Court Opinion

ID: 8783311
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:26:24.747801+00
Date Added: 2024-06-11T17:02:56.835403
License: Public Domain

GILBERT, Circuit Judge
(after stating the facts as above). It is contended that, on the agreed statement of the facts, the court erred in finding that the judgment obtained against the bankrupt was not collusive, that the appellee had no reasonable cause to believe that the bankrupt intended to give it a preference, that the judgment was not intended as a preference to the appellee, and that its enforce-' ment will not operate as a preference over other creditors. There is no evidence in the case other than the agreed statement of the facts which have been above recited, and certain documentary proofs which appear to have been introduced! in evidence, and which are not embodied in the record, and may be assumed to be the promissory notes on which the judgment was rendered. It is argued that the bank must have knowp that the bankrupt had other creditors from the fact that the moneys which it loaned him it subsequently paid out on his checks to certain wholesale dealers, and that, having that knowledge; it knew enough to put it upon inquiry to ascertain who the creditors were. But'the fact was that at the time when the second loan was made the bankrupt stated to the appellee that the amount so borrowed would! be sufficient to pay all his creditors. No reason is suggested why the officers of the bank should not have believed that statement. But it is said that, when it was discovered that a portion of the bankrupt’s stock had been shipped to Honolulu, the knowledge of that fact was sufficient to advise the bank that the bankrupt must have had other creditors, the payment of whose claims he was endeavoring to avoid. But the officers of the bank might with equal reason have assumed that it was the bank that the bankrupt was endeavoring to defraud; that, having obtained $800 from the bank, he had devised a scheme to avoid the payment thereof by secretly shipping his goods to Hawaii.
Agáin, it is argued that the fact that the bank levied an attachment should be taken as indicating that it desired to obtain a preference and subject the property-to the payment of its own debt to the exclusion of other creditors. But the action of the bank is very reasonably sustained on the theory that it feared, as it had! reason to fear; *367that, unless the remaining property was attached, the bankrupt might carry out his plan of removing all of the stock from the state of California, and! beyond the reach of the, process of the courts of the state.
It is claimed that there is evidence of collusion, and that a preference was intended in the fact that the bankrupt consented to an immediate trial, instead of leaving the cause to pursue the ordinary course. But it is evident that the bankrupt had no defense to the action, and had nothing to gain by prolonging the litigation. On the contrary, it was clearly to his advantage to put an end to the costs of keeper’s fees, and to reduce his liability for attorney’s fees, aid to the argument that, if judgment and execution had been delayed, the bankrupt’s stock of goods might have sold at a higher price, the complete answer is the stipulation between the parties that the goods when they were sold were sold for their full value. There is no proof before us that at the time when the attachment was levied, or at the time when the goods were sold on execution, there were any other creditors of the bankrupt, except such proof thereof as may be afforded by the presence in the record of a copy of the petition of creditors for his adjudication as a bankrupt, in which petition it is alleged that he was indebted in about the sum of $1,000.
.We find no merit in the appeal. The decree is affirmed,