United States Supreme Court Cases & Opinions

U.S. Supreme Court

United States v. Knight, 336 U.S. 505 (1949)

United States v. Knight

No. 406

Argued March 4, 1949

Decided April 4, 1949

336 U.S. 505

Syllabus

1. Respondent was indicted for aiding and abetting a trustee in bankruptcy to appropriate property of the bankruptcy estate in violation of the Bankruptcy Act, and for conspiring to do so. The case hinged on whether certain funds received by the trustee and his counsel, and for which they did not account, were funds of the estate or gifts by a third party from his own property. There was substantial evidence to support either view. The jury found respondent guilty, and he was sentenced to pay a fine. The Court of Appeals reversed his conviction and directed entry of a judgment of acquittal.

Held: the Court of Appeals' reversal was an improper interference with the jury function, and its judgment is reversed. Pp. 336 U. S. 506-509.

2. All of the consideration which is paid for a bankrupt's assets becomes part of the estate, and no device or arrangement, however subtle, can subtract or divert any of it. Pp. 336 U. S. 508-509.

3. A different result is not required in this case by the claim that the funds in question were paid by the purchaser of the assets at a time when the rights of creditors and stockholders in the estate had been fixed and all allowances had been determined. P. 336 U. S. 509.

169 F.2d 1001, reversed.

Respondent was convicted for aiding and abetting a violation of the Bankruptcy Act and for conspiracy. The Court of Appeals reversed. 169 F.2d 1001. This Court granted certiorari. 335 U.S. 901. Reversed, p. 336 U. S. 509.

Page 336 U. S. 506