U.S. Supreme Court
Hoffman v. Rauch, 300 U.S. 255 (1937)
Hoffman v. Rauch
Argued February 12, 1937
Decided March 1, 1937
300 U.S. 255
1. Bonds held by a national bank for safekeeping only were sold by the cashier, without authority from their owner, and the price was charged to the buyer's deposit account in the bank. Later, the bank was declared insolvent, and a receiver took charge. Held that the owner of the bonds was not a preferred creditor. P. 300 U. S. 256.
Nothing of value was added to the bank's property. Nothing new came into its treasury. A credit entry against an outstanding obligation represented the only possible benefit. Its total liabilities were not reduced, since a new obligation arose to pay to the owner the value of the bonds.
2. When a claim is made for preference against funds held by the receiver of a national bank, the burden is upon the claimant to establish his title; he must definitely trace something of value which belonged to him, or the avails therefrom, into the receiver's possession. A mere showing that the bank wrongly used property of another in discharging its indebtedness does not suffice to establish a preferred claim against the receiver. P. 300 U. S. 257.
85 F.2d 1000, reversed.
Certiorari, 299 U.S. 538, to review the affirmance of a judgment recovered against the receiver of a national bank by the administrator of one whose bonds the bank, while holding for safe keeping, had wrongfully sold.