Carey v. Donohue, 240 U.S. 430 (1916)

APPEAL FROM THE CIRCUIT COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

The reference to the requirement for record in § 60 of the Bankruptcy Act is not to a requirement for the protection of bona fide purchasers without notice and who are outside the purview of the act, but to a requirement of record for protection of creditors and persons interested in the bankrupt’s estate and in whose behalf or place the trustee is entitled to act, and where there is no such requirement and the transfer was made more than four months before the filing of the petition, there can be no recovery under § 60.

A provision in a state statute that instruments conveying real estate shall, until filed for record, be deemed fraudulent only so far as relates to subsequent bona fide purchasers without knowledge or notice, as in § 8543, General Code of Ohio, is not a requirement that the instrument be recorded within the meaning of § 60 of the Bankruptcy Act.

The amendment of February 5, 1903, to § 60 of the Bankruptcy Act as finally enacted did not make § 60 so conform to § 3b that the same rule was established for computing the time within which a petition might be filed after a transfer giving a preference, and the time within which, under § 60, the trustee might commence an action to recover property preferentially transferred.

The legislative history of the amendment of February 5, 1903, shows that Congress, by the final omission of the provision in regard to possession, originally included in the bill as it passed the House of Representatives but struck out in the Senate, deliberately refused to make such conformity, and the courts cannot supply by construction that which Congress has clearly shown its intention to omit.

213 F. 1021 reversed.

The facts, which involve the construction and application of § 60 of the Bankruptcy Act and the validity of a judgment setting aside transfers made more than four months before the petition, are stated in the opinion.