178 F. 304 | S.D.N.Y. | 1910
(after stating the facts as above). The bankrupt’s property was the chose in action against the bank. To speak of it as “money on deposit” is confessedly a colloquialism. When the petition was filed, it is said, citing Mueller v. Nugent, 184 U. S. 1, 22 Sup. Ct. 269, 46 L. Ed. 405, there was a caveat, just as any one dealing with a res once in a court of equity always takes with notice of all the results of the suit and the existing or future equities of all parties. It is not necessary here to consider how far that doctrine applies to a bankrupt who may deal with an innocent person, or whether his sales of chattels are subject to notice of all equities which may then exist or later arise.
Here the bank has not meddled with the bankrupt’s assets at all. The property was, as I have said, a chose in action, to which it was an incident that the obligor should honor sight drafts. It did honor such a draft, innocently as all sides concede, and in so doing it availed itself of the conditions of the very obligation under which the trustee now sues. Of course, the trustee is subject to the same conditions, when he sues, as the bankrupt is under. One of these conditions is the right of the debtor bank to treat as a valid extinguishment pro tanto any payment made upon check.
It is only by what seems to me a confusion of the fundamental relation between the bank, and the bankrupt that I can hold liable the former. The bank in no sense transferred property of the bankrupt: for it had no such property. He himself, the bank’s customer, alone had any property, and that was a right to sue, subject to a condition which has occurred.
I can only conclude that the order was erroneous, and it must be reversed.
