Constam v. Haley

• Decision Date: 13 June 1913
• Docket Number: 2,346.
• Citation: 206 F. 260
• Parties: CONSTAM v. HALEY. In re THE HUB.
• Court: U.S. Court of Appeals — Sixth Circuit

206 F. 260

CONSTAM v. HALEY.

In re THE HUB.

No. 2,346.

United States Court of Appeals, Sixth Circuit.

June 13, 1913

J. S Fletcher, of Chattanooga, Tenn. (Strang & Fletcher, of Chattanooga, of counsel), for appellant.

P. V Connolly, of Cincinnati, Ohio, and Chas. C. Moore, of Chattanooga, Tenn., for appellee.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

DENISON Circuit Judge.

The question for decision here is whether the payments which Constam received and indorsed on his note against the bankrupt within four months before the bankruptcy were received with such reasonable cause to believe that they would effect a preference that they must be repaid to the trustee before Constam can prove his claim. Sections 57g, 60b, Bankr. Act (Act July 1, 1898, c. 541, 30 Stat. 560, 562 (U.S. Comp. St. 1901, pp. 3443, 3445)). Such payment was required by the referee, and on petition for review the district judge affirmed the referee. Constam appeals. We find only two distinct questions presented: (1) Did Constam through his agent, and before receiving the first of the payments in question, have reasonable cause to believe that the debtor was insolvent and that payments would effect a preference; and, if so, (2) what was the effect of that notice upon later payments not coming directly through this agency?

1. The first question is one of fact. Appellant finds against him the concurring decisions of two successive tribunals which have heard his case; and such concurring conclusions raise a strong presumption of their correctness. They will be overturned only in cases where there is a demonstration of mistake. Wabash Ry. Co. v. Compton (C.C.A. 6th Cir.) 172 F. 17, 21, 96 C.C.A. 603; and see Haines v. Bank (C.C.A. 6th Cir.) 203 F. 225.

We have considered the arguments urged by appellant's counsel and all parts of the testimony cited in that connection, and we think the utmost conclusion to which they may properly lead is that the matter is doubtful, and that, if the conclusion of the trial court had been the other way, it would have been well supported by the evidence. This is not enough; it is a very different thing from being satisfied that the conclusion below was wrong. Constam lived in Baltimore. He had purchased the note from Schloss Bros. & Co., the payees. After the maturity and nonpayment of his note he gave it to Schloss Bros. & Co., and they intrusted it to Caston, their 'credit man,' to take to Chattanooga, where the debtor was in business, and to collect or adjust. Caston's Chattanooga trip was, primarily, in the interest of his regular employer, but he was at the same time in this transaction authorized to represent and act for Constam. Caston's activity resulted in the making, at that time or shortly afterwards, of the first two or three of the payments now in question. We think it fairly inferable from all the facts and circumstances which it would be unprofitable to recount that Caston, on this occasion, learned enough of the actual situation to give him reasonable cause to believe that insolvency existed. His categorical denial of such knowledge cannot control the situation, nor conclusively rebut the presumption that a man of his skill and experience in such situations would draw the inferences which the circumstances justified.

2. At a later period, and after a considerable interval, others of the payments in question were made by the bankrupt directly to Constam; and it is claimed that he was chargeable with no notice of the situation, except such as resulted through the knowledge acquired by Caston while acting as Constam's agent, and that these later payments came as the direct result of Constam's...