Irving Trust Co. v. Roth
| Decision Date | 31 October 1930 |
| Citation | 48 F.2d 345 |
| Parties | IRVING TRUST CO. v. ROTH et ux. In re RHEINAUER-ROTH KNITTING MILLS, Inc. |
| Court | U.S. District Court — Southern District of New York |
Lhowe & Obstfeld, of New York City (Emanuel A. Obstfeld, of New York City, of counsel), for plaintiff.
Walter B. Milkman, of Brooklyn, N. Y., for defendants.
This is a suit to recover alleged preferential payments. The defendant Andrew Roth was the president of the bankrupt corporation and the owner of its entire capital stock. The defendant Olga Roth is his wife. She had worked for the bankrupt corporation for six months prior to bankruptcy, except for several weeks immediately preceding the filing of the petition, when she was ill. The bankrupt company was virtually a one-man organization, engaged in making and selling knit goods. The petition was filed on July 19, 1929. The payments to Andrew Roth complained of total $650, being five separate payments made in the three weeks preceding bankruptcy. The suit is brought on the theory that these payments were on account of a debt due to him from the bankrupt, presumably for salary. The payments to Olga Roth which are complained of cover three amounts paid over to her within a month of bankruptcy. These payments to Olga Roth totaled $1,005.72, and were on account of advances made by her to the bankrupt in May, 1929.
A preference, so far as concerns the present case, is defined by the Bankruptcy Act (section 60 11 USCA § 96) to be a payment by a bankrupt, the effect of which will enable one creditor to obtain a greater percentage of his debt than other creditors of the same class; the payment being made within four months of the filing of the petition and at a time when the bankrupt was insolvent. A preference, so defined, is voidable provided the creditor receiving it has reasonable cause to believe that a preference will be the result of the payment.
In this case the issues are, first, the insolvency of the bankrupt at the times when these payments to Andrew Roth and Olga Roth were made; second, whether the effect of the payments to Andrew Roth was to give him a greater percentage of his debt than other creditors of the same class will receive, it being his contention that his claim was for wages as salesman earned within three months before bankruptcy, and therefore, to the extent of $600, a prior claim under section 64 of the Bankruptcy Act (11 USCA § 104); and, third, whether the defendants had reasonable cause to believe that the payments would effect preferences in their favor.
First, as to insolvency at the times of the payments. The defendants insist that the bankrupt was then solvent. There is nothing to support the argument beyond the testimony of Andrew Roth himself and the figures in the bankrupt's books. As indicating insolvency at the time of bankruptcy, we have the verified statement of Andrew Roth himself in the voluntary petition, to the effect that the liabilities were $29,000 and the assets only $20,000. There is plenty of other testimony in the record to show a condition even more hopeless at the time of bankruptcy. And the inference is a strong one that the corporation was likewise insolvent for at least one month prior to that date. No sudden calamity overtook this business in the final month of its existence. The...
To continue reading
Request your trial
-
Dabney v. Chase Nat. Bank of City of New York
...D.C.E.D.N.Y.1931, 46 F.2d 467, four to six days; Brown Shoe Co. v. Carns, 8 Cir., 1933, 65 F.2d 294, twenty days; Irving Trust Co. v. Roth, D.C.S.D.N.Y., 1930, 48 F.2d 345, one ...
-
Garbe v. HUMISTON-KEELING AND COMPANY
...be sufficient in amount to pay his debts". 11 U.S. C.A. ch. 1, § 1(19). Adler v. Greenfield, 2 Cir., 83 F.2d 955; Irving Trust Co. v. Roth, D.C., 48 F.2d 345; In re Studebaker Corporation, D. C., 9 F.Supp. 426. The third and fourth elements of a preference need no discussion. The transfer o......
-
In re Pacific Oil & Meal Co.
...for the financial condition of the corporation, still it did not intend to reward them, by granting them priority. Irving Trust Co. v. Roth, D.C.N.Y., 48 F.2d 345; In re Weinrod & Kaempfer, Inc., N.Y., 2 A.B. R.,N.S., 105. It is generally held that the managing or executive officers of a co......
-
Varnell v. GOOD-WYNN ELECTRICAL SUPPLY COMPANY
...v. Carns, 65 F.2d 294 (8th Cir. 1933) (twenty days); Williams v. Plattner, 46 F.2d 467 (E.D.N.Y.1931) (4-6 days); Irving Trust Company v. Roth, 48 F.2d 345, 346 (S.D.N.Y.1930) (one Moreover, the defendant's "Tender of Evidence" addresses itself only to the issue of the defendant's reasonabl......