172 F. 529 | 2d Cir. | 1909
(after stating the facts as above). The one thing absolutely essential to a preference is that the bankrupt transfer
But it is further urged that the effect of the transaction was to appropriate certain assets of the Newport Company, to wit, its demand against the Sheard Company, to the payment of this note to the exclusion of other creditors. As already pointed out, however, this ultimate result would not make the transaction a preference; the Sheard Company alone dealing with Ihe bank and acting in its own interest. But it cannot be conceded that the result claimed would follow. If the Sheard Company, knowing the Newport Company to be insolvent, acquired the note with a view to using it as a set-off or counterclaim against its debt, it could not legally do so. Bankruptcy Raw, § 68b. And, if the Sheard Company could not offset the note against the account of the Newport Company, there was no transfer or appropriation of such account, and much less a preference. The debt could still be collected by the trustee of the Newport Company and used for the benefit of all the creditors.
Filially, it is contended, in substance, that equity requires that the decree he permitted to stand— -that the whole transaction was an eva
The decree of the District Court is reversed, with costs, and the cause is remanded, with instructions to dismiss the bill, with costs.