Sundheim v. Ridge Ave Bank

• Decision Date: 08 July 1905
• Docket Number: 2.
• Citation: 138 F. 951
• Parties: SUNDHEIM v. RIDGE AVENUE BANK.
• Court: U.S. District Court — Eastern District of Pennsylvania

138 F. 951

SUNDHEIM v. RIDGE AVENUE BANK.

No. 2.

United States District Court, E.D. Pennsylvania.

July 8, 1905

E Clinton Rhoads, for trustee.

Charles F. Warwick, for Ridge Avenue Bank.

HOLLAND District Judge.

This is a suit under section 60b of the bankrupt act of July 1, 1898 c. 541, 30 Stat. 562 (U.S. Comp. St. 1901, p. 3445), to recover an alleged preference, as defined by section 60a of the same act. The amount claimed by the plaintiff is $1,320 which was paid to the defendant by the alleged bankrupt under the following circumstances: The Kensington Leather Company had been manufacturing leather under a secret process, which was supposed to be very valuable. The business was not profitable, and in order to raise money the directors indorsed a note of $3,000 for the company, which was discounted by the defendant, and became due on March 23, 1904. The note was renewed on that date, with the same indorsers, for three months, and again fell due June 23, 1904. At the time of the renewal on March 23, 1904, there was no payment on account and the bank officers were told by the makers of the note that there was no money to pay it, but that there was leather waiting to be sold. On the 2d day of June, about three weeks before the note again fell due, Edgar S. Gardner, the vice president of the bank, informed Roger J. Maynes, who seemed to be managing the leather company's business, that the board would insist upon a satisfactory settlement of the note when it fell due. At that time the leather company had on deposit with the defendant the sum of $650, out of which Maynes drew a check on that date, to wit, June 2, 1904, for $500, and paid on account of the note, which was not yet due. Mr. Gardner informed him that this payment would not be satisfactory, when he was told by Maynes they still had the leather on hand, which they were unable to sell, and therefore unable to reduce the note any further, but informed Gardner that, if he would sell the leather for the company, the proceeds could be appropriated on account of the note. Mr. Gardner called up a Mr. Orr, who was in the leather business, and as a result the leather was accepted by the bank and sold, and $820, the proceeds thereof, credited on the note when it fell due on June 23, 1904, and a new note was given for the difference. At the time of the transfer of this property to the bank by the leather company there was an inquiry as to the solvency...