Page:Federal Reporter, 1st Series, Volume 6.djvu/66

 54 FEDERAL REPORTER. �operation of the bankrupt law; and that said Vogeler, at the time the chattel mortgage was made to him, had reasonable cause to believe that Taxis was insolvent, and knew that a fraud upon the bankrupt law was intended. The plaintiff therefore prays that the mortgage may be set aside. The defendant, by his answer, admits the making of the mortgage, but denies ail the other allegations of the petition, and claims that the mortgage is a valid, subsisting lieu. �The case was referred to Kegister Bail for the taking of tes- timony and for an opinion therein. The register bas reported the. testimony and his findings. The register reports that from the evidence in the case Taxis was insolvent when the mortgage was executed, and that Vogeler had reasonable cause to believe he was insolvent, and therefore the mortgage should be set aside ; and the cause is now for hearing upon the report of the register and the evidence in the cause. �The defendant claims that the conclusion to which the register arrived is erroneous. He claims that the mortgage was given in substitution of a former mortgage, and for credit and advances made in pursuance of an agreement that the mortgage should be given, and therefore it was valid, although Taxis may have been insolvent, and the defendant may have known that fact. �The evidence in the case shows that in January, 1876,. Vogeler loaned to Taxis $3,000, for which he took a chattel mortgage on the fixtures and chattels in a drug store on Broadway, and on a bottling establishment in the aame place. This loan was for one year, evidenced by a note for |3,000, and two notes for $120 each, for the semi-annual interest at 8 per cent. It further appears that this mortgage was de- livered to Vogeler, but was never recorded. When the note became due he paid one-half of it. And it further appears that about the first of April, 1877, Vogeler agreed to assist Taxis to raise money to relieve him from embarrassment by indorsing for him, and that, to seeure him. Taxis agreed to give him a mortgage upon the Fifth street store property, and upon the Broadway property, which was already mort' ��� �