Maurice Penn v. William R. Grant, Trustee in Bankruptcy of L. R. Mahan, Also Known as Lemuel Ross Mahan

This is a bankruptcy appeal. The sole question to be determined by this Court is whether the bankrupt was insolvent on or about September 16, 1953, the date a levy of attachment was issued out of the Municipal Court of the City of Los Angeles, State of California, as against certain real property belonging to the bankrupt. 11 U.S.C.A. § 107 , sub. a(1).

Appellant denied that bankrupt was insolvent on the date of the attachment contending that the bankrupt had a chose in action valued at $81,719.61, as against the Seaboard Finance Company, based on an action filed September 15, 1953, against such finance company for usury.

The Referee found that the alleged claim for usury in the sum of $81,719.61 was inchoate and uncertain in character and amount and had no appreciable value and concluded that the bankrupt was insolvent at the time the attachment in issue was levied.

Appellant argues that appellee failed to sustain the burden of proof of insolvency of the bankrupt on the date of the attachment. We disagree. Without the chose of action for usury the bankrupt was clearly insolvent on September 16, 1953. The suit as against the finance company sought treble damages and was still…