Page:Federal Reporter, 1st Series, Volume 6.djvu/487

 BILL V. SOLBEKS. 475 �ute, (section 5128, Rev. St.,) though it does not specifically name indorsers, is broad in its terms and meaning. It pro- vides that "if any person, being insolvent, * * * -within four months before the filing of the petition by or against him, with a view to give a preference to any crediter or per- son • » * yjJiQ is under any liaUlity for him, * * * makes any payment, * * * transfer, or conveyance of any part of bis property, either directly or indireetly, * * * the person receiving Buch payment, * * * transfer, or conveyance, or to be benefited thereby, having reasonable cause," etc. �This language manifesta an intent to prevent any evasion by indirect payments or dispositions of property. It is true that the defendant's liability on the note to the bank had not been fixed; but within the meaning of the law he waa under a liability for the bankrupts. He had assumed the liability of an indorser, which was contingent at the time, and which might or might not become absolute. It was such a liability as would have supported a security passing from the makera of the note to the indorser to indemnify him against loss. The transaction, as it is set out in the bill, amounted to a scheme between the bankrupts and the defendant, whereby, in antici- pation of the maturity of the note, and for the purpose of protecting the indorser against absolute liability and ultimate payment, it was arranged that through the intervention and co-operation of ail the parties the assets of the bankrupts should be appropriated to the payment of the note and con- sequent benefit of the indorser. True, the payment was not directly to the indorser, but in equity it was equivalent to that, if the facts are as stated in the bill, and equity will look through the transaction and see if it is within the spirit and meaning of the law, if not its letter. If the defendant had taken directly the securities and assets of the bankrupts for the purpose of applying them in payment of the note held by the bank, and had so applied them, and if the other required conditions had existed as alleged in the bill, there could be no question that it would have been within the inhibition of the statute. As the case is stated in the bill, has the defend- ��� �