145 F. 798 | 3rd Cir. | 1906
This suit was brought in. the District Court of the United States for the Eastern District of Pennsylvania by the trustee in bankruptcy of the Kensington Leather Company, under section 60 (b) of the bankrupt act of July 1, 1898 (chapter 541, 30 Stat. 562 [U. S. Comp. St. 1901, p. 3445]), to recover of the plaintiff in error an alleged preference, as defined by section 60 (a) of the above act. Judgment was entered in the court below upon the verdict of a jury for $1,414.20, besides costs. The bankrupt was incorporated in the month of September, 1903, but did not commence active business until the following December. Its chief asset was a secret process for the manufacture of leather, which process was subsequently proved to have little or no value. On or about the 24th day of that month it borrowed from the Ridge Avenue Bank, the plaintiff" in error, the sum of $3,000, and gave therefor its three months’ note, secured by individual
Five assignments of error have been filed by the plaintiff in error, the first three of which, however, while appropriate to a motion for a new trial, cannot be considered here, and, indeed, were not insisted upon at the argument. Of the two argued and relied upon, the first relates to the refusal of the trial judge to give binding instructions to the jury in favor of the defendant. It is claimed under this assignment that the facts were insufficient to warrant the judge in leaving to the jury the question of whether or not the Ridge Avenue Bank, at the time it accepted the payment of $1,320, had reasonable cause to believe that it was intended thereby to give it a preference. The case is undoubtedly near the border line separating cases where there is evidence sufficient to warrant a jury in finding a preference and those where there is not sufficient evidence to warrant such finding, and it is quite possible that another jury might have found the facts in this case differently; but the question for our determination is not whether reasonable cause that a
But it is claimed on behalf of the bank that the $500 paid on account of its note from the bankrupt’s deposit in the bank cannot in any event be considered a preference, or recovered back in this action, and that to this extent, at least, the judgment is erroneous. The position taken by the counsel of the bank is thus stated:
“The balance of a regular bank account is a debt due to the bankrupt from the bank, an,d, in the absence of collusion, the bank need not surrender such balance, but may set it off against notes of the bankrupt held by the bank’’— citing section 08 (a) of the bankruptcy act. (30 Stat. 505 [U. S. Comp. St. 3001, p. 3450]).
The mere reading of this statement, however, shows its inapplicability to the case at bar. This is not the case of a deposit remaining to the credit of a bankrupt’s estate at the time of the filing of the petition in bankruptcy, and which, under certain circumstances, and in the absence of collusion, might be the subject of set-off, but is rather that of a transfer to a bank of a port'm of the bankrupt’s estate by the bankrupt’s own act prior to the bankruptcy, and which was accepted by the bank in partial pa)mient of an unmatured claim, and concerning which transaction a jury has said that the bank had reasonable cause to believe at the time the payment was made that it was accepting a preference. It seems wholly unnecessary to add anything further upon this point. Under the circumstances disclosed, we are satisfied that the judge could not have done otherwise than submit the question to the jury.. We conclude, therefore, that this assignment of error must fail.
The only other assignment remaining for consideration relates to the admission in evidence of an order of a referee confirming a sale of the bankrupt’s property, which was made by a receiver in August, 1904. It was claimed on the argument that this order was hearsay evidence, and should not have been admitted. We think the order being one made by an officer of the court in the same bankruptcy proceeding as that in which the trial took place was competent evidence. Its value was for the consideration of the jury. Evidence had already
The result is that the judgment below is affirmed.