The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1867-04-12
Fraudulent preference.

The bankrupt law, as finalIy passt nrn
now in force, contains one lmpol INN =, "
vision which will prevent the continuance
If what has been a very common p,aol'c GO
| II has been a very frequent transact,oh ~
| a being in financial difficulty, and having
dnuht Of his ability to carry his debts, 10
borrow money on security Of Is, under o
bargain that. in case an assignment De-
COMES necessary, the claim shall be preVi-
ously secured against loss. Such a par
gain is a fraud upon the rest oil As credit
ors in case of failure, inasmuch as IL de-
rrauds them of the benefit of so much OF ms
assets az are required to pay BIS claim,
notwithstanding the fact that the money
lent by B has been a part of AS stock IN
trade as much as the -four for which ne Is in-
debted to C, or the real estate which he pur-
chased Of d. This unjust preference IS
prohibited by the new law. Section rs
provides for the preference, list, OF the
costs and expenses of the proceedings In
bankruptcy; I'd, of debts or taxes due the
United States Sd, of debts and taxes due
the State; and 4th, of wages, not exceed
ing $50, due any employe for labor per-
formed during the six months preceding
the beginning of proceedings in bankrupt
cy. Section 20 enacts that, if the bank
rupt "has given any fraudulent preferences
contrary to the provisions of this act, or
made any fraudulent payment, gift, trans
fer, conveyance, or assignment, Of any part
of his property or if he has, in con-
temptation of becoming bankrupt, made
any pledge, payment, transfer, conveyance,
or assignment for the purpose Of
preferring any creditor or person having
any claim against him or for the
purpose of preventing the property
from coming into the hands Of his as
signee, or of being distributed under
this act in satisfaction Of his debts"
then no discharge shall be granted
to the bankrupt. Section 80 further pro-
vides that if any person becoming insol-
vent, or contemplating becoming so, shall,
within four months previous to such bank
ruptcy, cause to be attached or secured
any portion Of his property to give pre-
ference to any person having a claim
against hin, such attachment shall be void,
and the property may be recovered by the
assignee for the benefit Of the creditors in
general. 1t is still further enacted that:
off any person, being insolvent, or in con-
temptation of insolvency or bankruptcy,
within six months before the filing OF the
petition by or against him, makes any pay
ment, sale, assignment, transfer, convey
ance or other disposition, of any part of his
property to any person who then has rea-
sonable cause to believe him to be insol-
vent, or to be acting in contemplation of
insolvency, and that such payment, sale,
assignment, transfer, or other conveyance
is made with view to prevent his pro-
perty from coming to his assignee in
bankruptcy, or to prevent the same from
being distributed under this act, or to de-
feat the object of, or in any way impair,
hinder, impede, or delay the operation and
effect of, or to evade any of the provisions
of this act, the sale, assignment, transfer,
or conveyance shall be void, and the as
signee may recover the property or the
value thereof as the assets OF the bank
rupt. And if such sale, assignment,
transfer, or conveyance is not made in the
usual and ordinary course of business of the
debtor, the fact shall be prjma tdcie evil
dence of fraud" The bill containing
these specific provisions is now law, and
no such preferred claims can hencetorth
he allowed. The prevalence of the prac-
tice heretofore renders it especially i'm
portant that all business men should have
a fair understanding of the express prohi-
billions we have herein noted.-Nelr York
Tribune.