In re Kearney

167 F. 995 | E.D. Pa. | 1909

J. B. McPHERSON, District Judge.

Upon the foregoing facts, it is clear, I think, that the payment on May 25th to the bankrupt’s brother was preferential. Even if it was intended, at the time when the loan was made, that the money should be used for the specific purpose of paying for the license, and, if not so used, that it should be returned, the testimony seems to show plainly that this intention was not carried put, but that the bankrupt used the money for some other purpose. No effort was made op his behalf to prove what he had done with it. He was not even asked the obvious question whether the deposit of $200 that appears in his bank book under date of April 28th was the money that he had received from his brother; and, as he must have known what became of it, his failure to say anything upon the subject is probably significant. Since, therefore, the money was not traced into a particular fund or deposit, or earmarked in any other way, the inevitable inference is that the check of May 25th was drawn against the general funds of the bankrupt, and was intended to prefer the payee. Except that the burden of proof was in the first instance on the trustee to prove the statutory elements of a preferential payment, the situation is essentially such as was presented in Plow Co. v. McDavid, 14 Am. Bankr. Rep. 653, 137 Fed. 802, 70 C. C. A. 422. See, also, Hosmer v. Jewett, Fed. Cas. No. 6,713; Re Richard, 4 Am. Bankr. Rep. 700; Loveland (3d Ed.) § 173; Collier (6th Ed.) p. 594; Brandenburg (3d Ed.) § 1187. After the trustee had established a prima fade case of preference, it then became the duty of the claimant to prove that the loan was impressed with a trust, and that the money could be followed, either with precision, or at least into a mass from which it might be extracted with reasonable certainty.

The order of the referee is affirmed.