Thompson v. Sunrise Coal Company's Trustee

204 S.W. 89, 181 Ky. 158, 1918 Ky. LEXIS 516
CourtCourt of Appeals of Kentucky
DecidedJune 18, 1918
StatusPublished
Cited by2 cases

This text of 204 S.W. 89 (Thompson v. Sunrise Coal Company's Trustee) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thompson v. Sunrise Coal Company's Trustee, 204 S.W. 89, 181 Ky. 158, 1918 Ky. LEXIS 516 (Ky. Ct. App. 1918).

Opinion

Opinion of the Court by

Judge Clarke

Affirming.

In April, 1912, the Sunrise Coal Company, a corporation, with its principal place of business in Dayton, Ohio, was adjudged a bankrupt by the United States District Court for the Southern District of Ohio, and appellee, William P. Pice, was elected trustee in bankruptcy for the company. Pursuant to an order of the court, the trustee, on April 30, 1913, sold and conveyed to appellant, Sallie J. Thompson, the mining properties of the bankrupt, located in Muhlenberg county, Kentucky, in consideration of $10,000.00, and the agreement on the part of appellant to pay sixty per centum of the costs of the • bankruptcy proceedings. Appellant had a first lien against the property of the bankrupt for $6,000.00, and this was credited upon the purchase price. She paid $500.00 in cash, and in addition executed and delivered to the trustee four notes: one for' $1,000.00, due in ninety days; one for $1,250.00, due in six months; one for $1,250.00, due in nine months; and one for $1,887.50, due in twelve months; and, to secure their payment, a lien was retained in the deed by the following clause thereof:

“A lien is hereby expressly retained, and reserved by the party of the first part upon all of the real property hereinabove described to secure the payment of four certain promissory notes this day executed by the said Sallie J. Thompson and James M. Thompson, and payable to the -order of said first party, one for the payment of one thousand dollars ($1,000.00), in ninety days from this date, one for the payment of twelve hundred fifty dollars ($1,250.00) in six months from this date, one for the payment of twelve hundred fifty dollars ($1,250.00) in nine months from this date, one for the payment of eighteen hundred eighty-seven and 50-100 dollars, in twelve months from this date, all with six per cent interest from date, said notes representing a part of the purchase [160]*160price of said property remaining unpaid, and it is further stipulated that in the event of default for thirty days after its maturity in the payment of any one of said notes, all thereof still unpaid shall at once become due and payable.”

The first three of these notes and a part of the last were paid by appellant. Upon her failure to fully discharge the last npte when due, the trustee, pursuant to an order of the court, in which the bankruptcy proceedings were pending, instituted this action in the Muhlenberg circuit court against appellant for the balance due on the $1,887.50 note, and to enforce the lien retained upon the land in the deed to her to secure its payment. Copies of the note sued on and the deed to appellee in which the lien was retained were filed with and made parts of the petition.

To this petition defendant, Sallie J. Thompson, filed a separate answer and counterclaim divided into three paragraphs, to each paragraph of which a demurrer was sustained, and upon her failure to amend within the time allowed by the court therefor, a judgment was entered in favor of the plaintiff for the balance due upon the note and ordering a sale of a sufficiency of the land conveyed to the defendant to satisfy the judgment, and from that judgment this appeal is prosecuted.

1. The first paragraph of the answer admits all the allegations of the petition with reference to the execution of the notes and deed and to the authority of the trustee, but denied that a lien was retained in the deed to defendant to secure the payment of the note sued on, or that the note was past due, or that it was a just demand or was executed as a part of the purchase price of the property conveyed to her, and also denied that “the original draft of said notes is filed herewith.”

This, it will be seen, is but a denial of the legal effect of the terms of the notes and deed, which defendant admitted were regularly executed, and is therefore no more than the pleader’s conclusion of the legal effect of such instruments, and that an erroneous conclusion. Hence, it is apparent that this paragraph did not state facts sufficient to constitute a defense to plaintiff’s cause of action.

2. In the second paragraph of her answer, defendant attempted to plead as a defense to the note sued on fraud in its execution. It is therein alleged that the de[161]*161fendant and all the other creditors in bankruptcy of said bankrupt, Sunrise Coal Company, agreed that she should pay sixty per cent of such costs of the bankruptcy, proceedings as were just and eqxiitable, due to be paid by her and that when she executed the $1,887.50 note sued on, it was represented to her by plaintiff and she thought and believed that the note represented sixty per cent of the amount of costs which she was justly and truly and equitably entitled to pay; that she executed the note in the belief that such representations were true, but that she has since discovered “and now charges that the plaintiff fraudulently conspired and acted in. collusion against her with certain other creditors of said bankrupt, Sunrise Coal Company, in accumulating costs in said bankruptcy proceedings in an effort to defraud this defendant out of her rights in said bankruptcy proceedings, and procured her to sign said .note for'$1,887.50 fraudulently and in collusion and that she never was and is not now justly or truly or equitably entitled to pay said amount of $1,887.50, or any part thereof exceeding the amount of $617.51, which she has paid.” She asked that plaintiff be reqxxired to file an itemized and properly authenticated statement of the costs in the bankruptcy proceedings in order that she might attack the same item by item, and to “show to this court that she was never and is not now justly or truly or equitably entitled to pay a greater amount of said costs than the sum of $617.51, already paid on said note of $1,887.50.”

. It will be noticed that she does not charge that sixty per cent of the costs, as allowed in the bankruptcy proceedings, did not amount to $1,887.50, but only that- plaintiff, in collusion with some of the other creditors, had fraudulently conspired “in accumulating costs” in said bankruptcy proceedings; that she was not justly, or truly, or equitably entitled to pay a greater amount of the costs than $617.51. It is therefore apparent that she does not charge that the costs, sixty per cent of which was $1,887.50, were not actxxally accxxmulated or allowed in the bankruptcy proceedings, but only that she was not justly, or truly or equitably entitled to pay sixty per cent of the amount allowed'in that court, and that she was, in fact, attempting to have reviewed in this action the taxation of costs in the bankruptcy proceedings to which she was a party. That she could not in this action have re[162]*162viewed and corrected, even if erroneous, the taxation of costs in the bankruptcy proceedings is too evident to admit of argument, because to do so would be a denial of the validity of the judgment of that court in a matter clearly within its jurisdiction. Hence, the second paragraph did not state facts constituting a defense to plaintiff’s cause of action.

3.

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Cite This Page — Counsel Stack

Bluebook (online)
204 S.W. 89, 181 Ky. 158, 1918 Ky. LEXIS 516, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thompson-v-sunrise-coal-companys-trustee-kyctapp-1918.