pepper
litton
argued
decided
december
heuser
norton
petitioner
henry
roberts
bristol
respondent
justice
douglas
delivered
opinion
case
presents
question
power
bankruptcy
disallow
either
secured
general
unsecured
claim
judgment
obtained
dominant
controlling
stockholder
bankrupt
corporation
alleged
salary
claims
judgment
district
disallowing
claim
reversed
circuit
appeals
granted
certiorari
apparent
restriction
imposed
decision
power
bankruptcy
disallow
subordinate
claims
exercise
broad
equitable
powers
findings
district
amply
supported
evidence
reveal
scheme
defraud
creditors
reminiscent
evils
eliz
designed
cope
use
family
corporation
dixie
splint
coal
company
respondent
dominant
controlling
stockholder
scheme
followed
ancient
pattern
pepper
petitioner
brought
suit
state
virginia
dixie
splint
coal
company
litton
respondent
accounting
royalties
due
pepper
lease
suit
pending
anticipation
pepper
recover
litton
caused
dixie
splint
coal
company
confess
judgment
litton
favor
amount
representing
alleged
accumulated
salary
claims
dating
back
least
five
years
done
smith
secretary
treasurer
dixie
splint
coal
company
according
district
employee
litton
subservient
latter
june
execution
issued
judgment
day
return
made
thereon
litton
waiting
outcome
pepper
suit
definitely
known
february
pepper
obtained
judgment
dixie
splint
coal
company
motion
company
execution
judgment
suspended
ninety
days
permit
appeal
defendant
suit
appeal
instead
march
execution
pepper
judgment
suspended
litton
caused
execution
issue
confessed
judgment
levy
made
thereunder
yet
litton
intention
trying
satisfy
confessed
judgment
corporation
became
necessary
using
shield
pepper
debt
thus
execution
levy
made
march
steps
taken
two
months
towards
sale
property
levy
made
may
pepper
caused
execution
issue
judgment
levy
made
june
latter
date
sheriff
seems
cooperating
litton
advertised
property
sale
litton
levy
made
previous
march
june
sale
held
litton
became
purchaser
property
sold
sum
next
step
fraudulent
scheme
formation
litton
corporations
dixie
beaver
coal
company
litton
transferred
property
acquired
execution
sale
valuation
paid
stock
new
company
september
third
step
litton
scheme
taken
date
dixie
splint
coal
company
pursuant
resolution
board
directors
passed
june
two
days
litton
execution
sale
filed
voluntary
petition
bankruptcy
step
according
findings
sole
purpose
avoiding
payment
pepper
debt
bankrupt
time
bank
deposit
accounts
receivable
good
cash
deposit
sufficient
pay
creditors
exception
pepper
litton
caused
voluntary
petition
filed
confident
confessed
judgment
cover
consume
remaining
assets
adjudication
followed
september
litton
next
step
scheme
defeat
pepper
claim
purchase
wage
claims
bankrupt
cause
manner
claims
withdrawn
done
according
district
pepper
might
made
appear
general
situation
designed
give
litton
decided
technical
advantage
shall
see
june
pepper
instituted
suit
virginia
state
litton
judgment
declared
void
june
day
following
sale
litton
execution
sheriff
instituted
interpleader
action
joining
litton
pepper
clinchfield
coal
corporation
alleging
inter
alia
corporation
prior
lien
property
sold
debt
litton
pepper
answered
admitting
prior
lien
corporation
pepper
answering
prejudice
rights
asserted
chancery
cause
litton
judgment
set
aside
july
order
interpleader
suit
entered
directing
payment
clinchfield
coal
corporation
thereafter
trustee
authority
bankruptcy
moved
state
set
aside
judgment
quash
execution
thereof
ground
judgment
void
since
confessed
manner
required
virginia
statute
concluded
litton
judgment
void
denied
motion
grounds
trustee
estopped
challenge
held
pepper
interpleader
suit
treated
fund
derived
execution
sale
litton
judgment
valid
consequently
elected
recognize
validity
judgment
since
litton
acquired
caused
withdrawn
remaining
claims
estate
trustee
suit
representing
pepper
therefore
since
pepper
estopped
trustee
appeal
judgment
affirmed
grounds
smith
litton
thereafter
question
allowance
litton
judgment
came
bankruptcy
exceptions
previously
made
pepper
concluded
decision
state
trustee
estopped
attack
litton
judgment
prevent
bankruptcy
considering
validity
therefore
reviewed
facts
concluded
litton
dixie
splint
coal
company
made
carefully
planned
attempt
avoid
payment
debt
litton
dixie
splint
coal
company
reality
alleged
salary
claims
underlying
litton
judgment
represent
