Page:Federal Reporter, 1st Series, Volume 1.djvu/815

 IN BB HAMILTON. 807 �ble to conçut in thîs conclusion. To constitute a preference, under section 5128, the party must make a payment, pledge, assignment, transfer or conveyance of a part of his property, either directly or indirectly, absolutely or conditionally, to some person not only having reasonable cause to believe him insolvent, but knowing that sucb pledge, assignment, pay- ment or conveyance is made in fraud of the provisions of the bankrupt act. �There was no payment of money or conveyance of any property in this case, nor was there any evidence or reason to believe that the creditors of the conjoint firm contemplated any violation of- the bankrupt act, or had any reason to be- lieve they were obtaining an unlawful preference. But, aside from this, I do not understand that the bankrupt law will treat an arrangement for a compromise made by a party who sub- sequently becomes bankrupt as a fraud upon the act, pro- vided it be made by ail parties in good faith, and an honest belief on the part of the insolvent that he will be able to carry it out. May s v. Fritlon, 20 Wall. 414; Clark v. Skilton, 20 Int. Kev. Eec. 175. �But one more question in this connection remains to be considered. Subsequent to the proving of its debt against Hamilton, and about a year after the first dividend of 50 per cent, was paid, the bank received another dividend of 25 per cent., which the assignee nowclaims should be credited upon its debt, upon the theory that the transfer to Hughes, the trustee, was, at the time it was made, a payment to the creditors of a sum equal to the value of the property received ; and, as this property finally realized 85 per cent, of their debts, or 75 per cent, after the costs and expenses were paid, that these creditors, of whom the Bank of Kentucky is a rep- resentative, can only prove for the remaining 25 per cent. �This theory cannot be supported. The*authorities above cited hold, and such I understand to be the law, that nothing less than the payment of a sum of money, or the present right to receive such money before the proof of debt is made, will prevent a creditor from proving for the whole amount. �In Sohier v.Loring, 6 Cush. 537, the creditor made a com- ��� �