Jandrew v. Guaranty State Bank of Ovilla, Tex.
| Decision Date | 22 November 1923 |
| Docket Number | 3975. |
| Citation | 294 F. 530 |
| Parties | JANDREW v. GUARANTY STATE BANK OF OVILLA, TEX. |
| Court | U.S. Court of Appeals — Fifth Circuit |
H. T Bowyer and James P. Haven, both of Dallas, Tex. (Spence Haven, Smithdeal & Spence, of Dallas, Tex., on the brief) for plaintiff in error.
J. L Gammon, of Waxahachie, Tex. (J. H. Synnott, of Dallas, Tex., on the brief), for defendant in error.
Before WALKER and BRYAN, Circuit Judges, and GRUBB, District Judge.
This was a writ of error from a judgment for the defendant (defendant in error here) on an action instituted against it by the plaintiff (plaintiff in error here) for the recovery of a deposit of $1,851, which the bankrupt had with the defendant, and which was transferred to the defendant by a check given the defendant by the bankrupt, immediately before the petition was filed, to pay notes due by the bankrupt to the defendant, in excess of the amount of the deposit. The trial was had upon an agreed statement of facts. A verdict was returned by the jury for the plaintiff, which was set aside by the court, and, a retrial having been waived by the parties, the court rendered a judgment for the defendant. The record presents the single question of law as to whether the defendant bank waived its right to set off the deposit against the notes, under section 68 of the Bankruptcy Act (Comp. St. Sec. 9652), by accepting the check of the bankrupt, in advance of bankruptcy, and while the bankrupt was insolvent, and in contemplation of bankruptcy.
The authorities are conflicting on this question. The Supreme Court of the United States, in the case of Traders' National Bank v. Campbell, 14 Wall. 87, 20 L.Ed. 832, held that under the terms of the act of 1867 (14 Stat. 517), if the bank and the bankrupt knew of the insolvency of the latter when the payment of the check was made, it was a payment by way of preference and void, even though, had the bank relied upon its right of set-off, it might have been available. This case has been followed by a number of federal and state courts.
As against these decisions, we have the case of Studley v Boylston National Bank, 229 U.S. 523, 33 Sup.Ct. 806, 57 L.Ed. 1313. In that case the Supreme Court, having stated that the record did not indicate a deposit for the purpose of enabling the bank to secure a preference by way of set-off, held the case to be within its former decision (New York County National Bank v. Massey, 192 U.S. 138, 24 Sup.Ct. 199, 48 L.Ed. 380), and that the effort of appellant to distinguish it from that case, because, in the Studley Case, the parties...
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