The opinion of the court was delivered by: CLARY
This is an action brought by the trustee in bankruptcy of a shoe manufacturing corporation under Section 60, sub. b of the Bankruptcy Act to recover certain allegedly preferential payments and the value of certain returned merchandise received by defendants from the corporation within four months of the date of the filing of an involuntary petition in bankruptcy by general creditors. Recovery is sought under the provisions of Title 11 U.S.C.A. § 96, subs. a and b. Upon pleadings and proof, I make the following.
1. Plaintiff, Richard L. Eisnaugle, is the duly qualified and acting Trustee in Bankruptcy of Schroeder Shoe Company, a bankrupt corporation, located in Portsmouth, Ohio.
2. An involuntary petition in bankruptcy was filed against the Schroeder Shoe Company by general creditors in the United States District Court for the Southern District of Ohio, Western Division, on the 16th day of April 1952, and the corporation was adjudicated a bankrupt on May 27, 1952.
3. The United States District Court, Southern District of Ohio, Western Division, by Order dated October 3, 1952 authorized plaintiff to bring this action in this Court.
4. Individual defendants, Lester Blank and Jerome G. Blank, are copartners trading as Edward Blank Sons & Co., whose principal place of business is located in Philadelphia, Pennsylvania.
5. The Schroeder Shoe Company, a corporation, was at all material times engaged in the manufacture and wholesale disposition of women's shoes. The manufacturing plant of the corporation was located in Sciotoville, Ohio, which community is contiguous with Portsmouth, Ohio.
6. Defendant partners manufacture and sell leather used by shoe manufacturers.
7. The Schroeder Shoe Company had been a customer of defendants since April of 1949 and had made numerous purchases of leather after that time and during the period running to December 21, 1951.
8. All sales of Edward Blank Sons & Co. to the Schroeder Shoe Company were made on thirty day credit terms.
10. The first sale involved in this dispute was made on November 9, 1951 in the amount of $ 691.02.
11. On or about December 17, 1951, defendants received Schroeder Shoe Company's check for $ 691.02 in payment of the above shipment. This check was postdated December 24, 1951.
12. Defendants deposited said check in their Philadelphia bank on December 24, 1951, and in due course the check was returned unpaid for the reason that there were insufficient funds in the drawer's Portsmouth, Ohio account.
13. On January 3, 1952, Lester Blank telephoned Mr. Schroeder, the President of and a very substantial stockholder in the bankrupt corporation, with regard to the returned check. Mr. Schroeder told defendant that there had been an oversight as to that check and ...