Opinion
No. 38460.
July 17, 1928.
John P. Dowling, of Holyoke, Mass., for creditor.
Nathan J. Saltzman, of Springfield, Mass., for trustee.
In Bankruptcy. In the matter of the Paper City Mill Supply Company, Inc., bankrupt. Orders by referee, regarding claims of E.J. Keller Company and another, affirmed.
It is conceded that the bankrupt was insolvent, and the evidence makes clear that it was deeply insolvent, at the times when the goods in question were bought. As persons in charge of a business are presumed to be aware of its financial condition, in a general way, at least, and to intend the necessary consequences of their acts, purchases on credit under such conditions are presumptively fraudulent. This inference may be overcome by evidence which shows that the transactions in question were entered into in good faith by the buyers, with a real, though illusory, expectation of making payment. In re Siegal Co. (D.C.) 223 F. 368; In re Gurvitz (D.C.) 276 F. 931; In re Morrill-Mascot Co. (D.C.) 286 F. 449.
In the present case the learned referee was satisfied by the evidence that Goldberg and Belsky, who were in charge of the bankrupt's affairs, acted in good faith. Upon such a question the conclusion of the judge, who sees the witnesses and is in the atmosphere of the case, carries great weight. I am not convinced that his decision was clearly wrong, and his orders must be affirmed. I should have reached the same result, perhaps with rather less hesitation, if he had decided the other way.
Orders affirmed.