National Bank v. Warren - 96 U.S. 539 (1877)
U.S. Supreme Court
National Bank v. Warren, 96 U.S. 539 (1877)
National Bank v. Warren
96 U.S. 539
The mere nonresistance of a debtor to judicial proceedings in which a judgment was rendered against him, when the debt was due and there was no valid defense to it, is not the suffering and giving a preference under the Bankrupt Act, and the judgment is not avoided by the facts that he does not file the petition in bankruptcy and that his insolvency was known to the creditor.
The Tenth National Bank of New York, having an undisputed
debt against the firm of Sanger & Co. of about $10,000, endeavored to obtain its money by persuasion, but received only fair words in return. After pursuing this policy for several months, it brought suit against the debtors Nov. 3, 1870. They received delay and indulgence in its prosecution, and judgment was rendered against them on the 12th of January, 1871. Execution was issued on that day and a levy made upon their property. Yielding again to their solicitations, the bank did not press an immediate sale under the execution, and on the 24th of February, 1871, bankruptcy proceedings were commenced by their other creditors. The sale upon the execution was stayed by an injunction in the present suit, which was instituted by Warren & Rowe, assignees in bankruptcy of Sanger & Co., to set aside the judgment and execution as fraudulent and void.
This injunction was afterwards modified by allowing a sale, and directing the sheriff to hold the proceeds subject to the order of the court.
The district court ultimately dismissed the bill with costs. That decree having on appeal been reversed by the circuit court, the bank brought the case here.