Page:Federal Reporter, 1st Series, Volume 1.djvu/409

 CLABIDGB V. KULMER. 4:01 �father, and the attorney for Thompson Si Binns immediately issued execution on their judgment, �The master further reported that the confession of judg- ment to Kulmer was for goods previousiy purchased, at dif- ferent times, by Dempster, who had given checks for these purchases. The last two checks having been returned pro- tested, Kulmer went to Chester, saw Mr. Washabaugh, his attorney, and was informed by the latter that Dempster was in an embarrassed condition; that many of his checks and drafts had been protested lately, and that he had been under- going a crisis in his business affairs, but, if allowed an opportunity, would pay the claim. On behalf of Kulmer, Washabaugh then obtained the .judgment note from Demp- ster, upon the understanding that it was to remain in Wash- abaugh's hands so long as $50 a week were paid. At this time Washabaugh knew that Dempster had been frequently sued, and that about a week previous judgments had been obtained and executions issued against him for about $1,400, which, however, had been paid. �The master also reported that it was true that Dempster made statements to Mr. Thompson and Mr. Kulmer, assert- ing his solvency, but that these statements should not have deceived them, as Mr. Thompson was perfectly competent to form an opinion as to the value of Dempster' s stock, and Mr. Kulmer's counsel had fuU knowledge of Dempster's etibar- rassed condition. �The master was of opinion that the testimony showed that these execution creditors had reasonable cause to believe Dempster insolvent when they procured the judgment notes from him, (citing Dutc/ier v. Wright, 4 Otto, 557,) and further eaid: "Counsel for these execution creditors seemed to rely upon the recent case of Grant v. The Bank, 7 Otto, 80, as relaxing the rule as to preferences and knowledge on the part of the creditor of the insolvency of the debtor at the time of taking a security, and argued that the decision in that case overruled the leading cases on thô'subject cited by counsel for tho assignee in bankruptcy ; but upon a careful examination �vl,no.6— -26 1 ��� �