Bank of Brodhead v. Smith

Seventh Circuit

Bank of Brodhead v. Smith

199 F. 703, 118 C.C.A. 141, 1912 U.S. App. LEXIS 1751

CourtCourt of Appeals for the Seventh Circuit

DecidedApril 23, 1912

DocketNo. 1,820

StatusPublished

This text of 199 F. 703 (Bank of Brodhead v. Smith) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Bank of Brodhead v. Smith, 199 F. 703, 118 C.C.A. 141, 1912 U.S. App. LEXIS 1751 (7th Cir. 1912).

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Opinion

BAKER, Circuit Judge.

Nothing is involved in this appeal but a question of fact.

Bement was adjudged a bankrupt, and the bank thereupon applied •certain deposits upon a past-due note executed by Bement to the bank.

A month before the adjudication Bement was insolvent; and the bank and Smith & Sons Company of Chicago, also a creditor, entered into an executory contract in writing to advance money to compromise with all of Bement’s creditors at 50 cents. This contract was not performed.

So much is beyond dispute. We have examined the evidence, and it sustains the.following finding: After the bank and Smith & Sons Company had made their above-mentioned contract, the question arose between B'ement and the bank and Smith & Sons Company as to what should be done, pending the attempt to compromise, with Bement’s stock of goods. It was agreed that Bement should remain in possession and sell at retail, retain $12 a week for his services, hold the balance of the proceeds in lieu of the goods ‘so sold, together with goods unsold, for the benefit of all parties and creditors, and deposit the cash balances with the bank for safe-keeping for the purposes aforesaid. Deposits were accordingly made. Efforts at settlement failed. Adjudication of bankruptcy followed. The trustee’s demand [704]*704for the deposits was refused, on the ground that the bank had properly applied them upon its own claim.

Contentions that the executory written contract signed by Smith & Sons Company and the bank was void, because Smith & Sons Company was a foreign corporation that had not complied with the Wisconsin statutes, because the bank had no power to make such a contract, and because there was no consideratioiq are all beside the mark, for the reason that the only question relates to the conditions under which the deposits were made. The depositing of the funds was a sufficient consideration for the bank’s agreement to hold them for the purposes stated; and the trustee in bankruptcy, representing Bement and all his creditors, was the proper party to take the unsold goods, and also the funds that stood for the goods that had been sold.

The judgment is affirmed.

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BAKER, Circuit Judge.

Nothing is involved in this appeal but a question of fact.

Bement was adjudged a bankrupt, and the bank thereupon applied •certain deposits upon a past-due note executed by Bement to the bank.

A month before the adjudication Bement was insolvent; and the bank and Smith & Sons Company of Chicago, also a creditor, entered into an executory contract in writing to advance money to compromise with all of Bement’s creditors at 50 cents. This contract was not performed.

So much is beyond dispute. We have examined the evidence, and it sustains the.following finding: After the bank and Smith & Sons Company had made their above-mentioned contract, the question arose between B'ement and the bank and Smith & Sons Company as to what should be done, pending the attempt to compromise, with Bement’s stock of goods. It was agreed that Bement should remain in possession and sell at retail, retain $12 a week for his services, hold the balance of the proceeds in lieu of the goods ‘so sold, together with goods unsold, for the benefit of all parties and creditors, and deposit the cash balances with the bank for safe-keeping for the purposes aforesaid. Deposits were accordingly made. Efforts at settlement failed. Adjudication of bankruptcy followed. The trustee’s demand [704]*704for the deposits was refused, on the ground that the bank had properly applied them upon its own claim.

Contentions that the executory written contract signed by Smith & Sons Company and the bank was void, because Smith & Sons Company was a foreign corporation that had not complied with the Wisconsin statutes, because the bank had no power to make such a contract, and because there was no consideratioiq are all beside the mark, for the reason that the only question relates to the conditions under which the deposits were made. The depositing of the funds was a sufficient consideration for the bank’s agreement to hold them for the purposes stated; and the trustee in bankruptcy, representing Bement and all his creditors, was the proper party to take the unsold goods, and also the funds that stood for the goods that had been sold.

The judgment is affirmed.

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Bluebook (online)

199 F. 703, 118 C.C.A. 141, 1912 U.S. App. LEXIS 1751, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-brodhead-v-smith-ca7-1912.