debt
bankrupt
corporation
merely
bookkeeping
entries
double
purpose
lessening
income
taxes
enabling
litton
appear
creditor
corporation
case
became
financially
involved
accordingly
district
disallowed
litton
claim
either
secured
unsecured
claim
directed
trustee
recover
benefit
estate
property
value
litton
purchased
execution
sale
june
appeal
circuit
appeals
reversed
judgment
holding
decision
state
res
judicata
bankruptcy
proceedings
think
circuit
appeals
error
reversing
judgment
district
first
place
res
judicata
prevent
district
examining
litton
judgment
disallowing
subordinating
claim
claim
attacked
bankruptcy
litton
show
proceeding
state
anything
proceeding
virginia
practice
set
aside
judgment
favor
ground
irregular
void
upon
face
failed
show
judgment
state
conclusive
favor
validity
priority
underlying
claim
respects
creditors
bankrupt
duty
incumbent
pleadings
state
validity
underlying
claim
issue
presented
state
question
whether
litton
judgment
might
subordinated
claims
creditors
upon
equitable
principles
motion
proceeding
based
challenged
litton
judgment
one
ground
void
ab
initio
confessed
dixie
splint
coal
company
manner
required
virginia
statute
smith
either
implied
express
power
confess
words
state
pleadings
practice
decree
asked
given
plaintiff
favor
cancellation
judgment
record
obligation
bankrupt
therefore
plain
issue
bankruptcy
later
considered
issue
trial
cause
state
adjudicated
hence
failure
part
litton
establish
state
judgment
res
judicata
plus
submission
judgment
bankruptcy
allowance
preferred
claim
extent
secured
alleged
lien
common
claim
respects
deficiency
plainly
left
bankruptcy
full
authority
follow
course
took
determine
validity
litton
alleged
secured
claim
priority
accorded
distribution
bankrupt
estate
second
place
even
though
assume
alleged
salary
claim
litton
judgment
based
fictitious
actually
existed
opinion
district
properly
disallowed
subordinated
courts
bankruptcy
constituted
bankruptcy
act
stat
latter
section
invested
jurisdiction
law
equity
enable
exercise
original
jurisdiction
bankruptcy
proceedings
consequently
held
many
purposes
bankruptcy
essentially
courts
equity
proceedings
inherently
proceedings
equity
local
loan
hunt
virtue
bankruptcy
equity
least
sense
exercise
jurisdiction
conferred
upon
act
applies
principles
rules
equity
jurisprudence
larson
first
state
bank
vienna
among
granted
powers
allowance
disallowance
claims
collection
distribution
estates
bankrupts
determination
controversies
relation
thereto
rejection
whole
part
equities
case
claims
previously
allowed
entering
judgments
may
necessary
enforcement
provisions
act
respects
jurisdiction
bankruptcy
exclusive
courts
fidelity
guaranty
company
bray
bankruptcy
courts
exercised
equitable
powers
passing
wide
range
problems
arising
administration
bankrupt
estates
invoked
end
fraud
prevail
substance
give
way
form
technical
considerations
prevent
substantial
justice
done
reason
express
provisions
equitable
powers
exercised
allowance
claims
conclusion
fortified
sub
sub
certainly
provided
latter
section
claim
allowed
may
later
whole
part
according
equities
case
disallowance
subordination
light
equitable
considerations
may
originally
made
hence
held
bankruptcy
full
power
inquire
validity
claim
asserted
estate
disallow
ascertained
without
lawful
existence
lesser
gray
mere
fact
claim
reduced
judgment
prevent
inquiry
merger
claim
judgment
change
nature
far
provability
concerned
boynton
ball
may
look
behind
judgment
determine
essential
nature
liability
purposes
proof
allowance
wetmore
markoe
may
ascertain
validity
liens
marshal
control
enforcement
liquidation
isaacs
hobbs
tie
timber
company
bankruptcy
trustee
may
collaterally
attack
judgment
offered
claim
estate
purpose
showing
obtained
collusion
parties
founded
upon
real
debt
equitable
power
also
exists
passing
claims
presented
officer
director
stockholder
bankruptcy
proceedings
corporation
mere
fact
officer
director
stockholder
claim
bankrupt
corporation
reduced
claim
judgment
mean
bankruptcy
must
accord
pari
passu
treatment
claims
creditors
disallowance
subordination
may
necessitated
certain
cardinal
principles
equity
jurisprudence
director
fiduciary
oil
company
marbury
dominant
controlling
stockholder
group
stockholders
southern
pacific
company
bogert
powers
powers
trust
see
jackson
ludeling
wall
dealings
corporation
subjected
