California Airmotive Corporation v. Irving R. Bass, Trustee of the Estate of Standard Airways, Inc., Bankrupt

Appellee is a Trustee in Bankruptcy. In proceedings before the Referee in Bankruptcy, he sought and obtained an order which directed appellant, hereinafter called Airmotive, to pay $24,565.14, plus interest, to the bankrupt estate. The order was affirmed by the District Court, and Airmotive perfected its appeal. The bankruptcy resulted from proceedings taken under section 322 of chapter XI of the Bankruptcy Act, 11 U.S.C. § 722 (1964). The District Court’s jurisdiction was founded upon 28 U.S.C. § 1334 (1964), and our jurisdiction derives from the authority of 28 U.S.C. § 1291 (1964).

It appears from the record that the bankrupt filed its petition for relief under chapter XI on February 4,1964. For at least three or four years prior to that time, it had conducted various transactions with Airmotive and, as of a time within four months of the filing of its petition, had become indebted to Air-motive to the extent of approximately $160,000. A portion of this debt, approximately $40,000, was carried in Air-motive’s books as an open account. In September of 1963, approximately five months before the filing of the bankruptcy petition, the president of Air-motive attended a meeting of…