Quittner

This appeal presents the following question of law: Where a corporation made a voluntary assignment for the benefit of creditors and was thereafter adjudicated a bankrupt, may a creditor of the bankrupt corporation who had advanced money on a sales contract prior to the assignment use its claim against the bankrupt corporation as a defense to a claim of the trustee in bankruptcy for the price of goods shipped such creditor of the bankrupt corporation by the assignee for the benefit of creditors in continuance of the sales contract?

The facts are for the most part not in dispute, the parties having stipulated thereto.

On October 1, 1948 appellee gave a purchase order for one thousand tons of electric furnace scrap to California Hydraulic Metals, Inc. On October 18, 1948 appellee advanced $15,000 to California Hydraulic Metals, Inc., to be credited against the purchase price of shipments of scrap already made and shipments to be made.

On October 23, 1948 California Hydraulic Metals, Inc., executed and delivered a general assignment for the benefit of creditors to Ralph Meyer, as assignee thereunder, and Meyer took possession that day.

Prior to the execution and delivery of the…