No. 4859 | 6th Cir. | Feb 13, 1928
No objection has been made here or was made below to the jurisdiction in equity; and there is enough color of equity jurisdiction in the relation of the proceeding to the rescission of a contract, with the equivalent of reclamation, io warrant us in treating the question as waived. Warmath v. O’Daniel (C. C. A.) 159 F. 87" date_filed="1908-02-20" court="6th Cir." case_name="Warmath v. O'Daniel">159 F. 87, 16 L. R. A. (N. S.) 414; Audit Co. v. City of Louisville (C. C. A.) 185 F. 349" date_filed="1911-02-07" court="6th Cir." case_name="Audit Co. of New York v. City of Louisville">185 F. 349.
It appeared from the proofs that, within the four months preceding their adjudication in bankruptcy, .Maggard & Son paid to appellant the sum of $2,000 upon a current indebtedness, upon which no payment had been made for more than five months. The bankrupts were insolvent, and knew that they were insolvent, when the payment was made. The question was whether appellant knew or ought to have .known that the acceptance of the payment would effect a preference in its behalf. The burden of showing such knowledge on its part was on the trustee. Delaware National Bank v. Slocum (6 C. C. A.) 272 F. 11" date_filed="1921-04-15" court="6th Cir." case_name="City Nat. Bank v. Slocum">272 F. 11.
The credit manager for appellant testified that he did not know, at the timé he received the payment, that the bankrupts were insolvent. There were facts introduced in evidence, however, tending to show that he did know, or should have known. On this sole issue it would be of no service, either in this cause or as a precedent, to discuss the various facts in their relation to the opposing contentions. The circumstances are quite convincing, and in our opinion the only reasonable inference to be drawn from them is that, when the payment was made, the credit manager knew or ought to have known that it was intended to and did effect a preference.
The judgment is affirmed.