Page:Federal Reporter, 1st Series, Volume 3.djvu/807

 800 PBDBBAL BEPOBTBB. �after a recovery has been had against him for the preference ; which conclusion is certainly justified by the ianguage of the enactment, as plainly and clearly as the other neeessary con- clusion, that the creditor shall only be allowed to prove for a moiety of his debt in cases of actual fraud. Corresponding yie-ws have been held by other judges, whose opinions are also satisfactory. In re Kaufman v, Houck, 19 B. E, 284. No difficulty would arise, says Nixon, 3., if the amendment stood alone, but the section before the change expressly pro- hibited any proof by a creditor who knowingly received a preference. Creditors desired a change, and congress granted their request, as it was deemed a hardship that they should loose their whole claim in case they made an effort to secure an honest debt. Congress interfered to modify the rigor of the prior law, and the only limitation it puts upon the proof of debts is the loss of one-half of the claim when actual fraud is proved against the creditor ; but he may prove the whole if there is no actual fraud in the transaction. Unless such is the neeessary implication of the Ianguage employed, it is impossible to say what was intended by the law-makers. In re Newcombe, 18 B. E. 85. Contrary opinions bave been given by two other judges. In re Stein, 16 B. E. 270; In re Cramer, 13 B. E. 235. Beyond doubt the question must depend upon the true construction of the act of congress, and I am of the opinion that congress intended to moderato the rigor of the prior rules and to allow the creditor, after payment back of the preference, whether by suit or otherwise, to prove their whole debt, in case they had been guilty of no actual fraud. Moneys were paid by the bankrupt to the cred- itor, within the period constituting a preference, but the as- signee sued the creditor and recovered it back before the creditor offered to prove his debt. Actual fraud, or fraud in fact, is not pretended in this case, as distinguished from what is known as fraud in law. Being of the opinion that congress intended to distinguish between mere technical fraud and fraud in fact, I am of the opinion that the ruling of the dis- trict court in allowing the creditor to prove his debt is correct. Decree afiirmed. ����