rigorous
scrutiny
contracts
engagements
corporation
challenged
burden
director
stockholder
prove
good
faith
transaction
also
show
inherent
fairness
viewpoint
corporation
interested
therein
geddes
anaconda
copper
mining
company
essence
test
whether
circumstances
transaction
carries
earmarks
arm
length
bargain
equity
set
aside
normally
fiduciary
obligation
enforceable
directly
corporation
stockholder
derivative
event
bankruptcy
corporation
enforceable
trustee
standard
fiduciary
obligation
designed
protection
entire
community
interests
well
stockholders
said
bankruptcy
passing
allowance
claims
sits
equity
hence
rules
governing
fiduciary
responsibilities
directors
stockholders
come
play
allowance
claims
bankruptcy
exercise
ble
jurisdiction
bankruptcy
power
sift
circumstances
surrounding
claim
see
injustice
unfairness
done
administration
bankrupt
estate
duty
especially
clear
claim
seeking
allowance
accrues
benefit
officer
director
stockholder
clearly
power
duty
bankruptcy
courts
reorganization
sections
taylor
standard
gas
electric
held
claim
standard
subsidiary
admittedly
claim
due
owing
allowed
participate
reorganization
plan
subsidiary
subordination
preferred
stock
subsidiary
based
equities
history
spoliation
mismanagement
faithless
stewardship
affairs
subsidiary
standard
detriment
public
investors
similar
results
properly
reached
ordinary
bankruptcy
proceedings
thus
salary
claims
officers
directors
stockholders
bankruptcy
family
corporations
disallowed
subordinated
courts
satisfied
allowance
claims
fair
equitable
creditors
result
may
reached
even
though
salary
claim
reduced
judgment
reached
claim
asserted
void
voidable
vote
interested
director
stockholder
helped
bring
history
corporation
shows
dominancy
exploitation
part
claimant
also
reached
facts
bankrupt
used
merely
corporate
pocket
dominant
stockholder
disregard
substance
form
corporate
management
treated
affairs
loans
advances
dominant
controlling
stockholder
subordinated
claims
tors
thus
treated
effect
capital
contributions
stockholder
foregoing
types
situations
also
capital
purely
nominal
capital
necessary
scope
magnitude
operations
company
furnished
stockholder
loan
though
disallowance
claims
ordered
fictitious
cases
turn
existence
existence
debt
rather
involve
simply
question
order
payment
times
equity
ordered
disallowance
subordination
disregarding
corporate
entity
say
treated
simply
part
stockholder
enterprise
consistently
course
conduct
stockholder
situation
well
others
referred
sufficient
consideration
may
simply
violation
rules
fair
play
good
conscience
claimant
breach
fiduciary
standards
conduct
owes
corporation
stockholders
creditors
fiduciary
position
serve
first
cestuis
second
manipulate
affairs
corporation
detriment
disregard
standards
common
decency
honesty
intervention
corporate
entity
violate
ancient
precept
serving
two
masters
use
corporate
device
avail
privileges
normally
permitted
outsiders
race
creditors
utilize
inside
information
strategic
position
preferment
violate
rules
fair
play
indirectly
corporation
directly
use
power
personal
advantage
detriment
stockholders
creditors
matter
absolute
terms
power
may
matter
meticulous
satisfy
technical
requirements
power
times
subject
equitable
limitation
may
exercised
aggrandisement
preference
advantage
fiduciary
exclusion
detriment
cestuis
violation
principles
equity
undo
wrong
intervene
prevent
consummation
test
action
district
disallowing
subordinating
litton
claim
clearly
correct
litton
allowed
salary
claims
lie
dormant
years
sought
enforce
debtor
corporation
financial
difficulty
used
rights
another
creditor
impaired
litton
insider
utilized
strategic
position
preferment
damage
pepper
litton
dominant
influence
dixie
splint
coal
company
used
power
deal
fairly
creditors
company
manipulate
affairs
manner
one
creditors
came
collect
debt
bulk
assets
disappeared
another
litton
company
litton
though
fiduciary
enabled
astute
legal
manoeuvering
acquire
assets
bankrupt
cash
consideration
value
creditors
bookkeeping
entries
representing
best
merely
litton
appraisal
worth
litton
services
years
alone
sufficient
basis
exercise
district
equitable
powers
disallowing
litton
claim
added
existence
fraudulent
scheme
found
district
necessity
equitable
relief
fraud
becomes
insistent
matter
technically
legal
step
scheme
may
basic
nature
uncovered
duty
