APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT
Fuller, Harlan, Brewer, Brown, White, Peckham, McKenna, Holmes, Day
MR. JUSTICE DAY delivered the opinion of the court.
This is an appeal from the judgment of the Circuit Court of Appeals for the Second Circuit, reversing the order of the
District Court affirming the order of the referee in bankruptcy, allowing a claim against the estate of Stege & Brother. This claim was allowed against the contention of the trustee of the bankrupt, that it could not be proved until the bank should surrender a certain alleged preference given to it in contravention of the bankrupt act. The Circuit Court of Appeals reversed the order of the District Court, holding that the bank must first surrender the preference before it could be allowed to prove its claim. 116 Fed. Rep. 342. The Circuit Court of Appeals made the following findings of fact:
"For a number of years past the bankrupts, George H. Stege and Frederick H. Stege, were engaged, in the city and county of New York, in the business of dealing in butter, eggs, &c., at wholesale, under the firm name and style of Stege & Brother. On January 27, 1900, they filed a voluntary petition of bankruptcy in the District Court, with liabilities of $67,232.49 and assets of $20,729.66, and upon the same day were duly adjudicated bankrupts. Among their liabilities there was an indebtedness of $40,000 to the New York County National Bank for money loaned upon four promissory notes for $10,000 each. The money was loaned to the bankrupts and the notes were originally given as follows:
"April 26, 1899, $10,000, 6 months, due October 26, 1899.
"April 26, 1899, $10,000, 7 months, due November 26, 1899.
"June 26, 1899, $10,000, 4 months, due October 26, 1899.
"August 2, 1899, $10,000, 4 months, due December 2, 1899.
"None of these notes were paid when they fell due, but were all renewed as follows:
"October 26, 1899, $10,000, 3 months, due January 26, 1900.
"November 26, 1899, $10,000, 75 days, due ...