Opinion
August 9, 1932.
C.C. Crockett, of Dublin, Ga., for Hyman Dunn and others.
G.C. Bidgood, of Dublin, Ga., for petitioning creditors.
Jones, Evins, Powers Jones and Ralph Williams, all of Atlanta, Ga., for Interstate Bond Co.
Burch Daley, of Dublin, Ga., for Laurens County.
W.W. Larsen, Jr., of Dublin, Ga., for the City of Dublin.
Jones, Johnston, Russell Sparks and Chas. M. Cork, all of Macon, Ga., for Trustees in Bankruptcy.
Hendrix Buchanan, of Atlanta, Ga., for appellee Viking Equipment Co.
M.H. Blackshear, of Dublin, Ga., for the bankrupt.
An involuntary petition in bankruptcy was brought against the Dublin Veneer Company. The alleged bankrupt denied insolvency. For reasons that then seemed satisfactory, receivers were appointed and directed to continue the operation of the business. The financial status of the business thus operated was not made clear until the final report, when it was disclosed that there had been a substantial loss. Up to that time neither the holders of the respective tax liens hereinafter mentioned nor the Viking Equipment Company were made parties, nor did any of them interpose objections to the continuance of the receivership. Upon the qualification of the trustee, by consent of all parties, the property here involved was sold free of liens and the respective liens or claims to priority attached to the money thus realized. There was turned over to the trustee by the receiver $2,701. The trustees have not sufficient funds with which to satisfy the tax liens, the lien of the Viking Equipment Company, and to pay the loss sustained in the operation of the receivers and the administration expenses.
Elaborate hearings were had by the referee and conspicuous ability and patience and thoroughness were displayed by him, and there is every evidence that the matters at issue, both as to fact and law, were ably presented by counsel. The referee decided that the order of payment should be: (1) Wages earned within three months of the date of the commencement of the proceedings; (2) insurance premiums; and (3) taxes, state, county, school, and city.
The taxes were abated, both because certain property, the reserve titles to which in the vendors were recognized as valid, was included in the tax assessment against the bankrupt, and to the additional extent to what it would cost to realize on such tax liens. It is understood there is no exception by the holders of the tax liens to such abatement. When therefore taxes are hereinafter referred to it will mean as thus abated.
The referee also decided that the sprinkler system, which was installed under a contract then held by the Viking Equipment Company reserving title in the vendor, was not of such value as to make any equity therein for the bankrupt estate, and therefore the trustees were ordered to disclaim title thereto.
One or more creditors of the receivers and trustees challenged the propriety of paying the wages or taxes ahead of their debts owing by the receivers and trustees, and the trustees challenged the order directing the relinquishment of the title to the sprinkler system.
There is a rule in this district fixing a time limit of fifteen days from the date of the order for petition for review of such order. Certain creditors other than those filing the petition, but with the same character of interest, invoked the privilege of being protected by any decision that this court might make. The propriety of granting such request is shown by the following cases: In re Jamison Bros. Co. (C.C.A.) 209 F. 541(2); In re Green River Jockey Club (D.C. Ky.) 5 F.2d 259; In re Flanders Company (Sixth C.C.A.) 32 F.2d 654; In re Handy-Andy Stores (D.C. La.) 51 F.2d 98, 106.
For the reason that the insurance was for the protection of all parties in interest, including lienors, and for the further reason that there is no attack made upon the judgment of the referee as to the payment of such premiums, such order will be considered as final and is not to be disturbed.
Findings of Fact.
Diligent study has been made of the voluminous record in this case, including the testimony that was given before the referee at the several hearings. By reason of the fact that there is no dispute as to the amount of the taxes and there is no need at this time to consider the detailed amount of indebtedness by the receivers and the trustees, it is unnecessary to make a finding as to them. The following facts are pertinent to the reserve title claim of the Viking Equipment Company:
(1) The president of the Dublin Veneer Company, C.T. Alexander, had full power to make contracts of purchase of machinery as well as other property for such company.
(2) In the matter of the purchase of machinery and such like it was customary for the president and also the secretary, P.W. Alexander, to sign the contract. In this case the president of the company, C.T. Alexander, after he had signed the contract, sent the secretary, P.W. Alexander, to have the contract signed before Mr. Grier, the notary public, and when the sprinkler system was received by the company it was known to the president that such contract had been executed by the secretary as well as by himself.
(3) The following is a copy of the execution of such contract and of the form of either attestation or acknowledgment or probate, as it may be construed, as appears thereon:
"Crawford Slaten Co, (Contractor)
"By W.B. Crawford, (President)
"By __________ (Secretary)
"In presence of { __________ { __________
"Dublin Veneer Co. (Owner)
"By C.T. Alexander, (President)
"By P.W. Alexander, (Secretary)
"In presence of { Bessie Stuckey. { __________."
On the back of this instrument were the printed forms above referred to, which were filled out and signed as follows:
"Owner's Affidavit.
"State of Georgia, County of Laurens.
"I, B.F. Grier, a notary public in and for the county and state aforesaid, do hereby certify that on the 6th day of December, 1928, there personally appeared before me P.W. Alexander, who is personally known to me to be the V-Pres. Secty. of Dublin Veneer Company, and being duly sworn, acknowledged that he signed and sealed the foregoing instrument as his free and voluntary act and as the free and voluntary act of said Dublin Veneer Company, that he has knowledge of the facts, and that the consideration for said instrument is actual and adequate and that it was given in good faith for the uses and purposes therein set forth.
"P.W. Alexander.
"In witness whereof I have hereunto set my hand and Notarial Seal the day and year first above written.
"B.F. Grier [Notarial Seal] "Notary Public.
"My Com. expires 4-8-30.
"Contractor's Affidavit.
"State of Georgia, County of Fulton.
"I, Wesley Lane, a notary public in and for the county and state aforesaid, do hereby certify that on the 18th day of February, 1929, there personally appeared before me W.B. Crawford, who is personally known to me and known to me to be the president of Crawford Slaten Co., and acknowledged that he signed and sealed the foregoing instrument as his free and voluntary act and as the free and voluntary act of said Crawford Slaten Co., for the uses and purposes therein set out."