Page:North Dakota Reports (vol. 48).pdf/861

 bankrupt testified that Goeschel was not indebted to him on October 23, 1917; that prior to that time he had transferred two sections of Montana land (sections 10 and 11) to Goeschel; that he had owned section 11, and his wife section 10; his son, Fred, had owned section 34. Goeschel desired two sections together. His son, Fred, had agreed to transfer section 34 to his mother and to receive therefor the deposit of $2,050. The bankrupt had contemplated paying some of this deposit money on his son’s note, upon which he was surety, at another bank, but such bank did not accept the offer, and accordingly he made this agreement of deposit acting as agent for his son. The bankrupt then owed the intervener an amount, unsecured, considerably in excess of $1,650. He made this arrangement to pay $400 to Pierson which was for attorney’s fees, for services rendered and to be rendered in a Montana litigation; also the arrangement to pay the intervener, upon an understanding with his son that he would pay him later out of his own property, to take care of the note that he had signed at the other bank with his son. The son, as a witness, testified similarly concerning the transaction, and that his father acted as his agent with his consent. The trustee testified that the assets of the bankrupt had been converted into cash excepting a section of land in Montana; that such assets were insufficient, in any event, to pay the creditors an amount exceeding 10 per cent. of their claims. The cashier of the intervener testified that the bank had an unsecured note for about $2,000 against the bankrupt. He knew something about the property of the bankrupt; he knew that he was hardpressed for money and unable to pay the bank; that the bank had renewed Schultze’s notes from year to year and had not pressed him for money. It was stipulated that the deposit, still remains in the depositary bank. It appears from the schedules of the bankrupt that there was listed a secured indebtedness amounting to $1,894.71 owing intervener; also, an unsecured claim of $1,500 and one of $120, evidenced by notes not signed by the bankrupt, but upon which the bankrupt assigned a partnership obligation owing the intervener. It also appears, from a certified copy of a judgment rendered in Montana, that the trustee herein was entitled to a conveyance of section 34 upon the ground that the wife of the bankrupt held such land in trust for him.

The trial court found that the litigation in Montana resulted in a determination that Goeschel was the owner of the land; that the intervener did not have knowledge of the insolvency of the bankrupt when