bankruptcy
exercise
equity
jurisdiction
undo
otherwise
fiduciary
duties
dominant
management
stockholders
go
naught
exploitation
become
substitute
justice
equity
perverted
instrument
approving
designed
thwart
fact
litton
perfected
lien
four
months
preceding
bankruptcy
obstacle
equitable
relief
first
place
lien
step
general
fraudulent
plan
must
viewed
entirety
subsequent
sale
taken
isolated
step
unconnected
long
antecedent
events
designed
defeat
creditors
buffum
trustee
bankruptcy
peter
barceloux
second
place
litton
seeking
approval
bankruptcy
claim
four
months
provision
bankruptcy
act
certainly
statutory
limitation
equitable
defenses
arising
breach
fiduciary
duties
seeks
allowance
claim
view
considerations
occasion
determine
legitimacy
corporation
bulwark
claims
creditors
accordingly
judgment
circuit
appeals
reversed
district
affirmed
reversed
footnotes
litigation
pepper
plaintiff
died
suit
continued
name
jean
mcneil
pepper
executrix
plaintiff
however
appeal
certain
phases
case
see
pepper
dixie
splint
coal
company
resolution
board
directors
new
company
certified
opinion
property
owned
dixie
splint
coal
company
owned
scott
litton
worth
current
money
fix
value
sum
paid
stock
first
meeting
creditors
held
september
strategic
position
litton
improved
two
events
later
district
quite
properly
denounced
first
place
smith
secretary
treasurer
dixie
splint
coal
company
one
caused
entry
litton
judgment
june
confession
company
elected
trustee
second
place
smith
authorized
employ
fact
employ
attorney
trustee
one
quillen
quillen
firm
attorney
dixie
splint
coal
company
firm
prepared
filed
petition
bankruptcy
company
appeared
first
meeting
creditors
counsel
bankrupt
yet
time
attorney
litton
filed
claim
litton
preferred
secured
claim
time
appointments
made
controversy
pepper
litton
latter
judgment
known
recognized
although
formal
proof
pepper
claim
filed
november
grave
impropriety
appointments
became
striking
administration
estate
commenced
october
pepper
moved
state
action
quash
execution
issued
outstanding
litton
judgment
quillen
attorney
bankruptcy
trustee
appeared
opposition
motion
acting
attorney
litton
contended
intervention
bankruptcy
deprived
state
jurisdiction
state
reserved
decision
october
pepper
petitioned
referee
direct
trustee
contest
litton
judgment
state
proceeding
quillen
stating
acted
attorney
litton
opposed
petition
delay
new
counsel
trustee
obtained
soon
asked
authority
institute
new
independent
suit
state
litton
judgment
declared
void
authority
granted
district
though
condemning
steps
stated
suggest
smith
quillen
acting
fraudulent
plan
intention
utilizing
positions
aid
litton
detriment
estate
yet
denounced
impropriety
conduct
emphasized
incompatible
conflicting
positions
persons
occupied
professional
ethics
conduct
quillen
district
aptly
observed
generally
accepted
attorney
bankrupt
chosen
attorney
trustee
case
even
evident
attorney
represents
creditor
whose
claim
attack
chosen
attorney
trustee
behalf
creditors
charged
duty
making
attack
conclusion
based
history
nature
claims
salary
litton
alleged
claim
represented
owed
litton
owed
smith
latter
assigned
litton
considerations
litton
unable
recall
noted
claims
date
back
number
years
regular
salaries
paid
litton
smith
entered
corporation
books
account
salary
claims
question
carried
separate
accounts
sums
paid
smith
personal
account
district
concluded
hard
believe
smith
bookkeeper
clerk
paid
year
change
nature
work
receive
sudden
increase
salary
year
except
upon
understanding
merely
record
purposes
paid
conclusion
strengthened
fact
accumulated
five
years
effort
smith
part
collect
fact
shortly
bankruptcy
assigned
claim
litton
nominal
consideration
alleged
owed
litton
likewise
concluded
entered
books
income
tax
purposes
fide
obligation
company
furthermore
substantial
part
claims
barred
statute
limitations
tolerant
assumption
made
according
salaries
credited
litton
smith
merely
contingent
conditional
obligations
provable
since
intended
paid
whenever
profits
company
permitted
hence
fixed
liabilities
absolutely
owing
see
sub
sub
noted
authority
conclusion
trustee
necessarily
precluded
questioning
judgment
bankruptcy
proceedings
merely
attacked
state
proceeding
state
pass
upon
validity
underlying
claim
james
brady
foundry
gilbert
collier
bankruptcy
ed
section
sections
cited
time
bankruptcy
case
amendments
made
