Templeton v. Wollens

NOYES, Circuit Judge (after stating the facts as above). Undoubtedly the defendant received a greater percentage than other creditors. But it was a preference only in case Ee had reasonable cause to believe that one was intended. The amount was paid in pursuance of a compromise settlement. There is nothing to show that the settlement was undertaken otherwise than in perfect good faith or that it would not have been carried out if Kehler had not become insane. There is equally nothing to show, bad faith on the part of the defendant either in entering into the agreement or in receiving, the money. It does not appear that when the money was paid either Kehler’s representative or the defendant knew that any change in the situation had taken place. Nor do we see that anything occurred to put the defendant upon inquiry or that if he had made inquiries, short of making an investigation in Pennsylvania, anything would have been disclosed. It is unnecessary to go so far in this case as in Smith v. Hewlett Robin Co., 178 Fed. 271, 101 C. C. A. 576, where this court said: “When an offer of compromise is made the creditors are justified in believing that it is made in good faith to all creditors unless something occurs to put them upon inquiry.” In our opinion the evidence was insufficient to warrant the jury in finding that the defendant had reasonable cause to believe that a preference was intended, and consequently the nonsuit was properly granted and the complaint dismissed. The judgment of the District Court is affirmed.