English v. Ross

Citations

• 140 F. 630
• 1905 U.S. Dist. LEXIS 102

Syllabus

<p>1. Bankruptcy — Voidable Preference — Knowledge of Creditor.</p> <p>Where all the facts known to a creditor pointed to his debtor being insolvent, which was the fact, the creditor is chargeable with knowledge that a transfer to him as security of practically all of the debtor’s available property, within four months prior to the latter’s bankruptcy, was intended to give him a preference, and such transfer is voidable, under Banlcr. Act July 1, 1898, c. 541, § 60b, 30 Stat. 562 [U. S. Comp. St 1901, p. 3445.]</p> <p>[Ed. Note. — For cases in point see vol. 6, Cent. Dig. Bankruptcy, §§ 255, 257.]</p> <p>2. Same — Preference Effected by Deed Intended As Security — Act Pa.</p> <p>June 8, 1881 — Deeds and Mortgages — Recording Acts of Pennsylvania — Right of Trustee to Question Transaction — Section 60a Bankr. Act 1898 As Amended February 5, 1903 — Date As of Which Transfer to be Adjudged a Preference.</p> <p>Conveyances of real estate absolute on their face were executed by the debtor to his creditor, the one April 21, 1894, and the other July 30, 1900. Both were admittedly given as security for existing and subsequently accruing indebtedness, and with other securities, also transferred to the creditor, constituted practically all the available property of the debtor. The conveyances were not recorded until June 2, 1903, at which time the grantor was insolvent, and must have been known to have been so by such creditor. Four days later involuntary proceedings in bankruptcy were instituted against the grantor, and he was subsequently adjudicated a bankrupt. On a bill by the trustee to have the conveyances set aside as a preference, held:</p> <p>(a) That, although given as security merely, the Pennsylvania act of June 8, 1881 (P. L. 84), prohibiting a deed absolute on its face*from being reduced to a mortgage, except by a defeasance in writing, signed, sealed, and delivered by the grantor at the time and recorded within 60 days, prevented the said conveyances from being