Court Opinion

ID: 8199228
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:22:54.064738+00
Date Added: 2024-06-11T16:40:51.814038
License: Public Domain

Wickhem, J.
(dissenting). In Mechanics Universal Joint Co. v. Culhane, supra, the court left open the question “whether a stranger would be liable as for a preference, if, without suggestion from any officer or employee of the bank, he withdrew his deposit because of rumor or suspicion of insolvency.” Perhaps the inference is that such a withdrawal is not a preference, if in all other respects it is made in the usual course of business. My difficulty with the instant case is that the information upon which defendant’s suspicion was founded was communicated to one of its officers in his official capacity as director of the Iron Exchange Bank, it having theretofore been communicated to the officers of that bank by officers of the Hurley National Bank. So far as the source of the information is concerned, it seems to me that it falls in the case of “inside” information, and that the doctrine of the Mechanics Case would cover it and declare the subsequent withdrawal preferential. The only question is whether the fact that defendant’s officers did not have precise information as to the exact condition of the Hurley National but acted upon a suspicion of its financial embarrassment is enough to save the withdrawal. In my opinion it is not. This suspicion was not grounded upon that type of vague community rumor evidently referred to in the Mechanics Case and with which everybody who has lived through these last difficult years is familiar. It was engendered by a proposal of merger officially communicated to a bank of which one of defendant’s officers was a director. While information that a merger is contemplated may not *93mean necessarily that the bank which proposes it is financially embarrassed, this was a reasonable inference during the recent crisis, and it was the inference that officers of defendant drew and acted upon. It seems to me that this is enough to compel the conclusion that the withdrawal was out of the usual course of business and preferential in character.
I am authorized to state that Mr. Justice Fowler concurs in this opinion.
A motion for a rehearing was denied, with $25 costs, on March 9, 1937. .