Westover

This suit was brought by the trustee iu bankruptcy of the Grand Avenue Lumber Company, a corporation, to recover two payments made by the bankrupt to the Valley National Bank, the appellant, on the ground that they were preferential payments made within four months of the petition in bankruptcy. The first payment of $3,040 was made October 13, 1937, and the second of $3,532.99 was made November 22, 1937. Each was paid in satisfaction of a promissory note for the amount paid. The findings and judgment were in favor of the plaintiff. The defendant, Valley National Bank, appeals.

It is a.dmitted that the appellant actually received the payments in the amounts and at the times alleged. The appellant challenges, among others, the finding of fact of the trial court that it had reasonable cause to believe that the payments made to it would effect a preference. We think the evidence is entirely insufficient to support this finding. It appears from the evidence that the bankrupt transacted most of its business with the Bank through Carl Gibson, its vice-president, who died prior to the trial. However, the payments in question were not made to him.

The trustee in bankruptcy relies…