279 F. 174 | W.D.N.Y. | 1921
The petition alleges, inter alia, that, the
chattel mortgage in question was given without consideration, and was accepted with the intent and purpose to hinder, delay, and defraud creditors.
It is contended that, even if the bankrupt was guilty of fraudulent intent, the presumption is not warranted that the mortgagee was a party to the fraud; ihat the latter is nevertheless protected if he advanced the consideration in good faith, but, as already stated, since the chattel mortgage was executed within the four-months period, it was incumbent upon the respondent to show good faith in its acceptance, and that it was made for a present fair consideration. This he has failed to do.
In the Van Iderstine Case, 227 U. S. 575, 33 Sup. Ct. 343, 57 L. Ed. 652, the facts differ in important particulars. There the loans were shown to have been made to the bankrupt by the Discount Company, and admittedly were used to pay certain preferred creditors. It was held that the evidence did not show an intent to defraud, but, on the contrary, showed that the advances by the Discount Company were made in' good faith, without any purpose to aid the bankrupt to defraud his creditors, and that it did not constitute a fraud for an insolvent to borrow money in order to make preferential payment to a creditor, as such payment, even though constructively fraudulent, could be recovered in an action by the trustee. Other cases cited need not be examined, as they mostly bear on actions under section 67d of the Bankruptcy Act, or on questions of preferential transfers by the bankrupt to creditors under section 60 of the Bankruptcy Act (Comp. St. § 9644).
The report of the special master is confirmed.