Connell v. Walker, 291 U.S. 1 (1934)

Connell v. Walker

No. 535

Submitted December 4, 1933
Decided January 8, 1934
291 U.S. 1

CERTIORARI TO THE SUPREME COURT OF NORTH DAKOTA

Syllabus

1. Under § 67(f) of the Bankruptcy Act, where an attachment of an insolvent’s property was obtained within four months prior to the filing of a petition in bankruptcy against him, the trustee has the election of preserving it for the benefit of the bankrupt estate; it is not void at the election of the bankrupt alone. Lehman, Stern & Co. v. Gumbel & Co., 236 U.S. 448; Chicago, B. & Q. R. Co. v. Hall, 229 U.S. 511, distinguished. P. 3.

2. A suit in a state court brought by a creditor of a bankrupt within four months prior to the filing of the bankruptcy petition, to set aside a fraudulent conveyance made by him more than four months prior to the petition, is not terminated by the mere existence of the bankruptcy proceeding, and the right of the creditor to maintain it under the state law is withdrawn only if the trustee elects under § 70(e) to prosecute it for the benefit of the bankrupt’s estate. P. 5.

3. The refusal of the state court to stay such a suit at the demand of the bankrupt upon the bare showing of the bankruptcy adjudication was not an abuse of the sound discretion permitted by § 11(a) of the Bankruptcy Act, assuming that section applicable. P. 5.

4. Assuming that § 11(a) does not apply under the circumstances of this case, but that the general scheme of the Act implies some duty of the state court to preserve the estate until the bankruptcy court had opportunity to assert its jurisdiction, still it has not been shown that such an opportunity has not been afforded. P. 6.

63 N.D. 622, 249 N.W. 726, affirmed.

Certiorari, 290 U.S. 620, to review the affirmance of a judgment in an attachment suit setting aside, as in fraud of creditors, a conveyance of the land attached, and directing a sale and application of the proceeds of sale to the plaintiff’s claim.