In re Teslow

• Decision Date: 15 February 1900
• Parties: In re TESLOW et al.
• Court: U.S. District Court — District of Minnesota

104 F. 229

In re TESLOW et al.

United States District Court, D. Minnesota, Second Division.

February 15, 1900

'At the first meeting of the creditors of said bankrupts, Wyman Partridge & Co. duly filed and had allowed its claim against the estate of said bankrupts in the sum of $1,292.92; and this is an application on the part of P. L. Vranizan, trustee in bankruptcy of the estate of Teslow & Haugen, for an order requiring said Wyman, Partridge & Co. to restore to said trustee the sum of $448.30 claimed to have been paid said creditor, as preference, within four months of the filing of bankrupts' petition and their adjudication in bankruptcy or, in the alternative, disallowing and expunging in full from the records herein the said claim of Wyman, Partridge &amp Co., so filed and allowed as aforesaid. The matter came before the referee, August 10, A.D. 1900, upon stipulation filed herein by and between the respective attorneys of the trustee and said Wyman, Partridge & Co., and was submitted to the referee for his decision upon said stipulated facts and briefs of counsel.

'The admitted facts in the case are briefly these: On or about November 1, 1899, the bankrupts began a general merchandise business at the village of Bricelyn, Faribault county, and state of Minnesota, and continued in said business at that place up to the time of their adjudication in bankruptcy, on the 15th day of February, A.D. 1900. Between November 2 1899, and the 6th day of February, 1900, the claimant Wyman, Patridge & Co., who are general wholesale dealers in merchandise at the city of Minneapolis, Hennepin county, Minn., at different times sold and delivered to the bankrupts various invoices and items of merchandise, aggregating in amount the sum of $1,741.22. These sales were made on 90, 60, and 30 days' time, and a few small sales were made on a net cash basis. On January 2, 1900, $448.30 of this indebtedness matured or was past due, and on that date Wyman, Partridge & Co. rendered the bankrupts a statement of items of account then due, which amounted to the sum of $448.30, and this amount was one the 25th day of January, 1900, duly paid. Said payment was made in the usual course of business, and Wyman, Patridge & Co. had then no notice or knowledge of the insolvency of the bankrupts, though, in fact, the bankrupts were then, and had been for some time, wholly insolvent. The payment in question was received in good faith by said Wyman, Patridge & Co., and was credited upon items of account, payment of which fell due January 2, 1900. At the first meeting of the creditors of said bankrupts, Wyman, Partridge & Co. duly proved and had allowed against the estate of said bankrupts its claim for the balance falling due subsequent to January 2, 1900, upon its account.

'It is claimed by the trustee that the payment in question is a preference. Wyman, Partridge & Co. contend, however, that each sale of merchandise was a distinct and separate transaction, and that the prohibition in the bankruptcy act against the giving and receiving of preferences can only apply to each separate and distinct transaction, debt, or claim, and that no other claim or debt is tainted by the preferential payment, except such claim or debt as is paid or partially paid, by the preferential payment. This contention cannot be sustained. To do so would have the sweeping and fatal effect of utterly defeating the provisions in the act as to preferences. In case of payment on an account containing sales at different times, all the creditor would need to do in order to defeat the preference would simply be to do as Wyman, Partridge & Co. has done,-- apply the payment received on separate items or...