chandler
act
stat
approved
june
material
far
issues
involved
concerned
section
section
sub
sub
section
thus
bankruptcy
held
jurisdiction
supplemental
ancillary
bill
enjoin
creditor
adjudication
discharge
bankrupt
prosecuting
claim
state
local
loan
hunt
supra
equity
held
power
protect
bankrupt
estate
fraudulent
assessment
cross
georgia
iron
coal
compel
execution
deed
make
bankrupt
equitable
title
complete
legal
title
dearborn
electric
light
power
jones
recover
assets
estate
used
pay
dividends
composition
order
later
reversed
lilyknit
silk
underwear
even
though
act
provides
claims
shall
proved
bankrupt
estate
subsequent
six
months
adjudication
bankruptcy
exercise
equitable
jurisdiction
power
permit
claims
proved
thereafter
order
prevent
fraud
injustice
williams
rice
pierson
larson
first
state
bank
supra
burton
coal
franklin
coal
section
sub
provides
allowed
may
reconsidered
cause
reallowed
rejected
whole
part
according
equities
case
estate
closed
chandler
thompson
thompson
continental
engine
course
absence
plea
res
judicata
said
oil
company
marbury
supra
page
lender
director
charged
others
control
management
affairs
corporation
representing
regard
aggregated
interest
stockholders
obligation
becomes
party
contract
company
candor
fair
dealing
increased
precise
degree
representative
character
given
power
control
derived
confidence
reposed
stockholders
appointed
agent
sole
director
one
smaller
number
vested
certain
powers
obligation
still
stronger
acts
subject
severe
scrutiny
validity
determined
rigid
principles
morality
freedom
motives
selfishness
converse
shoe
machinery
mass
davenport
dows
wall
also
clear
breach
fiduciary
duty
may
also
give
rise
direct
actions
stockholders
right
strong
repide
cf
green
victor
talking
machine
section
sub
sub
manning
campbell
mass
stephan
merchants
collateral
dean
shingle
cal
see
wyman
bowman
burnes
burnes
texas
auto
arbetter
mccandless
furlaud
jackson
ludeling
supra
wall
pages
et
thus
national
cash
register
dallen
bankrupt
prior
bankruptcy
turned
petitioner
old
cash
register
credit
account
purchase
new
one
pending
delivery
new
machine
petitioner
loaned
bankrupt
another
one
bankruptcy
adjudication
sought
reclaim
loaned
machine
affirmed
order
district
allowing
reclamation
condition
petitioner
first
deliver
bankrupt
old
machine
pay
amount
agreed
value
said
page
think
necessary
determine
whether
contract
purchase
new
cash
register
amounted
bailment
lease
conditional
sale
bankruptcy
courts
may
apply
rules
regulating
equitable
actions
burntside
lodge
case
said
page
relations
stockholder
corporation
public
require
good
faith
fair
dealing
every
transaction
stockholder
corporation
may
injuriously
affect
rights
creditors
general
public
careful
examination
made
transactions
interests
creditors
business
incorporated
cooks
conducted
enterprise
personally
allowed
compensation
services
event
bankruptcy
cogent
reason
paid
service
rendered
officer
manager
corporation
creation
serve
interests
allow
claims
circumstances
effect
permit
bankrupts
collect
claims
bankrupt
estate
give
effect
form
rather
substance
letter
law
rather
spirit
purpose
orchard
mccarthy
portable
elevator
affirmed
chas
horton
kentucky
wagon
mfg
forbush
bartley
clere
clothing
union
trust
savings
bank
albert
richards
mayfair
mass
cf
erickson
minnesota
ontario
power
oriental
investment
barclay
joseph
foard
state
maryland
new
york
trust
leland
island
oil
transport
hicks
son
see
comment
yale
journ
otsego
waxed
paper
said
page
applicable
principle
corporation
organized
controlled
make
mere
instrumentality
adjunct
another
subsidiary
becomes
bankrupt
parent
corporation
claim
paid
claims
first
satisfied
see
also
hunter
baker
motor
vehicle
henry
dolley
result
reached
equity
receiverships
central
vermont
ry
southern
new
england
corporation
affirmed
centmont
marsch
fortiori
result
reached
fraudulent
purpose
gray
meehan
see
alexander
theleman
point
district
said
examination
facts
disclosed
shows
history
deliberate
carefully
planned
attempt
part
scott
litton
dixie
splint
coal
company
avoid
payment
debt
speak
litton
dixie
splint
coal
company
reality
experience
law
never
prolific
breeder
fraud
corporation
favorite
device
escape
personal
liability
case
illustrates
another
frequent
use
fiction
corporate
entity
whereby
owner
corporation
complete
control
undertakes
gather
assets
exclusion
creditors