Knoll v. Commercial Trust Co.

Citations

• 249 Pa. 197
• 94 A. 750
• 1915 Pa. LEXIS 699

Syllabus

<p>Bankruptcy—Bank deposits—Notes held by bank — Set-off— Check given for note—Unlawful preference—Forfeiture of right of set-off.</p> <p>While it is well settled that, in the absence of fraud, a bank having funds of a bankrupt on deposit may set-off a debt owed it. by the bankrupt against the claim of the trustee in bankruptcy for the deposit, and may prove any balance against the bankrupt^ estate, a bank holding notes of a depositor which accepts payment thereof by check against the funds on deposit, within four months of the bankruptcy of the depositor, and with knowledge of the latter’s insolvent condition is the recipient of an unlawful preference within the meaning of the Bankruptcy Act, its right to set off its notes is thereby forfeited, and it will be liable to the trustee in bankruptcy for the amount of the check.</p>