Opinion · Supreme Court of the United States

Moore v. Bay

52 S. Ct. 3

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1931-11-02
Topic
general

recognizing that the trustee is not limited to recovering a specific amount of debt of one creditor | observing that what is recovered for benefit of bankrupt's estate is to be distributed in equal parts among allowed unsecured claims that lack priority | observing that what is recovered for benefit of bankrupt’s estate is to be distributed in equal parts among allowed unsecured claims that lack priority | observing that what is recovered for benefit of bankrupt’s estate is to be distributed in equal parts among allowed unsecured claims that lack priority | holding, with respect to predecessors of section 544(b) claims, the trustee could recover on an avoided transfer for the estate’s creditors at large | holding, with respect to predecessors of section 544(b) claims, the trustee could recover on an avoided transfer for the estate’s creditors at large | holding the trustee may recover the entire value of the transfer, even if the creditor the trustee is using to establish standing is only owed a small portion of the value of the total transfer | finding a trustee’s authority to set aside a fraudulent conveyance broader than an individual creditor’s | allowing trustee to stand in shoes of creditor to recover entire fraudulent-conveyance amount for benefit of all creditors even though creditor who could have avoided it subsequently owed only fraction of original amount | a “transaction that is voidable by a single, actual unsecured creditor may be avoided in its entirety, regardless of the size of the creditor’s claim” | the right of the trustee to recover is dependent upon just one creditor with a cause of action and not dependent at all upon the size of that creditor’s claim against the debtor | “the Bankruptcy Act appears to us to imply very plainly, that what thus is recovered for the benefit of the estate is to be distributed in dividends of an equal percen-tum on all allowed claims, except such as have priority or are secured.” | excepting from this inclusive statement priority and secured claims

Citator

Cited by
140 opinions
MOOREv. BAY,284 U.S. 4(1931)
52 S.Ct. 3
MOORE, TRUSTEE IN BANKRUPTCY FOR THE ESTATE OF SASSARD KIMBALL, INC.,
BANKRUPT,v. BAY.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT.
No. 27.
Argued October 22, 1931.
Decided November 2, 1931.
1. The provisions of the Bankruptcy Act concerning liens are superior to state laws. P. 5. 2. In the administration of an estate in bankruptcy, a chattel mortgage which, under the state law, is bad as against creditors who were such at the date of the mortgage, or who became such between the date of the mortgage and the date on which it was recorded, should not be given priority over those who gave the bankrupt credit at a later date, after the mortgage was on record. Bankruptcy Act, §§ 70, 67, and 65.Id.45 F.2d 449, reversed.
CERTIORARI,283 U.S. 814, to review an affirmance of an order
of the District Court holding a chattel mortgage to be valid as
to creditors whose claims came into existence subsequently to its
recordation.
Mr. Thomas S. Tobin, with whomMessrs. Charles F. Hutchins,Frank C. Weller, andJames P. Keleherwere on the brief, for petitioner.Mr. Max Isaacalso appeared for petitioner.

No appearance for respondent.
MR. JUSTICE HOLMES delivered the opinion of the Court.
The bankrupt executed a mortgage of automobiles, furniture, show room and shop equipment that is admitted to be bad as against creditors who were such at the datePage 5of the mortgage and those who became such between the date of the mortgage and that on which it was recorded, there having been a failure to observe the requirements of the Civil Code of California, § 3440. The question raised is whether the mortgage is void also as against those who gave the bankrupt credit at a later date, after the mortgage was on record. The Circuit Court of Appeals affirmed an order of the District Judge giving the mortgage priority over the last creditors. Whether the Court was right must be decided by the Bankruptcy Act since it is superior to all state laws upon the subject.Globe Bankv.Martin,236 U.S. 288,298.

The trustee in bankruptcy gets the title to all property which has been transferred by the bankrupt in fraud of creditors, or which prior to the petition he could by any means have transferred, or which might have been levied upon and sold under judicial process against him. Act of July 1, 1898, c. 541, § 70; U.S. Code, Title 11, § 110. By § 67, Code, Title 11, § 107(a), claims which for want of record or for other reasons would not have been valid liens as against the claims of the creditors of the bankrupt shall not be liens against his estate. The rights of the trustee by subrogation are to be enforced for the benefit of the estate. The Circuit Courts of Appeals seem generally to agree, as the language of the Bankruptcy Act appears to us to imply very plainly, that what thus is recovered for the benefit of the estate is to be distributed in "dividends of an equal percentum on all allowed claims, except such as have priority or are secured." Bankruptcy Act, § 65, Code, Title 11, § 105.In reKohler, 159 F. 871.Mullenv.Warner,11 F.2d 62.Campbellv.Dalbey,23 F.2d 229.Cohenv.Schultz,43 F.2d 340.Globe Bankv.Martin,236 U.S. 288,305.Decree reversed.Page 6