Court Opinion

ID: 6642971
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:47:09.229469+00
Date Added: 2024-06-11T15:59:18.717577
License: Public Domain

HOFFMAN, District Judge.
This was a question certified to the court by A. B. Bates, *1165Esq., register, pursuant to section four of the bankrupt act. I am disposed to entirely assent to the general views of the register as to the intent and construction of the various sections of the act referred to by him. I also de dine [incline]1 to take the same view of the facts of this case as presented by him in his opinion. But it has appeared to me that these questions do not properly arise in the present case. If a preference was given by the bankrupt and received by the creditor, who had reasonable cause to believe that the debtor was insolvent, or acting in contemplation of insolvency, such preference was given only in respect of the note then due. The money paid for the flour was applied to the payment of that note, and it was not alleged on the argument that the proofs showed any understanding or agreement that the flour was to be held as security for the other notes not due, or that its proceeds were in any to be applied to the payment of those notes, or in any way credited to the debtor. The sale of flour was absolute on its face, and, so far as appears, transferred the whole property in it to the purchaser, with no obligation on his part to account for the proceeds or to pass them to the credit of the seller on account of the other notes given by the latter. If this be so, the preference was given only in respect of the note then due, and I think it clear that the provisions of the thirty-ninth section, which deprives the creditor who receives a preference of the right to prove his debt, only refers to the debt sought to be preferred and not to other debts, and especially those not then due, in respect of which no preference was attempted to be given. I therefore think that in this case the creditor should be allowed to prove the debts evidenced by the two notes not due at the time the flour was sold to him.

 Printed “decline” in 2 N. B. R. 167, octavo edition, but in the quarto it is given as “incline.”]