Page:Federal Reporter, 1st Series, Volume 2.djvu/188

 ADAM8 V, MERCHANTS' NAT. BANK. 181 �any element requisite under the law or under the statute. This is the rule laid down In re Gurney, and also in Miller y. Jones. In the latter case, while admitting there are decisions to the contrary, Stroug, J., says : "The adjudication of bank- ruptcy is equivalent to the recovery of a judgment and a levy." It seems to me that any other rule than this would be fatal to the rights of creditors, and would render the bank- rupt law in one partioular almost entirely inoperative. �It is also claimed, on the part of the bank, that the bank- rupts received a considerable fund at the time this contract ■was made which went to increase their estate, and, therefore, it not being a security given for an antecedent indebtedness, but for money actually received at the time, it ought to be held valid. Undoubtedly there are distinctions between a case where an effort is made to secure or pay a precedent debt, and that where money or property is received at the time hy the bankrupt as a part of the contract which isthe subject of investigation; but that circumstance alone cannot render a contract valid as against creditors which otherwise is unlaw- ful, because that would enable one crediter to obtain a pri- ority of payment over anotber; and to hold the contract valid in this case wonld give the bank a preference over the general creditors of the bankrupt, which ought not to be allowed unless the contract is in ail respects valid. This principle is recog- nized, and the law as to pledges and the rights of an assignee in bankruptoy as the representative of the creditors stated, in Casey v. Cavaro, 6 Otto, 467. �The resuit is that the decree of the district court must be reversed, and the bank stand as a common instead of a pre- ferred creditor.of the bankrupt's estate. ����