1900, due May 19, 1901 ”