Stedman v. Bank of Monroe

Citations

• 117 F. 237
• 54 C.C.A. 269
• 1902 U.S. App. LEXIS 4434

Syllabus

<p>1. Bankruptcy—Unlawful Preference—Evidence.</p> <p>The bankruptcy act (section 67d) provides that liens given or accepted in good faith, and not in contemplation of or in fraud on the act, and for a present consideration, which have been recorded according to law, if record thereof was necessary in order to impart notice, shall not be affected by the act. Prior to bankruptcy a bankrupt had given a mortgage for $3,500 to secure $3,000 loaned to him at the time of the mortgage, and $500 borrowed by him more than four months before bankruptcy. It appeared from the evidence that the indebtedness of the bankrupt of which the bank had knowledge was small compared with what it understood to be the value of his assets, that it believed that $2,800 of the Indebtedness was to be paid from such loan, and it did not appear that he believed himself insolvent. Held, that as to the $3,000 the mortgage was valid.</p> <p>2, Same.</p> <p>The taking of the security where six-sevenths of the debt secured was a then present loan did' not raise any presumption that the creditor had any belief that the debtor was insolvent.</p>