250 F. 983 | 5th Cir. | 1918
The following state of facts was shown by a petition filed by the trustee of the estate of Dennis F. Long, a bankrupt:
An involuntary petition in bankruptcy was filed against Long on April 5, 1917. Prior to and after the filing of the petition in bankruptcy Long had a deposit account with the Barnett National Bank of Jacksonville, and that bank was and is a creditor of Long, holding his note for $9,750, which became due on April 1, 1917. This note was not paid at maturity, and the bank was then advised of Long’s insolvency, and was importuned by him to assist in the refinancing of his business. On April 1st there was a balance of $1,198.50 to
It is to be noted that more than the amount standing to the bankrupt’s credit at the time the petition in bankruptcy was filed was paid on checks presented after that time. This being so, the $2,703.98 balance represents funds of the bankrupt received by the bank after the petition in bankruptcy was filed. The case presented is that of a creditor getting possession of funds of the bankrupt after the petition against him was filed, and setting up a claim of right to apply such sum to the bankrupt’s debt to it. Before the bankrupt deposited these funds in the bank the petition in bankruptcy had already become operative as “a caveat to all the world and in effect an attachment and injunction.” Before the bank acquired possession the funds were already in the custody of the law. They were not subject to be withdrawn from the bankruptcy court’s grasp by another acquiring actual possession of them from the bankrupt.
This is not the case of a trustee in bankruptcy seeking to require a bank to pay the amount paid out by it on checks of the bankrupt without notice that a petition in bankruptcy had been filed against him. What the trustee sought was an order requiring the bank to pay the amount of funds deposited with it by the bankrupt after the petition was filed, and which was on deposit to the bankrupt’s credit when the bank ceased to honor his checks. There was no color of right in the bank to retain funds received and kept under such circumstances. The bank was incapable of acquiring an adverse claim upon funds received from the bankrupt after the petition against him was filed. The claim could not be regarded as an adverse one, existing when the petition in bankruptcy was filed, as the subject of it was in the bankrupt’s possession thereafter, and the bank’s claim, was one that could not be made until it acquired possession.
The trustee seeks an order requiring the delivery to him of assets of the bankrupt which were in the latter’s possession, subject to no lien, after the petition in bankruptcy was filed. A plenary suit is not necessary in such case. The delivery to the trustee of the bankrupt’s
The petition is granted, and the order of the court, sustaining the bank’s objection to the maintenance of the summary proceeding, is reversed.