Page:Federal Reporter, 1st Series, Volume 2.djvu/179

 172 FEDERAL REPORTER. �rupt act which declares sales and transfers invalid made to defeat the operation of the act within a specifled period before bankniptcy proeeedings are commenced. �If this is a correct exposition of the spirit and effect of those sections of the act under which the assignee's cause of action arises, the question when a case is presented is simpîy whether the transaction in controversy is one which contra- venes the conventional rules thus adopted. One of these rules is that the preference shall be one which was received within a designated time before proeeedings in bankruptcy were commenced. To hold that if the preference is concealed the time when it was obtained dates from the discovery of the preference, would, in effect, abrogate one of these conven- tional rules and sabstitute a diiïerent rule. �There is no analogy between a case arising under the sec- tions of the bankrupt act referred to, and those where parties have been denied the right to invoke the statute of limitations as a defence in actions of fraud, until the discovery of the fraud. Statutes of limitations, like the statute of frauds, are defensive statutes. Instead of creating a cause of action, as is done by the bankrupt act, they operate upon ex,isting causes of action, and impose restrictions upon their enforce- ment intended to prevent fraud, �It is the settled doctrine in equity, and now frequently rec- ognized at law, that such statutes cannot be invoked by a party who has concealed his fraud for the purpose of making his fraud successful. Barly in the history of this doctrine courts of equity planted it, upon the ground that the conceal- ment of the fraud gave rise to an equity binding upon the conscience of the party of which equity would take cogni- zance. The better ground, however, seems to be that rule of interpretation of statutes which requires them to be so con- etrued as to best secure the end in view; and this is the only ground open to a court of law. Speaking of the stat- utes of limitations, Judge Story says, in Sherwood v. Sutton, 6 Mason, 14r3: "It ought not, then, to be so construed as to become an instrument to encourage fraud, if it admits of any ����