New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1874-03-29
COURT RECORD.
SATURDAY, MARCH %, 1874.

SATURDAY, MARCH %, 1874.
United STATES Circuit Court.
N. N. Frisbie, Esq, is appointed Unite
Commissioner.
The following decision was rendered
Judge Woods:
Charles Case, receiver of Crescent Cit
National Bank of New Orleans, VS.. Cit
zens' Bank of Louisiana.
The tifty-secOnd section OF the currenc'
act (l3 Stat, ll5) declares "that all trans
fers Of the notes, bonds, bills Of exchang
and other evidences of debt owing to AM
association or Of deposits to its credit, al
assignment OF mortgages, sureties on rea
estate or Of judgments or DEGREES in it
favor, all deposits Of money, bullion OF
other valuable thing for its use or for thu
use Of any of its shareholders OF creditors
and all payments of money to either
made after the commission Of an acl
OF insolvency, or in contemplation thereof
with a view to prevent the application
OF It's assets in the manner prescribed by
this act, or with view to the preference OF
one creditor to another, except in payment
OF Its circulating notes, shall be utterly null
and void"
Relying upon these provisions of the
statute, the complainant, Charles Case, the
receiver of the Crescent City National
Bank, files this bill against the Citizens,
Bank of Louisiana.
The bill, after averring the appointment
OF the complainant as receiver, alleges in
substance that between the first day OF Da.
cember, 1872, and the sixth of February.
1873, the Crescent City Bank drew bills Of
exchange on +. DeLizardi & Co., of Lon
don, amounting in the aggregate to e26,5Ol
5s - cash, being payable in sixty days after
sight and sold the same to the defendant.
the Citizens Bank.
That afterward, about February &c, 1873,
the said Lizardi & Co., having, after the
acceptance by them, and before the ma.
turity of the bills, failed, the defendant
demanded from the Crescent City Bank
indemnity against loss on said bills,
and for the purpose of such indemnity the
the Crescent City Bank transferred to
the defendant promissory notes, bills and
evidences OF debt amounting to $4,000.
which were then and there the property of
the said Crescent City Bank. That at the
time OF said transfer the Crescent CITY
Bank had drawn and had negotiated for
value bills of exchange on said Lzardi e.
Go. to an amount largely exceeding its cant
tai stock; that the bank had provided Ii
zardi Il Co. with funds to meet the same at
maturity; that by the failure Of Lizardi &
Go. the said bills would be dishonored and
the said bank held liable therefor, and that |
the funds provided for the payment of said |
bills had been then lost to the bank bv |
reason OF the failure of Lizardi & Co., and |
that by reason thereof and OF other losses |
the bank was then insolvent; that its in |
solvency was known to itself and the de-
fendant; that said notes, bills and evidences
OF debt were transferred to the defendant |
IN contemplation of the insolvency of the
Crescent City Bank and with view to give
preference to defendant over other cred
ltors. The bill prays that the transfer of
SAID assets be declared void and the de-
1en0Anf fol = |
them to the complainant.
Inc answer OF the defendant the Citi-
zens' Bank, which is given under the com
mon seal OF the corporation, denies all the |
material averments of the bill, except that |
the Crescent City Bank had provided Liar.
dl u Co. with funds to meet the bills drawn |
On them; that by the failure of Lizardi q |
Go. the said bills would be dishonored and
The bank held liable therefor, and that the
unds provided had been lost to the bank
II the time OF the transfer to the defendant
VI said assets.
The complainant files the general replica :
ion. I
In passing upon the case it is material to t
consider what it is necessary for the com
'lainant to establish in order to render void p
he transfer of the notes, bills, etc, to the :
,itzens' Bank. b
The transfer must have been made after i
he commission of an act of insolvency, or 8
a contemplation of insolvency. and with n
lew to give a preference to one creditor /
yer another, or with view to prevent the k
pplication of the assets of the bank in
le manner prescribed by the currency act. Z
know of no reason why different mean ii
lg should be given to the word insolvency h
; applied to banks in the currency act | L
ON the meaning given the same word in "
he bankrupt act, as applied to traders: a.
Insolvency. as used in the bankrupt act, | ri
hen applied to traders, does not mean an &
osolute inability of the debtor to pay his CT
epts at some future time, upon o settle | 81
ent and winding up of his affairs, but a to
resent inability to pay in the ordinary M
'ufse OF his business; or in other words, h,
lat a trader is insolyent when he can not ci
~ MS debts IN the ordinary course of his b,
lsiness, as men in trade usually do; and kt
len must be the conclusion, even though W
: iuaoliity oe not So great as to compel te
all 500. ar
Tins definition of insolvency, in nv iudg- ia
ent, Is the meaning of the word in the | CT
rrency act. ha
II is only necessary that the insoIvencv r;G
ould be IN the contemplation of the bank Tia
liking the transfer. The party to whom
. transfer is made need not know IF ~ | 40
1template the insolvency OF the hant u,o
Itch makes the transfer. of
Thus it was held by Mr.. Justice Story | an
der the bankrupt act of 1871, that to CON, ex
utica conveyance ''in contemplation of els
lkruptcy" it was not necessary that the | Ba
'fessed creditor should know of the fin
,tor's insolvency or should cooperate j
b him to obtain priority of payment. tor
khan, assignee, VS.. Burroughs, 3 Story. inn
'ea.s-h la. Co
ne. facts clearly established By the evil her
&c, and about which there seems -to-be | its
dispute. are as follows: Between the fest
md OF December 1872, and the sixth of knc
ruary, 1873, the Crescent City Bank still
drawn bills on +, DeL;zaydi & Co., Of 7