Everet L. Hagan v. George L. Gardner, Trustee in Bankruptcy of the Estate of Flintridge Heights, Inc., a Bankrupt Corporation

Proceeding in bankruptcy to “reclaim” the sum of $8,100.00 from the trustee.

On April 1, 1955, a former trustee in bankruptcy sold a tract of real property, an asset of the bankrupt estate, to Nay-lor, Byers & King for the sum of $128,-000.00, receiving in payment therefor $40,000.00 in cash and a note for $98,-000.00. This note was secured by a deed of trust on a portion of said real property. The purchasers having defaulted in payment of their note, foreclosure proceedings were instituted in November 1955, and on January 10, 1956, a decree of foreclosure was entered. On February 9, 1956, the property was sold at execution sale, pursuant to said foreclosure decree, at which time the property was bid in by the trustee for the sum of $25,000.00. A deficiency judgment was entered against Naylor in favor of the trustee for the sum of $77,-296.50. Prior to the institution of the foreclosure proceedings, Naylor, by way of grant deed, conveyed such real property to a corporation known as Flintridge Highlands, Inc. (not to be confused with bankrupt, Flintridge Heights, Inc.). Flintridge Highlands was not a party to the foreclosure proceedings. Said property was subject to statutory…