Sampson v. Boysen

BARNARD, P. J.

The bankrupt, Berg, operated a restaurant in San Diego under the name of Berg’s Cafe. On September 1, 1933, he sold a half interest in this restaurant, including a half interest in certain fixtures and equipment which are involved herein, to the appellant in this action. He.

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was heavily indebted at the time and no notice was given in accordance with section 3440 of the Civil Code. Other fixtures were added and improvements were made with money furnished by the appellant and the restaurant business was continued without changing its name.

About three months later Berg was adjudicated a voluntary bankrupt and the respondent, as receiver, took charge of the equipment in the restaurant. Shortly thereafter the appellant appeared before the referee in bankruptcy and requested that all of the restaurant property be turned over to him as a nonbankrupt partner, in accordance with section 23, subdivision (h), U. S. C. A., Bankruptcy, title 11. The referee ordered the property delivered to this appellant in accordance with said section and at the same time gave permission to the respondent, as trustee of the bankrupt estate of Berg, to bring a suit in the state court for the purpose of determining what title the appellant had in the property here in question. The appellant proceeded to sell the fixtures and equipment of the restaurant, including the portion here involved, a half interest in which had been sold to him by Berg without notice and the other half of which Berg had contributed to the partnership business. This action -was brought to recover the value of that portion of the fixtures which had been owned by Berg prior to September 1, 1933, and a half interest in which had been sold to the appellant. The court found for the respondent, finding the value of this portion of the fixtures to be $300, and entered judgment for that amount. This appeal followed.

It is first contended that the state court was without jurisdiction to try this action and that the bankruptcy court, having taken possession of the property through a receiver, had sole and exclusive jurisdiction over any question of title or adverse claim to the property involved. The appellant relies upon certain cases in which it has been held that where a court of bankruptcy, through its officers, takes possession of property which is then in the possession of the bankrupt, it has jurisdiction to hear and determine the adverse claims of other parties and its possession cannot be disturbed by the process of another court. In such eases the property in question was in the exclusive possession of the bankrupt at the time it was taken over by the officers of the bankruptcy court.