The opinion of the court was delivered by: FOLLMER
This is an action by a Trustee in Bankruptcy to recover a preference. The cause having been tried to the Court without the intervention of a jury, and the Court having heard and considered the evidence bearing upon the issues presented, finds the facts specially, and separately states conclusions of law thereon as follows:
1. Plaintiff is Trustee in Bankruptcy of United Associates, Inc., a corporation having its principal office at Jersey Shore, Pennsylvania, and which was adjudicated a bankrupt on November 22, 1948.
2. Defendant, a banking institution, is a Pennsylvania corporation, having its principal office at Jersey Shore, Pennsylvania.
3. On October 25, 1948, the bankrupt deposited with defendant in a checking account the sum of $ 15,000.00.
4. At the time of the deposit defendant was the holder and owner of two notes of the depositor (later bankrupt), one for $ 2,580.00 and the other for $ 5,800.00.
5. On October 27, 1948, defendant charged the said two notes, and the accrued interest thereon, amounting to $ 8,441.45, against the checking account of the said depositor.
6. The $ 2,580.00 note was dated September 13, 1948, payable thirty days after date, and accordingly overdue when charged against the bank account. This note was a renewal of a prior obligation and was secured by a chattel mortgage dated September 24, 1946, mortgaging a Byers Bearcat Shovel, which mortgage was duly filed in the Prothonotary's Office of Lycoming County, Pennsylvania.
7. The $ 5,800.00 note was dated September 13, 1948, payable thirty days after date, and accordingly overdue when charged against the bank account. This note was a renewal of a prior obligation and was secured by a chattel mortgage dated September 26, 1948, mortgaging an International Tractor, which mortgage was duly filed in the Prothonotary's office of Lycoming County, Pennsylvania.
8. When the notes matured on October 13, 1948, neither note was paid or renewed and, within a week of the maturity date, Mr. Wolf, Executive Vice-President of the defendant Bank, called at the office of United Associates and there conferred with its President, Vice-President and General Manager, relative to the matter of payment and renewal of the notes. Wolf left this meeting with the understanding that United Associates had a considerable amount of money coming in and when this money came in the smaller note would be paid off and a payment would be made on the larger note.
10. After the close of business at 3:00 o'clock P.M. on October 25, 1948, the Executive Committee of defendant Bank met, at which time Wolf reported that the $ 2,580.00 note of United Associates would be paid off and a payment would be made on the $ 5,800.00 note and the latter would be renewed, that the same would be taken care of at a meeting with the officers of United Associates after the meeting of the Bank's Executive Committee.
11. Later that same afternoon, Wolf met with the officers of United Associates, at which time he stated that in accordance with the understanding at the prior meeting, the Bank expected the smaller note to be paid and a payment made on the larger and under those conditions the Bank would renew the larger note, to which the officers of United Associates objected. The meeting resulted in a stalemate and the officers of United Associates stated that they would advise the Bank the next day what they would do about the notes.
12. On October 26, 1948, at about 3:00 o'clock P.M., Johnson, the General Manager of United Associates, called at the Bank and stated to Wolf that they would pay $ 500.00 a week thereon until the notes were paid, that that was ...