Studley v. Boylston Nat Bank of Boston

• Decision Date: 21 November 1912
• Docket Number: 991.
• Citation: 200 F. 249
• Parties: STUDLEY v. BOYLSTON NAT. BANK OF BOSTON.
• Court: U.S. Court of Appeals — First Circuit

200 F. 249

STUDLEY v. BOYLSTON NAT. BANK OF BOSTON.

No. 991.

United States Court of Appeals, First Circuit.

November 21, 1912

Appeal from the District Court of the United States for the District of Massachusetts; Frederic Dodge, Judge.

Action by H. J. Butler Studley, as trustee of the Collver Tours Company, against the Boylston National Bank of Boston, to recover alleged preferences. From a decree dismissing a petition, the trustee appeals. Affirmed.

J Butler Studley, of Boston, Mass. (Stewart C. Woodworth and Brandeis, Dunbar & Nutter, all of Boston, Mass., on the brief), for appellant.

Hollis R. Bailey, of Boston, Mass. (George F. Piper, of Boston Mass., on the brief), for appellee.

Before COLT and PUTNAM, Circuit Judges, and BROWN, District Judge.

PUTNAM Circuit Judge.

The proponent of this proceeding is the trustee in bankruptcy of the Collver Tours Company. The respondent is a bank of deposit, where the bankrupt kept an ordinary bank account borrowing money from it, and keeping deposits there, from 1907 to the time the bankruptcy petition was filed on December 16, 1910. Borrowings and deposits ran along in the customary way, with nothing occurring out of the common course, unless as herein stated. The trustee, claiming that what occurred constituted a preference, filed in the District Court a petition to recover from the bank certain sums received by it, which petition was dismissed by the District Court in bankruptcy, whereupon the trustee took this appeal.

The appellee-- that is, the bank-- first filed a petition for dismissal of this appeal on the ground that there had been no final decree; but the order in the District Court dismissing the petition contained all the elements of a final decree and was in such form as has been customarily accepted as such in bankruptcy proceedings.

The most convenient way of stating the facts is to recite them as they appear in the opinion of the learned judge of the District Court, which, although not strictly a part of the record, so far as we cite it is fully supported by the proofs. We will observe, however, that the word 'payments,' as used in the citation we make, covers proceedings by offset as well as payments according to the usual use of the word. The opinion states as follows:

'The payments to this bank which the trustee seeks to recover back as preferences voidable under section 60b of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 562 (U.S. Comp. St. 1901, p. 3445)) were on September 12, 20, and 30, and October 3 and 14, 1910. The payments were of $5,000 each, except that of October 3d, which was of $2,500. Adjudication was on January 9, 1911, under an involuntary petition filed December 16, 1910; the act of bankruptcy charged being a general assignment by the bankrupt on December 9, 1910.

'Each of the payments was from funds which had been from time to time deposited by the bankrupt to its own credit, and subject to its own checks, in a deposit account which it had maintained with the bank since 1906. Each payment was of a note which had previously been given to the bank by the bankrupt and which fell due at the time of the payment. The payments of September 12th, 20th, and 30th were each made by the bankrupt's check upon the deposit account referred to, given at the time by it to the bank for the purpose. In the case of the payments on October 3d and 14th the bank itself charged up the amount due on the note against the deposit account without asking the bankrupt's consent, but with its acquiescence, thus paying itself the amount due on the note without the use of any check to effect the payment.'

We cite further from the opinion of the learned judge of the District Court to show the nature of the deposit account in question:

'In June, 1907, the bank discounted two notes of $2,000 each for the bankrupt, which were paid from its deposit account in October, 1907. In February, 1908, it had discounted three notes, amounting in all to $6,500, which were paid in like manner in September and October, 1908. In 1909, under an agreement to give the bankrupt a 'line of discount' amounting to $25,000, it discounted notes amounting to $15,000 in April, $10,000 in May, $10,000 in July, and $500 in September. Of these notes $25,000 in all were renewed during the year as they became due, and $10,500 in all were paid. Beginning with May 12, 1909, the total amount of these notes outstanding during the remainder of the year was at no time less than $25,000, and for a time in September, 1909, it stood at $25,000. Under a similar agreement, new notes amounting to $25,000 in all were discounted during 1910 at various times up to and including August 4th, notes to the same amount were renewed at various times to and including September 6th, and notes to the same amount were

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