Kaufman v. Tredway

On August 20, 1898, Gustave Kaufman filed his petition in bankruptcy and was subsequently adjudged and decreed a bankrupt. W. T. Tredway was appointed trustee of his estate. On July 24, 1899, the trustee commenced suit in the court of common pleas, No. 3, of Allegheny county, Pennsylvania, to recover from Joseph S. Kaufman the sum of $4,086.64, charged to have been given, on August 4, 1898, by the bankrupt to the defendant as a preference. The trial resulted in a judgment in favor of the trustee for $1,086.64 and interest. This judgment was affirmed on appeal by the superior court. An application for a further appeal to the supreme court of the state was denied, and thereupon this writ of error was sued out to review the judgment of the superior court. Section 60 of the bankrupt act is as follows:

'Section 60. (a) A person shall be deemed to have given a preference if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the* enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.

'(b) If a bankrupt shall have given a preference within four months before the filing of a petition, or after the filing of the petition, and before the adjudication, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be viodable by the trustee, and he may recover the property or its value from such person.

'(c) If a creditor has been preferred, and afterwards in good faith gives the debtor further credit, without security of any kind, for property which becomes a part of the debtor's estate, the amount of such new credit remaining unpaid at the time of the adjudication in bankruptcy may be set off against the amount which would otherwise be recoverable from him.' 30 Stat. at L. 544, 562, chap. 541, July 1, 1898, U.S.C.omp. Stat. 1901, p. 3445.

Messrs. Joseph A. Langfitt and William Kaufman for plaintiff in error.

Messrs.

H. L. Castle, William A. Stone, and Stone & Stone for defendant in error.

Statement by Mr. Justice Brewer:  Mr. Justice Brewer, delivered the opinion of the court: