Burns v. Wachovia Bank & Trust Co.

Did the payments made by the bankrupt upon the note constitute a voidable preference as contemplated and defined by the National Bankruptcy Act?

The pertinent elements of a voidable preference are discussed in Bridgers v. Trust Co., 198 N. C., 494, 152 S. E., 393. In the case at bar it is clear that the bankrupt was insolvent when the payments were made, and that all the payments were made within the four months period. Therefore, the determinative question is whether the defendant bank had reasonable cause to believe at the time the payments were made that such payments would effect a…