Roche v. New Hampshire Nat. Bank , 192 F.2d 203 ( 1951 )

HARTIGAN, Circuit Judge.

This is an appeal from a judgment for the defendant, entered by the United States District Court for the District of New Hampshire, in a suit by a trustee in bankruptcy to recover from the defendant bank .a payment made by the bankrupt in the sum of $1010.00, alleged to have been a voidable preference. The action was tried .to a jury.

The only substantial question the jury had before it was whether or not the defendant creditor had reasonable cause to believe that the bankrupt was insolvent at the time of the payment. It may be assumed that the other elements of a preferential transfer were proved.

The trustee argues that all the elements of a preferential transfer were shown, including that the defendant had reasonable cause to believe the bankrupt insolvent at the time of said payment and that there was no genuine issue of fact to present to the jury and that the verdict was clearly disdainful of the evidence. Consequently, he concludes the court erred in not directing a verdict for the plaintiff-trustee.

The trustee stresses the point that the only witness called in behalf of the defendant was defendant’s general bookkeeper who testified that his work was of a mechanical nature and that he knew nothing of the arrangements between defendant’s president and the bankrupt. The trustee further argues that the defendant introduced no evidence to deny the alleged voidable preference.

Wyant was adjudged a bankrupt upon a voluntary petition filed September 27, 1948.

The trustee had the burden of proof to show that the defendant had reasonable cause to believe that Wyant was insolvent at the time he made the payment to the defendant on August 21, 1948. Harrison v. Merchants Nat. Bank, 8 Cir., 124 F.2d 871 ; Collier on Bankruptcy (14th Ed.), Vol. 3, § 60.62, p. 1043.

The testimony .produced on examination of the bankrupt could have provided the basis upon which a jury might conclude that the defendant did not have reasonable cause to believe the bankrupt was insolvent. The fact that the defendant through its president had told the bankrupt it would loan him money to satisfy his other creditors might well have been a controlling factor in the jury’s verdict. It could have believed that the defendant would not have told the bankrupt this if the defendant thought Wyant was insolvent. In Moore’s Federal Practice (2nd Ed.) Vol. 5, § 50.02, pp. 2315, 2316, it is stated:

“But where the evidence is conflicting or there is insufficient evidence to make only a ‘one-way’ verdict reasonably possible, a directed verdict is improper. * * “ * * * On appeal, likewise, the appellate court must consider the evidence in its strongest light in favor of the party against whom the motion for directed verdict was made, and must give him the advantage of every fair and reasonable in-tendment that the evidence can justify.”

It cannot be said on the record here, when considered with the reasonable inferences that could flow therefrom, that the evidence was “so insufficient in fact as to be insufficient in law”. Mt. Adams & E. P. Inclined Ry. Co. v. Lowery, 6 Cir., 74 F. 463, 475. The motion for a directed verdict raises a question of law only. See Marsh v. Illinois Cent. R. Co., 5 Cir., 175 F.2d 498.

It was a jury question whether or not the defendant here had reasonable cause to believe the bankrupt at the time of the payment in question was insolvent. See Wid-etzky v. Pilgrim Trust Co., 5 Cir., 108 F.2d 647.

In Tennant v. Peoria & P. U. Ry. Co., 321 U.S. 29, 35, 64 S.Ct. 409, 412, 88 L.Ed. 520, the court said: “It is not the function of a court to search the record for conflicting circumstantial evidence in order to take the case away from the jury on a theory that the proof gives equal support to inconsistent and uncertain inferences. The focal point of judicial review is the reasonableness of the particular inference or conclusion drawn by the jury. It is the jury, not the court, which is the fact-finding body. It weighs the contradictory evidence and inferences, judges the credibility of witnesses, receives expert instructions, and draws the ultimate conclusion as to the facts. The very essence of its function is to select from among conflicting inferences and conclusions that which it considers most reasonable. Washington & Georgetown R. Co. v. McDade, 135 U.S. 554, 571, 572, 10 S.Ct. 1044, 1049, 34 L.Ed. 235; Tiller v. Atlantic Coast Line R. Co., supra, 318 U.S. [54], 68, 63 S.Ct. [444], 451, [87 L.Ed. 610]; Bailey v. Central Vermont Ry., 319 U.S. 350, 353, 354, 63 S.Ct. 1062, 1064, 87 L.Ed. 1444. That conclusion, whether it relates to negligence, causation or any other factual matter, cannot be ignored. Courts are not free to reweigh the evidence and set aside the jury verdict merely because the jury could have drawn different inferences or conclusions or because judges feel that other results are more reasonable.”

Because of the factual issue raised by the pleadings and the evidence, we are not warranted in holding that the lower court erred in denying the plaintiff’s motion for a directed verdict.

The judgment of the district court is affirmed.