Smith v. Zemurray

HUTCHESON, Circuit Judge.

Another effort to escape the inexorable equality of distribution among creditors of failed banks, by asserting that the claimant is not a creditor hut a beneficial owner of a fund held in trust, this case grounds the claim of preference on constructive fraud.

Appellee, holding a dishonored New York draft for $5,000 issued to him before it closed by the failed bank, claiming that the circumstances of its issuance raised a trust in his favor, brought this suit to recover that amount as his funds in the possession of the receiver. The District Judge thought he made his…