Rialto Publishing Company and Triad Newspapers, Inc. v. Irving I. Bass, Trustee in Bankruptcy of the Estate of McDaniel Markets, Bankrupt

On June 22,1961 both of the appellants, Triad Newspapers, Inc. and Rialto Publishing Company, filed actions in the Municipal Court of the San Bernardino County Judicial District, County of San Bernardino, California, against McDaniel’s Markets, a California corporation, to recover sums due appellants for antecedent advertising debts, and on that date attached cash at a McDaniel’si Markets store.

On July 14, 1961, appellant Triad obtained a default - judgment and levied execution against the attached cash, thereby receiving payment of $1,666.99 on its debt claim. On July 19, 1961, appellant Rialto received payment of $2,-550.05 on its debt claim by a like default judgment and writ of execution against the residue of the attached cash of McDaniel’s Markets.

Then followed on September 15, 1961 an involuntary bankruptcy petition with an adjudication of bankruptcy in due course against McDaniel’s Markets. Thereafter show cause orders against the appellants at the request of appellee Irving I. Bass, the trustee in bankruptcy, were timely issued and heard before the referee. Appellants consented to jurisdiction. The fact of insolvency of the debtor on June 22, 1961 was conceded by the…