In re Petrich

This is a petition by the trustee of the bankrupt for review of an order of the referee allowing a certain claim of the Bank of Italy, and of a separate order adjudging the same a set-off against a judgment in favor of the trustee and against the bank.

On March 23, 1923, Paul Petrieh, doing business as the Coronado Fish Company, was indebted to the Bank of Italy for money borrowed and evidenced by several promissory notes in the sum of $8,705.65. On that date he executed to the bank a single note for the entire sum and secured the same by chattel mortgage of certain property owned by him, and also by a pledge of certain other property. In July following, the note being overdue, the bank took possession of and sold the mortgaged property pursuant to the terms of the mortgage, and received, after deducting the expenses of the sale, the net amount of $2,447.15. This amount, added to certain other sums realized from the sale of the pledged property and from other sources, would if applied upon the note reduce it to $5,407.97.

On August 10th following, an involuntary petition in bankruptcy was filed against Pe-trieh and on October 11th he was adjudicated bankrupt. The chattel…