Goggin

A referee in bankruptcy allowed a claim filed in Chapter XI, 11 U.S.C.A. § 701 et seq., bankruptcy proceedings by Bank of America National Trust and Savings Association, herein called the Bank, overruling objections interposed by the receiver of the bankruptcy estate and denied the latter affirmative relief prayed. The district court adopted the findings of fact and conclusions of law of the referee and affirmed the order in toto. The receiver appeals.

For some time prior to the bankruptcy proceedings, Salsbury Motors, Inc., the debtor, had borrowed funds in various sums from the Bank pursuant to a loan credit arrangement and had maintained its major deposit account with the Bank. Salsbury had regularly delivered commercial paper to the Bank for collection with the understanding that the proceeds should be credited to its general deposit account. At the inception of these proceedings Salsbury owed the Bank some $600,000 on its loan account, and the Bank held several items for collection. In the aggregate these items amounted to the sum affirmatively prayed for by the receiver. Thereafter, with knowledge of Salsbury’s intent and action herein, the Bank collected all of the items…