Page:Federal Reporter, 1st Series, Volume 5.djvu/299

 SWAN V. BOBINSOIT. 2S7 �SwAN, Glark & Co. V. EoBrasoN, Assignee, etc. �{Oireuit Court, D. Delaware. January 11, 1881.) �1. Bankeupt Law of 1867— Pbbfbrence— " Reasonablb Cause to Bk- �MEYE. "—The provisions of the bankrupt law of 1867 are applicable to ail matters of fact constituting the act of bankruptcy, where they have transpired before the amendement of June 22, 1874. Ail that is neces- Bary to establish under the original act is that the creditor accepting a preference had " reasonable cause to helieve" the debtor to be insolv- ent, or acting in contemplation of insolvency, at the time of the tak- Ing of the said preference, and not that he had actual knowledge of 8uch Insolvency. �2. Insot-vbnct— Inabilitt to Meet Dhbts as thet Mature ra tue Ok- �BiNABT Courbe of Business. — As the supreme court of the United States haa decided in rçpeated instances that inability to meet debts as they matureln the ordinary course of business constitutes insolv- ency within the meaning of the bankrupt act, a creditor who holds unp^d protested paper of the bankrupt at the time he accepts a pref- erence shall be presumed to have actual knowledge of the insolvency of the bankrupt; and any contract by which such preference is attemptcd to be secured is thereby made void. �S. Preference — Transfer of Stock- Advahces Kadb bt Creditor. — Where the subject-matter of the transfer is shares of stock, the in- validity of the contract goes to the extent of the whole transfer; but ■while the transfer as such is totally void, the bankrupt estate shall not be permitted to retain moneys paid in by the creditor to increase the value of the stock, nor the actual advances made by him at the thne of the transfer and upon the faith of the validity of the same, and which increased the assets of the bankrupt'a estate, withor t ac- counting theref or. �In Bankruptcy." �Bill filed on the equity side of the circuit court Novemoer 20, 1877. Answer filed April 1, 1878. Answer of the Aid Loan filed the same date. Eeplication filed May 6, 1878. �Beadfoed, D. J. The facts proven in this case, as we think, are as f oUows : �Thomas J. Graves was adjudged an involuntary bantrupt on September 30, 1873. It is certain that during July, 1873, up to the fourtb day of September, 1873, when he made his voluntary assignment for tha benefit of hi& creditors. he was ����