The opinion of the court was delivered by: BARD
These two actions, consolidated for purposes of trial, involve substantially identical facts. Each was brought, after permission had been granted by the Referee in Bankruptcy, by the Trustee in Bankruptcy of Philadelphia Consistory Sublime Princes Royal Secret 32 Degree Ancient Accepted Scottish Rite, Bankrupt, hereinafter referred to as Consistory, to recover from the defendant the sum of $2,500, paid him by the Consistory within four months prior to its bankruptcy, on the ground that the payment constituted a preference because of the insolvency of the Consistory at the time it was made. I make the following special
1. Defendants are attorneys engaged in the practice of law in Pennsylvania.
2. In and prior to June, 1939 defendants had performed various services for the Consistory and were retained by it to represent its interests in litigation then pending in the Court of Common Pleas of Philadelphia County.
3. In May or June, 1939, the Finance Committee of the Consistory withdrew from its general funds the sum of $5,000 and placed it in a checking account in the name of Francis L. Borie, who was the Secretary of the Consistory.
4. The purpose of this action was to segregate a general emergency fund to be used for different purposes of the Consistory for which it might be required, including the payment of the legal fees of the defendants and of any other unusual needs of the Consistory that might arise.
5. Defendants thereafter performed legal services for the Consistory by representing its interests in the litigation in the Common Pleas Court.
6. On May 17, 1941, the Consistory, by check drawn on its general funds dated May 17, 1941, paid to the defendant Walker the sum of $2,500 for legal sevices rendered.
7. On May 19, 1941, the Consistory, by check drawn on its general funds dated May 17, 1941, paid the defendant Jones the sum of $2,500 for legal services rendered.
8.On these dates the Consistory was insolvent.
9. Defendants knew, or had reasonable cause to believe, that the Consistory was insolvent at the time the payments to them were made.
10. On May 23, 1941, the Consistory filed a voluntary petition in bankruptcy and plaintiff is its duly qualified trustee in bankruptcy.
11. Between the time the $5,000 account in the name of Borie was opened in 1939 and May 23, 1941, the date of the voluntary petition in bankruptcy of the ...