Page:Federal Reporter, 1st Series, Volume 8.djvu/439

 JUDSON ». THE COtJBIER 00. 425 �ant. It is not claimed to come under section 5129, which relates to transfers other than those of giving preferences to creditors. Gihson V. Warden, 14 Wall. 244. �The defendant was a crediter seeking to recover something upon its demand. The arrangement made was ont of the usual course of business, as it transferred all the circus property; it contemplated, at least, a contingent preference of the defendant for a part of bis claim, and such bas been its resuit. The debtor, Queen, assented to it, not, as he testifies, with any wish or intent to give any preference to the defendant, but obviously on account of its relief from present embar- rassment, and to retain through Deniger his claims of going on with the business in the spring, Upon Deniger's expected repurchase of the prop? erty. This purpose, if no one were legally injured by the means adopted, was justifiable. Tiffanyy. Lucas, 15 Wall. 410. But, though this was doubtleSs Queen's main motive, he is none the less legally chargeable ^ith having intended all the contingencies for which the agreement provided, and among these was a preference to a greater or less extent of the defendant. Queen was insolvent at that time, and from the circumstances above stated I cannot doubt tliatibie defendant, and all the other persons taking part in the arrangement then made, knew, or had reasonable cause to believe, him so. If, in addition to this, the evidence warrants the conclusion that the defend- ant also knew that the transfer was a fraud upon the bankrupt act, then all the conditions of section 5128 exist, and the plaintiff must recover. And this is the only substantial question in the case. �Knowledge that a transfer is a fraud upon the act must include actual or constructive knowledge that the transfer is either expressly forbidden by the act or inoonsistent with its policy and intent. If the transaction as a whole is not one which, under the circumstances known to the grantee, or ascertainable by him with ordinary care, would be condemned by the words or the policy of the act, then no fraud upon it can be said to be "known" to him. It is plain, more- over, that neither the words nor policy nor intent of the bankrupt act forbid any settlement by a debtor with his creditors, nor any dispo- tion of his property, to which all his creditors assent. In re Miller, 1 B. R. 410. In providing for the disposition of the bankrupt's estate through trustees, to be chosen by the creditors and subject to the direction of a committee appointed by them, the bankrupt act itself (section 5103) recognizes the controlling power and interest of even less than the entire body of creditors. An omission of a cred- itor's name from the sehedule of creditors, if made with the creditors ��� �