229 F. 549 | 6th Cir. | 1916
Appeal from an order allowing reclamation of certain property sold by appellee to the bankrupt, on the ground that the purchase was fraudulent, in that the purchaser was insolvent and had no reasonable expectation of being able to make payment when due. The referee was of opinion that the claim of fraudulent purchase was not made out, and denied the right to reclaim. The District Judge took the opposite view, and so reversed the referee.
In reaching his conclusion the District Judge was impressed by the view that the milling company could not reasonably have expected that the existing abnormal relation between it and the bank would continue until the bill in question matured, and so must have anticipated its own early collapse, and by the fact that no one on the milling company’s behalf testified directly to a reasonable expectation of being able to pay. The disappearance of the milling company’s manager at the time of its failure made such direct testimony apparently impossible. While the considerations which controlled the mind of the judge have weight, and while the bank’s action in carrying the milling company’s indebtedness, not only in an excessive amount, but, as it did, largely by way of overdrafts, shows an abnormal condition, yet these facts do not, in our opinion, outweigh the evidence leading to the conclusion reached by the referee. The circumstances are in many respects similar to those which we considered in Kimmerle v. Farr, 189 Fed. 295, 111 C. C. A. 27 (involving alleged preferential payment), and the rules there applied are pertinent here.
"In our opinion the order of the District Court should be reversed, with costs, and the cause remanded, with directions to dismiss the petition for'reclamation.