Pepperdine v. National Exchange Bank , 88 Mo. App. 81 ( 1901 )

BOND, J.

This is the second appeal in this case, the former being reported in 3 Mo. App. Rep. 425.

The action is by the trustee of a bankrupt to recover payments made by the latter to a creditor within four months prior to the petition in bankruptcy, on the theory that the defendant creditor at the time of receiving such payments had reasonable cause to believe they were intended to give a preference. On the first appeal, where the facts are fully stated, a judgment for defendant was reversed and the cause remanded, with an announcement of the principles of law which should govern the trial court on a second trial. On the retrial, as on the first trial, there was evidence for the defendant that two of the payments made to it by the bankrupt, after it had knowledge of his insolvency, and within four months next before the petition to have him declared a bankrupt, were accompanied by a statement of the debts he was going to pay, his indebtedness to other creditors and a showing of receipts for payments to certain other creditors to about seven or eight hundred dollars. But there was not a particle of evidence that these receipts evidenced a payment upon his general indebtedness which was proportionate to what was then paid to the defendant on its claim. This was the crucial question, and as there was no evidence of such equality in the payment of all of his creditors at the time the insolvent debtor paid the last two payments on his indebtedness to defendant, the learned trial judge correctly held that the entire evidence did not afford any logical and legal inferences tending to validate these two payments in view of the provisions of the bankrupt act avoiding preferences. Subsection b, section 60, of the bankrupt act, which is, to-wit: “If a bankrupt shall have given a preference within four months before the filing of a petition, or after the filing of the1 petition and before adjudication, and the person receiving it or to be benefited thereby or his agent acting therein shall have reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee and he may recover the property or its value from such person.” In speaking of the general intendment of this section, it was said on the former appeal, “where a debtor is insolvent within the meanings of the bankrupt act, that is, where his indebtedness is greater than his assets, and the creditor has knowledge of the insolvency, or where he has such information as would put a prudent man on inquiry, and receives a payment, it follows as a necessary inference that he had reasonable cause to believe that it was intended as a preference, and he can avoid this inference only by showing that an amount proportionate to the payment was made or provided for to other creditors.” We adhere to the above view, and, therefore, affirm the judgment.

All concur. Judge Goode because he deems the questions involved res adjudícala under the former opinion.