Court Opinion

ID: 8788278
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:42:09.209602+00
Date Added: 2024-06-11T17:03:11.997967
License: Public Domain

WARD, Circuit Judge.
This is an action in equity by the complainant, as trustee in bankruptcy of Charles Belling, to avoid a preferential payment alleged to have been made by the bankrupt to a creditor, the Bronx National Bank, defendant.
Section 60 of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Slat. 562 fU. S- Comp. St. 1901, p. 3445]) provides that one gives a preference if he is insolvent and makes a transfer of property within tlie specified time which will enable the transferee to obtain a greater per7 centage of his debt than others of the same class, and if the transferee has reasonable cause to believe that the transfer will effect a preference the trustee may avoid it.
November 16, 1910, the bankrupt, a vice president of the defendant bank, was arrested on the charge of obtaining a loan from the Knickerbocker Trust Company on a forged certificate for 25 shares of the hank’s stock. Kolbe, the cashier of the bank, examined the certificate in question on that day am! told the Trust Company that his signature thereto as cashier was forged. He asked Belling, “What is the matter?” and Helling replied, “I would rather not talk; 1 do not want to say anything.” On the next day Kolbe, in Beliing’s presence, told the police magistrate that the signature on the certificate was not his, and Belling said nothing.
Kolbe owed Helling $1,400 and the next day, November 17th, Belling called him up on the telephone and asked him to open an account with one Rittenberg, and deposit $150 to his credit, and to.apply the balance of $1,250 on account of his (Beliing’s) indebtedness to the bank. This Kolbe did.
*372We think that the knowledge which Kolbe, as cashier of the defendant, had November 16th, viz., that Belling had borrowed money on a forged certificate of the bank’s stock and was unwilling to make any explanation, was imputable to the bank,-and .that it constituted reasonable cause to believe that Belling was insolvent. Such an act, "and such conduct following it, are the clearest evidence of ruin and desperation. When, on the next day, Kolbe, at Belling’s request, applied $1,250 of his indebtedness to Belling on account of Belling’s indebtedness to "the bank, it followed that the bank had reasonable cause to believe that such payment would give it a preference.
The District Judge rightly decided in favor of the complainant, and the decree is affirmed.