Court Opinion

ID: 8829026
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:56:37.407497+00
Date Added: 2024-06-11T17:04:52.101806
License: Public Domain

DENISON, Circuit Judge.
The only question sought to be presented by this record is as to whether a trust fund is so identified and followed as to justify preserving it for the beneficiaries as against general creditors. For the rules governing such identification, under analogous circumstances, see In re McIntyre (C. C. A. 2) 181 Fed. 955, 104 C. C. A. 419; Duel v. Hollins, 241 U. S. 523, 36 Sup. Ct. 615, 60 L. Ed. 1143.
The trust fund property was composed of Liberty Bonds, deposited with the bank (later, the bankrupt), merely for safe-keeping, as is demonstrated by the express declaration on each deposit passbook given in exchange for the bonds. It is not material that ordinary savings deposits were afterwards occasionally credited upon the same passbooks, as was also interest accruing on the bonds. No lien or preference on account of such deposits or interest is claimed in this proceeding, or was intended by the opinion of the District Court. The bonds for which preference is now claimed aggregated about $5,500.1 The bank took $6,300 of bonds of the same class, united them with $8,700 of its commercial paper, and sent the whole to its Detroit correspondent bank, as collateral security for a loan of $8,500. This was the situation when a receiver was appointed in the state court, and the bank ceased to exist as a going concern. With the amount realized in liquidation of the bank’s other assets, the receiver paid the entire debt to the Detroit bank, and received back all the collateral. These bonds, amounting to $6,300, came to the trustee in bankruptcy.
We see no-plausible theory upon which the trust now claimed can be defeated, unless it might be said that the Detroit bank obtained a superior lien, which passed to the receiver of the state court upon its *926redemption. If this redemption had been at the expense of the general " creditors, the theory would require a careful examination; but there is nothing to show that the collateral security thus redeemed by the receiver was not worth all it cost him to redeem it, without resorting to the bonds wrongfully pledged. Clearly it was the duty of all concerned to see that the general assets of the bank, rightly pledged as collateral security for the Detroit loan, were exhausted before resort was had to the bonds. Those general assets, upon their face, appeared to be sufficient to protect the bonds against the pledge, and if they were insufficient, and thereby the general unpledged assets of the bank have been depleted to get these bonds back where they belong, we think the burden was upon the general creditors, represented by the trustee, to show it. This results from an application of the elementary rule that one who relies upon an exception or upon an impeachment of the prima facie situation carries the burden of proof, and fails in his case if he does not discharge the burden. See, for a very late illustration, Hill v. Smith ("January IS, 1923) 43 Sup. Ct. 219, 67 D. Ed.-.
Upon the appeal, the order of the District Court is affirmed. The petition to revise, if there is one, is dismissed.2

 So counsel state. The record does not show, and is otherwise so imperfect that the appeal could well be dismissed for that reason. We prefer to assume that the total is less than $6,300, and dispose of the matter on the" merits.

 The printed record begins as if a petition to revise, but continues and ends as an appeal.