Page:Federal Reporter, 1st Series, Volume 3.djvu/806

 IN BB BEED. 799 �and that the credîtor -was also an indorsor for the bankrapt in the sum of $1,450. Preferences were Btrictly forbidden bv the bankrupt act, and by the several statutes, the provis- ion being that a ereditor, who reoeives a preference, shall not be permitted to prove bis claim, nor, in case the proof was previously given, shall he receive any dividend therefrom until he shall first surrender to the assignee ail property, money, benefit, or advantage received by him under such preference. Assignees might recover back such a preference under the original act, as well as under the last amendment; but the original act, together with the Eevised Statutes, forbid proof by a preferred crediter unless he should surrender bis prefer- ence, the requirement being that the surrender must be vol- untary, and before the final judgment against him for the amount of the preference. During the operation of that provision, there would not have been any difficulty in deter- miping the question before the court, but that provision is re- pealed by a subsequent enactment, which is inconsistent with the former act. 18 St. at Large, 181. Particular attention must be given to the amendment, or new regulation, which provides that where a preference bas been given by payment, assignment, or transfer, and the debtor shall afterwards be adjudged a bankrupt, the assignee may recover back the money or property so paid, assigned, or transferred, contrary to the act, provided that the person receiving such payment or conveyance had reasonable cause to believe the debtor was insolvent, and knew that a fraud on the act was intended. Then foUows the clause of the section in question, which pro- vides that such person, if a ereditor, shall not, in case of actual fraud on his part, be allowed to prove for more than a moiety of his debt ; and the f urther provision is that this lim- itation on the proof of debts shall apply to cases of voluntary or involuntary bankruptcy. Different judges have construed that provision differently, but the correct construction, in my opinion, is that adopted by Judge Lowell, in Re Currier, 2 Lowell, 436. His decision is to the effect that the new enact- ment provides, by necessary intendment, that if there has been no actual fraud, the ereditor may prove his whole debt, even ����