Scheppke v. Rice

SPARKS, Circuit Judge.

This appeal involves the question as to the right of appellants, who were directors of a corporation which subsequently suspended business and filed a voluntary petition in bankruptcy, to preferences in the assets of the corporation. Appellee, the trustee for the Sparta Canning Company, filed a petition praying that the Referee in Bankruptcy order appellants to show cause why certain chattel mortgages alleged to constitute fraudulent preferences should not be cancelled and set aside, and appellants required to account for the proceeds received from the sale of the…