259 Mass. 181 | Mass. | 1927
This is an action of contract in which the plaintiff, as trustee in bankruptcy of Charles Ponzi, seeks to recover from the defendant, with which Ponzi had a deposit account in the sum of $11,793.04, the amount of two checks alleged to have been paid by the defendant after the filing on August 9, 1920, at 1:40 p.m. of an involuntary petition in bankruptcy against Ponzi. On August 12, 1920, an application for receiver was filed and on August 19 receivers were appointed. On October 25, 1920, an adjudication of bankruptcy was entered.
The first check, for $5,000, was received by the defendant by mail on the morning of August 9, 1920. It was drawn on the defendant by Ponzi and sent by the payee, the Hanover Trust Company, to the defendant for payment. On the same date, the defendant’s treasurer, one Eaton, drew its own check for $5,000 on the Fourth Atlantic National Bank, payable to the order of the Hanover Trust Company, sent it to that company by mail, and charged the amount thereof against Ponzi’s deposit. The check was received by the payee on August 10; it was presented to the Fourth Atlantic National Bank on the morning of the following day and was paid by it and charged against the defendant’s deposit account.
The second check, for $6,700, was dated August 11, 1920; it was drawn by Ponzi on the defendant and was presented for payment at its bank by the payee, one Nielsen, about nine o’clock in the morning of August 12. Nielsen was given two checks by the defendant drawn on the Fourth Atlantic National Bank, payable to his order for $1,700 and $5,000 respectively. These checks were presented for payment through the clearing house and were paid by the drawee and by it charged against the defendant’s deposit account.
The trial judge made the following and other findings: “ . . . there was no lack of good faith on the part of the defendant in the matter of the three withdrawals from the Ponzi account and ... it had no knowledge of the filing of the bankruptcy petition or of the application for a receiver until after the period August 9 to August 13. . . . the defendant had no pecuniary interest in the three withdrawals
Under § 70a of the national bankruptcy act, "The trustee of the estate of a bankrupt, upon his appointment and qualification, . . . shall ... be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as it is to property which is exempt, to all . . . (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial processes against him.....” Apart from the question as to the time when the trustee in bankruptcy generally takes title, the bank with which the alleged bankrupt in involuntary proceedings has an ordinary customer’s account may, without liability to the subsequently appointed trustee, pay during the period between the filing of the petition and the adjudication a check drawn against such account by the alleged bankrupt, if payment is made in good faith and without' notice of the pendency of the petition or of the appointment of a receiver. It was said in Cunningham v. Commissioner of Banks, 249 Mass. 401, at page 412: "A bank receiving deposits and paying the checks of its depositors in good faith in the ordinary course of business commonly incurs no liability to anybody under the bankruptcy act.” Although the act by its terms vests in the trustee the title to the property as of the date of adjudication, where, as in the case at bar, the defendant bank has paid in good faith checks of a depositor without knowledge of the filing of an involuntary petition in bankruptcy against him, or that receivers have been appointed, and no demand was made for the deposit until after the checks were paid, the trustee subsequently elected cannot recover from the defendant the amounts paid on the checks. In re Zotti, 186 Fed. Rep. 84; petition for certiorari denied sub nom. Watson v. European American Bank, 223. U. S. 718.
It is the contention of the plaintiff that the filing of the petition was a caveat to everyone within this Federal jurisdiction; that the defendant had actual knowledge of the fifing of the petition prior to the payment of the checks; that if it did not have such actual knowledge it had knowledge of such facts as put it upon inquiry, and it is chargeable with constructive notice of the fact; and he relies upon the decision in Mueller v. Nugent, 184 U. S. 1, where it was said at page 14: “It is as true of the present law as it was of that of 1867, that the fifing of the petition is a caveat to all the world, and in effect an attachment and injunction, Bank v. Sherman, 101 U. S. 403; and on adjudication, title to the bankrupt’s property became vested in the trustee, §§ 70, 21e, with actual or constructive possession, and placed in the custody of the bankruptcy court.” This statement cannot be construed to mean that the title of the bankrupt vests in the trustee at the time of fifing the petition. Such construction would be contrary to the express provisions of the act. The statement in Mueller v. Nugent, supra, was made with ref
The mere filing of a petition in the case at bar cannot be considered as a caveat charging the defendant with notice. The finding that the defendant did not have actual knowledge of the filing of the petition before paying the checks is decisive. Even if there were publications in newspapers to the effect that an involuntary petition in bankruptcy had been filed against Ponzi and an application had been made for the appointment of a receiver, and the defendant’s treasurer knew of Ponzi’s dealings and general scheme of operations, the trial judge finds that his first knowledge of the filing of the petition and proceedings with reference to the receiver was not acquired until after August 13, 1920. The circumstance that these statements were published in newspapers circulated and sold in Lexington did not require a finding that they were read by the officers of the defendant who thereby had knowledge of the bankruptcy proceedings. There was no evidence that any officer of the bank, apart from Eaton, its treasurer, and Aldrich and Brown, who were directors, knew that Ponzi had a deposit account with the defendant, or that any of the defendant’s officers, from state
The plaintiff’s requests for rulings numbered one to fourteen could not properly have been given. They all raise substantially the same questions of law as are involved in the general finding for the defendant and in the specific finding that the bank had no knowledge of the filing of the bankruptcy petition against Ponzi before the payment of the checks.
Requests fifteen and sixteen are, in effect, that if the checks were paid by the defendant “innocently and in ignorance of the filing of the petition,” this was an affirmative defence and the burden of proving it rested upon the defendant. If we assume that this contention is sound, there was no error. The judge found that there was no lack of good faith on the part of the defendant in honoring the checks, and that it had no knowledge of the fifing of the petition or the application for a receiver until after August 13. This finding, made upon evidence submitted by the defendant, was, in substance and effect, a finding that the defendant had proved that it acted in good faith and without notice. Even if the plaintiff were entitled to have the judge specifically rule upon the requests, his failure to do so, in view of this finding, could not have been prejudicial to the plaintiff.
The plaintiff also excepted to rulings of the judge, 8b, 8c and 8d. They related to the title to the property of the bankrupt during the period between the fifing of the involun
The appeal from the order denying the plaintiff’s motion that the defendant’s president be directed to answer interrogatories 5 to 10, both inclusive, and 12, cannot be sustained. Questions of law relating to answers' to interrogatories properly maybe brought to this court by exceptions. Brooks v. Shaw, 197 Mass. 376, 378, 379. Cutter v. Cooper, 234 Mass. 307,314. Such questions cannot come up by appeal. Samuel v. Page-Storms Drop Forge Co. 243 Mass. 133, 134. G. L. c. 231, § 96. Without intimating that any error was committed in the rulings, it is enough to say that they all relate to inquiries respecting what newspapers were read by officers of the bank between August 9 and 12, 1920, and to what newspapers the bank subscribed. These interrogatories were immaterial as it did not appear that the officers acquired any knowledge of the bankruptcy proceedings. The appeal should be dismissed.
Exceptions overruled.
Appeal dismissed.