Clark v. Northampton National Bank , 160 Mass. 26 ( 1893 )

Field, C. J.

The amount of the notes is to be set off against the balance due on account of the deposits at the time of the commencement of the proceedings in insolvency, unless the deposits made after March 8, 1892, are to be considered as made with a view to give a preference, or to effect a fraudulent transfer of property contrary to the statutes relating to insolvency, or as made upon a trust for creditors. Demmon v. Boylston Bank, 5 Cush. 194. Whether these deposits were made in violation of either § 96 or § 98 of Pub. Sts. c. 157, was a question of fact, and the court, 'trying the case without a jury, has found that they were not so made. Leighton v. Morrill, 159 Mass. 271. On the facts found by the court, the rulings on this part of the case were right.

We are not certain that the exceptions set out all the evidence. Enough however is recited to show that the plaintiff had some ground to contend that after March 8 the bank knew that the business of the Florence Tack Company was being carried on with a view of converting its assets into cash for the benefit of its creditors, and that the company must either effect a compromise with its creditors or go into insolvency. The money received after March 8 ought perhaps to have been specially deposited, but this was not done, and the account of the Tack Company with the bank continued unchanged in form. There is evidence that the defendant’s cashier understood that, after March 8, checks were to be drawn only to “ pay the help ” of the company, but there is also evidence that checks were in fact drawn for other purposes, and were paid. There appears to be no doubt that the officers of the bank knew of the insolvency of the company on March 8. Still, it is a question of fact whether the transactions between the company and the bank after March 8 were had under an implied contract or understanding on the part of both parties different from that which existed before. The court has, in effect, found that after March 8 the money continued to be deposited and checks to be drawn upon the same understanding as that which existed before that time, that is, upon the understanding that the relation of the parties continued to be the ordinary one of a depositor with a bank of discount and deposit. We cannot say, as matter of law, that this finding was wrong. It was for the court below to draw the proper inferences of fact, and the exceptions disclose no error of law. Exceptions overruled.