Court Opinion

ID: 8828170
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:53:41.695446+00
Date Added: 2024-06-11T17:04:50.689236
License: Public Domain

Mr. Presiding Justice Thompson delivered the opinion of the court. 4. Bankruptcy, § 38*—when requested instruction on right of a bank to receive payment of note from insolvent debtor is properly refused. In an action by a trustee in bankruptcy against a bank to recover alleged preferential payments consisting of the proceeds of the sale of the bankrupt’s business, part of which was paid directly in settlement of a note and the balance on an overdraft, a requested instruction for defendant that if the jury believed that the debtor was insolvent at the time it opened its account with the bank, and that it remained, so during the continuance of its transactions with the bank, and that at the close thereof the debtor had received more money from the bank than it had repaid, and that the payment of the note was a payment on open account in regular course of business, and the bank at the time of receipt thereof did not know or have reasonable ground to believe that the debtor was insolvent, the verdict should be for defendant, held properly refused, as the money received was applied directly in payment of the note and with the intention of extinguishing a pre-existing indebtedness evidenced by it. 5. Bankruptcy, § 23*—what constitutes a preference. The payment of the proceeds of checks by a bankrupt directly to a bank with the intention of extinguishing a pre-existing indebtedness, a note owed to the bank, and without having such proceeds credited to the bankrupt’s account, is voidable as a preference under the Federal Bankruptcy Act.