J. M. RADFORD GROCERY CO. v. HAYNIE. In re T. I. BROWN & CO., 261 F. 349

WALKER, Circuit Judge. This was a$iit by the defendant in error, the trustee in bankruptcy of T. I. Brown & Co., to avoid as preferences several payments of money made by the bankrupts to the plaintiff in error (which will he called the defendant), within four months before the filing of the petition in bankruptcy, and to recover the amounts of such payments. There was a trial by jury. Both the individual bankrupts were witnesses in the trial. It is assigned as error that the court, over objection, admitted in evidence testimony given by one of the bankrupts at a meeting of the creditors.

Representatives of the defendant were present at the meeting. The admission of the testimony formerly given by the bankrupt followed the making by him, in the course of his examination as a witness in the trial, of a statement to the effect that the report of his testimony given at the meeting of creditors was correct, and that he confirmed that testimony- as being the truth. The witness, by adopting his formerly given testimony, made it a part of the testimony given by him in the trial. So far as appears, this was done without objection.

The result of the court’s action, which is complained of, was not to admit in evidence testimony not deposed to in the trial. That ruling was not erroneous. Within the four months period the bankrupts made three payments of money to the defendant, one of $800, one of $750, and one of $2,000. The money used in making the last-mentioned payment was borrowed by the bankrupts from a bank. The other two payments were made by checking on the bank deposit account of the bankrupts.

There was evidence tending to prove that before the payments were made the defendant had delivered to the bankrupts for collection notes and accounts which the latter had pledged to the former as collateral security, and that with the knowledge and consent of the defendant the bankrupts deposited to their own credit in bank any collections made on such collateral, and remitted to the defendant out of their general funds, without regard to the amount collected on the notes and accounts pledged to the defendant as security for the debt owing to it.

Payments so made could not properly be regarded ás made out of funds or property belonging to the defendant. This is obviously true as to the $2,000 payment, which was made with money having no connection with collateral belonging to the defendant.

That payment being a transfer of property belonging to the bankrupts, and there being evidence tending to prove that the bankrupts were insolvent when that payment was made, and that the defendant had reasonable cause to believe that the enforcement of the transfer would effect a preference, the court did not err in refusing a request to'charge the jury to return a verdict for the defendant. There is an assignment of error based upon an exception reserved to a part of the charge given by the court.

This assignment will be disregarded, because of a noncompliance with the requirement of a rule of this court (rule 11, 150 Fed. xxvii, 79 C. C. A. xxvii) that: “When the error alleged is to the charge of the court, the assignment of errors shall set out the part referred to in totidem verbis, whether it be in instructions given or in instructions refused.” It will be added that the exception as reserved leaves it in doubt what statement in the charge given was intended to be excepted to. No part of the charge contains a statement substantially the same as that attributed to the court in the exception.

The judgment is affirmed.