Page:Federal Reporter, 1st Series, Volume 9.djvu/164

 ALBXANDEB V. GALT. 1:49 �Alexandeb and others, Assignees, etc., v. Galt. (JMetriet Court, N. D. lUinok. November 1, 1881.) �1. Bakkbdptct — Pbeferbnceb— Whbn Valid. �Preferential payments, made more than three months before bankruptcy, cannot be set aside in favor of thc assignee in bankruptcy. �2. Assignees. �Assignees in bankruptcy do not succeed to the rights of assignees in insolr- ency whose assignment they have had set aside. �In Bankruptcy. �McFarren, for plaintiffs. �Chas. H. Roherts and Manahan dt Ward, for defendant. �Blod^ett, D. J. This is an action of trover to recover a prom- i^sory note made by one Williams to the bankrupts, Patterson & Co., and by them, as is alleged by plaintiffs, fraudulently indorsed and delivered to defendants. The naaterial facts, as shown without dis- pute in the propis, or by stipulation in writing, are as follows : �Patterson & C!o* were engaged in Ibusicess as J)ankers at Sterling, in this district, from 1869 to the sixteenth of, January, 1878. On the seventeenth of January, 1878, said firm made a voWntary assignment of their propefty tb oneKosTi^ell Champion, in trust', for the payment'ot their debts, but Champion; the assignee, did not file his inventory and bond with the clerk of the county court of Whiteside county, where the parties resided, pursuant to the statute of this State in regard to voluntary assignments, approved May 22, 1877, until the fifth^ of Fehruary, 1878. �On the twenty-fourth day of April, 1878, a petition in bankruptcy was filed in this court against Patterson & Co., on whieh they were subsequently ad- judged bankrupts, and plaintiffs have been duly appointed and qualifled assignees; and, under a decree of this court, in a suit brought by plaintiffs as assignees in bankruptcy, the assignment to Champion was set aside on the twentieth of July, 1879. It also appears in proof, and is undisputed, that defendant, Galt, was treasurer of a cheese faetory in the vicinity of Sterling, and kept his funds as such treasurer on deposit with Patterson & Co., and that on the sixteenth of January, 1878, there was to his credit on this deposit account about $1,540; that about two months before the sixteenth of Janu- ary, defendant told J. M. Patterson, one of the firm, that the money to his credit as treasurer belonged to the cheese faetory, and that he vvould draw it out unless he was sure of getting it or having it protected, and that Patterson then told him he should be protected. On the sixteenth of January Patter- son & Co. were insolvent and on the eve of making an assignment for the beneftt of their creditors, when J. M. Patterson took the note in question from the files of bills receivable belonging to his banking flrm, computed the inter- est on it to that date, and charged the sum then due for principal and interest to the defendant's account as treasurer, indorsed the note with the firm name, and piaced it, in an envelope, before them in the bank vault, containing some ��� �