Swarts v. Fourth National Bank

Citations

• 117 F. 1
• 54 C.C.A. 387
• 1902 U.S. App. LEXIS 4399

Syllabus

<p>1. Bankruptcy—Preference—Definition.</p> <p>Section 60a furnishes the legal and controlling definition of the preference specified in section 57g and other parts of the bankrupt act of 1898.</p> <p>2. Same—Test.</p> <p>The test of a preference is the payment, out of the bankrupt’s estate, of a larger percentage of the claim of a creditor than other creditors of the same class receive from that estate, and it is not whether or not, in view of the obligations of sureties to pay the claim, the payment benefited the preferred creditor.</p> <p>S. Same—Payment on Indorsed Notes Constitutes.</p> <p>Payments by the bankrupt, while insolvent, within four months prior to the filing of the petition in bankruptcy against him, upon his indorsed notes, which the indorsers would have paid if he had not, constitute a preference, whether the creditor preferred derived any benefit from these payments or not.</p> <p>4 Same—Surrender.</p> <p>A creditor who has several claims of the same class, upon one of which he has received a preference, must surrender the preference before-any of his claims can be allowed.</p> <p>5. Same—Status at Date of Filing Petition Fixes Creditors’ Rights.</p> <p>The status of their claims at the time of the filing of the petition in-bankruptcy fixes the rights of the creditors to share in the estate of the bankrupt, under the bankrupt act of 1898.</p> <p>8. Same—Classes of Creditors.</p> <p>The meaning of the term “class” in the bankrupt act should be derived, and the classification of creditors thereunder should be made, from the provisions of that act.</p> <p>7. Same—Test of Classification of Creditors.</p> <p>The test of the classification of creditors under the bankrupt act of 1898 is the percentage of their claims they are entitled to draw out of the estate of the bankrupt, and not the relations of the creditors to* parties other than the bankrupt If they are entitled to receive the-same percentage, they are in the same class; if different percentage