Court Opinion

ID: 8255653
Source: CourtListenerOpinion
Date Created: 2022-10-16 13:40:14.250583+00
Date Added: 2024-06-11T16:42:59.119402
License: Public Domain

Payment made to a creditor on pressing and repeated demands, has been considered to be compulsory, and therefore not fraudulent.
The Ordinance of Bilboa, chap. 17, sec. 23, provides, that if a debtor, near failing, or before he makes his situation known, pays a debt not yet due, such a payment is to be considered as fraudulent. The converse proposition must be correct—rthat if he pays a debt already due, the payment will be deemed a fair one.
It never w as determined that a voluntary payment, security, or conveyance, made without contemplation of bankruptcy, although with *165knowledge in the debtor, (and even in the creditor so paid) of the debtor’s insolvency, and completed by delivery of possession, shall amount to an act of bankruptcy, or be void, unless it be attended with other circumstances of legal or actual fraud. Cooper’s B. L. 147. Hopkins vs. Gerry, 7 Mod. 139.
Payment at the instance or on the pursuit of a creditor is a forced payment; even a transfer of property. Payment not voluntary when there is an intermediate demand. Baily’s ass. vs. Bernard & others, Campbell N. P. 416.
¾ The act of 1808, chap. ] 6, is an act sui generis, the provisions of which ought not to be extended to other cases by implication.
A debtor, in insolvent circumstances, may bona fide give a preference to one creditor to the exclusion of others, and such preference, though voluntary, is valid, unless done in contemplation of bankruptcy. And even if an act of bankruptcy be contemplated by the debtor, yet, if at the instance, and on the application of a particular creditor, he pays such a creditor, or assigns him property, such payment or assignment will be valid, as against the assigns of the bankrupt. 5 Johnson, 413.
Further Argument. See Post.