Page:North Dakota Reports (vol. 48).pdf/864

 creditors from receiving the same or an equal share in, from, and, out of the assets of his estate, in violation of the Bankruptcy Act.”

The trial court made findings to the effect:

(1) That it was not established by a preponderance of the evidence that the moneys transferred to the intervener belonged to the bankrupt, or that his estate had been diminished by the deposit and payment thereof.

(2) That the intervener did not know, and had no_ reasonable cause to believe, that the transfer or payment of the moneys to it would effect a preference.

These findings are based upon the testimony of witnesses who were called and testified orally in the trial court, so the trial judge had opportunity, not only to hear their testimony but to observe their demeanor while testifying. And in my opinion both findings are correct. The first finding is decisive of the action, for manifestly there can be neither disposition of property with the intent to hinder, delay, or defraud creditors, nor a preferential transfer, within the purview of the Bankruptcy Act, unless the property transferred was something belonging to the bankrupt, which his other creditors had a right to subject to the payment of their claims. 7 C. J. 165, 166. The burden was upon the plaintiff, trustee, to establish that the moneys sought to be recovered belonged to the bankrupt, and were by him transferred in violation of the provisions of the Bankruptcy Act. 7 C. J. 269. This burden was not sustained. On the contrary, the preponderance of the evidence sustains the contention of the intervener that the moneys in controversy did not belong to the bankrupt, but belonged to Fred Schultze.

, C. J., and, J., concur.