Kimball v. E.A. Rosenham Co.
| Citation | 114 F. 85 |
| Decision Date | 24 March 1902 |
| Docket Number | 1,615. |
| Parties | KIMBALL v. E. A. ROSENHAM CO. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
Syllabus by the Court.
The receipt by a creditor of payments upon an account current in the usual course of business, which are followed by new credits for property delivered to the debtor which becomes a part of his estate, for which the creditor is not paid, and which equals or exceeds in amount and value the payments does not constitute a preference, under section 61a, and does not require the creditor to surrender such payments as a condition of the allowance of his claim, under section 57g of the bankrupt act of 1898.
The claim of a creditor for a balance due upon an account current with the bankrupt is one single claim, and, in determining its allowance and the existence of alleged preferences arising out of the acts it evidences, it must be so considered. It may not be divided into its items or into separate claims for that purpose.
Eben W Kimball, for appellant.
E. B. Kinsworthy, for appellee.
Before CALDWELL, SANBORN, and THAYER, Circuit Judges.
The E. A. Rosenham Company, a corporation, sold and delivered merchandise to the Max Elkan Company, another corporation, from time to time, on credit, in the usual course of business, and the Elkan Company paid the Rosenham Company, on account at different times, sums which aggregated $850. Of this sum payments amounting to $550 were made within four months of the date of the order which adjudged the Elkan Company a bankrupt, and payments to the amount of $300 were made more than four months before that adjudication. Some of the credits for the goods sold were evidenced by acceptances of the Elkan Company and others by the usual book account. When the Elkan Company was adjudged a bankrupt, it was indebted to the Rosenham Company in the sum of $3,384.13 on account of the goods which its creditor had sold to it on credit. $1,878.13 of this amount was owing by it when it paid the $850, and $1,506 of the amounted consisted of new credits which the Rosenham Company had extended to it for goods actually sold to it, and which became a part of its estate after all the payments were made, and on account of which nothing has ever been paid to the creditor. In this state of the case, the Rosenham Company proved and asked the allowance of its claim of $3,384.13 against the estate of the bankrupt. It was met by the objection of the trustee that its claim should not be allowed unless it first surrendered, under section 57g of the bankrupt act, the alleged preference it received by its acceptance of the $850 which the debtor had paid on some of the acceptances it had given for some of the goods. The order of the district court was that the part of the claim of the creditor which arose out of the $1,506 of new credits which were extended after the $850 was paid should be allowed without the return of the money thus paid, but that the portion of its claim which was based on the amount owing before the $850 was paid should not be allowed unless the creditor paid the $850 back to the trustee. The trustee has appealed from this order, and he assigns as error the allowance of the portion of the creditor's claim founded on the new credits without requiring the surrender of the $850.
The order is erroneous, but not for the reason alleged by the appellant. The portions of the bankrupt act pertinent to this inquiry are:
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In re Ford, Bankruptcy No. 88-00168
...of the 1898 Bankruptcy Act's preference section. See, e.g., In re Sagor & Brother, 121 F. 658 (2d Cir.1903); Kimball v. E.A. Rosenham Co., 114 F. 85, 88-89 (8th Cir.1902). The judicially created "net result" exception to a technical preference was adopted by the United States Supreme Court ......
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In re Fulghum Const. Corp.
...See also In re Sagor & Brother, 9 Am.Bkrtcy.Rptr. 361 (2d Cir. 1903); Gans v. Ellison, 114 F. 734 (3d Cir. 1902); Kimball v. E.A. Rosenham Co., 114 F. 85 (8th Cir. 1902); Dickson v. Wyman, 111 F. 726 (1st Cir. 1901). Commentary on the old Act also confirms use of the net result rule under s......
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In re Fulghum Const. Co.
...as to effectuate so unreasonable a purpose. 111 F. at 728-29. A similar result was reached by the Eighth Circuit in Kimball v. E.A. Rosenham Co., 114 F. 85 (8th Cir. 1902), which held the receipt by a creditor of payments upon an account current, in the usual course of business, which are f......
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Farmers Bank of Clinton, Missouri v. Julian
...so, on the other hand, only to the amount of the net gain to the creditor is the estate of the debtor impaired." In Kimball v. E. A. Rosenham Co., 114 F. 85, 88 (8 Cir. 1902) this Court "Our conclusion is that the receipt by a creditor of payments upon an account current, in the usual cours......
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