In the Matter of A. M. Townson & Co., Bankrupt

I would reverse the Order of the District Court.

I would do so for these reasons:

First, the deposit “set-off doctrine” is not applicable to bank accounts of receivers in bankruptcy since they are in custodia legis.

Second, assuming arguendo, that the doctrine is applicable to bankruptcy receivers’ accounts, there was error in its application in the instant case for these reasons:(a) The designation “Special Machinery Account” was sufficient to put the bank on inquiry that the funds in it were at the minimum the subject of a claim of ownership by someone other than the bankruptcy receiver since…