Page:Federal Reporter, 1st Series, Volume 5.djvu/305

 the security might avail himself of a remedy well settled in courts of equity of being subrôgated to the rights of the prin- cipal crediter. In the judgttient of this court the Aid Loari, without warrant oMaw^permitted this mortgage tobe satis- fied. But as this aioney'arising from the appropriation of the shares of stock went to relieve the estatte of the hankrupt from 80 ûitich indebtedness, ' and^ the said real estate was afterwards sold by theorder of thiS court, aûd the proceeds of the said sale are in the hands of the assignee, it is but jiist and equitable that thia fund should b'e made answerable for the amount of indebtedneBs due the owners of these shares of stock, and involuntarily contributed to them to the benefit of: the estate. So there is no difficulty in disposing of this case» as far as regards the ownership of these shares of stock, and the rights of the parties in relation to them. �But the more serious questions for the consideration of the court are — First, is this purchase void in toto by reason of its infringement of the provisions of the hankrupt laws of the United States in force at the time of this contract; and, sec* ond, if not void in toto, how far void? This transter of stock was made on the first day of August, 1873, and its validity or invalidity must be determined by the lawa of the United States in force at that time. There is nothing in the enaot-' ment of June 22, 1874, to require any other construction Of the hankrupt law of March, 1867, than that already given by the courts, and we must look to those decisions as to its real meaning, rather than to speculations as to what ought or ought not to be the degree of liberality with which a creditor's and debtor'a conduct should be treated by the courts. This court thinks tha,t the law of March 2, 1867, goverus this case. Sections 5128, 5129; U. S. Eev. St. The inquiry, therefore, will be as to "reasonable cause to believe," (the words used in the act of 1867,) and not as to the actual knowledge, "that a fraud in the act was intended," as required by the amendment of June 22, 1874, �The leading case on this point is that of Toofv. Martin, 13 Wall. 40. This case gives a construction to the act of 1867* ����