BANKRUPTCY-SET-OFF-BANK DEPOSITS

Endorsers of a corporation's notes caused the corporation to make deposits in the payee bank in the regular course of business, knowing the corporation to be insolvent, and the bank took over the deposits within four months of adjudication in bankruptcy. It was contended that under the amended definition of "transfer" as set out in section 1 (30) of the Bankruptcy Act of 1938, this transaction resulted in a voidable preference to the endorsers under section 60. The trial court rejected this contention. On appeal, held, affirmed.

Although the 1938 amendment gave a broader significance to the term "transfer" than formerly was the case, it was not intended to effect any change in the accepted law as to bank deposits. Hughes and Co. v. Machen, (C.C.A. 4th, 1947) 164 F. (2d) 983.