of an old debt for a week was substantial assistance.1 At one time it was held that the promise to make further advances must be one capable of enforcement; 2 but the latest decision is that if the promise is made in good faith it will save the conveyance.3 In the American law the only distinction between the conveyance of all and of a part is one of degree. The former is not an act of bankruptcy unless it is a preference; but as such. a transfer to a pre-existing creditor is out of the ordinary course of trade, it will usually be found to be a preference. And even when present value is given, the conveyance may be partly good and partly bad in equity; and though the intent to prefer may be clear, the creditor may not have cause to believe it, because he may not know that there are other creditors, or that the whole property is conveyed.5 These points will be more fully considered in later sections. § 71. Intent to prefer; Pressure. - In England, as we have seen, it was held that an intent to prefer could not coexist with other motives, and that to avoid a preference the assignees must prove that it was purely voluntary. This is an unsound definition of intent. Thus, Story, J.: "No man can be permitted to aver his ignorance of the law as a qualification of his acts. On the contrary, every man is presumed to know the law, and he is bound to know what are the legal results of his acts; or, as Lord Ellenborough said in Newton v. Chantler, 7 East, 143, Every man must be presumed to contemplate the ordinary consequences of his own act at the time of the act done.'" The case here cited by Story, J., was one in which the whole property was transferred. The citation is appropriate; but in England acts of this class are not called preferences, and pressure does not avail.8 1 Philps v. Hornstedt, L. R. 8 Ex. 26, 1 Ex. D. 62. This case was disapproved in Ex parte Cooper, 10 Ch. D. 313. 2 Ex parte Foxley, L. R. 3 Ch. 515; Pennell v. Reynolds, 11 C. B. N. s. 709; Ex parte Dann, 17 Ch. D. 26. 3 Ex parte Wilkinson, 22 Ch. D. 788. 4 Infra, § 74, and Steel Co. v. Manchester Bank, 163 Mass. 252. 5 Wadsworth v. Tyler, 2 N. B. R. 316, Fed. Cas. No. 17,032; Buffum v. Jones, 144 Mass. 29. • Supra, § 65. 7 Arnold v. Maynard, 2 Story R. 349, 353, Fed. Cas. No. 561. 8 See infra, § 72. "The intent to prefer," said Shaw, C. J., in the leading case of Denny v. Dana,1 in which there was not only pressure, but an action brought and property attached, "is essential, but every person is presumed to intend the natural and probable consequences of his own acts; and if such acts do, in fact, . . . give a very large preference, it is competent for the jury to infer the intent. It does not rebut this intent to prove that the debtor has also another motive." So another learned judge says: 2 « When such a person is in circumstances to know that an assignment to some will defeat others, how can he be held. innocent of a purpose to that effect?" Similar remarks will be found in many of the cases cited below; and the decisions come fully up to the dicta.3 It is, then, no defence that the creditor was in a hostile attitude, and induced the preference by promises, or by threats of civil or criminal proceedings. Such pressure may rather tend to show a knowledge that pressure was necessary. In short, if the fact and the knowledge exist, the intent is presumed.5 § 72. Later Cases in England. - The law of England appears to be undergoing a modification, by which it may be brought to resemble ours. In three late cases pressure has been held not a good answer to an imputation of intent. Soon after the act of 1869 was passed, the learned chief judge in bankruptcy said that the terms of the statute should be looked to in ascertaining and discovering a preference, and were a safer guide "than any scraps which may be collected 1 2 Cush. 160. 2 McKenzie v. Garrison, 10 Rich. (S. Car.) 234, 238, per Withers, J. 3 Warren v. Tenth Nat. Bank, 10 Blatch. 493, Fed. Cas. No. 17,202; Toof. Martin, 1 Dillon, 203, Fed. Cas. No. 9167, 13 Wall. 40; Clarion Bank r. Jones, 21 Wall. 325; Webb v. Sachs, 15 N. B. R. 168, Fed. Cas. No. 17,325; Rison v. Knapp, 1 Dillon, 186, Fed. Cas. No. 11,861; Driggs v. Moore, 3 N. B. R. 602, Fed. Cas. No. 4083; Hyde v. Corrigan, 9 N. B. R. 466, Fed. Cas. No. 6968. 4 Traders' Bank v. Campbell, 14 Wall. 87; Clarion Bank v. Jones, 21 Wall. 325; West Phila. Bank v. Dickson, 95 U. S. 180; Strain v. Gourdin, 2 Woods, 380, Fed. Cas. No. 13,521; Re Batchelder, 1 Lowell, 373, Fed. Cas. No. 1098; Giddings v. Dodd, 1 Dillon, 115, Fed. Cas. No. 5405; Webb v. Sachs, 15 N. B. R. 168, Fed. Cas. No. 17,325. 5 Roberts v. Hill, 23 Blatch. 312. Ex parte Hall, 19 Ch. D. 580; Ex parte Griffith, 23 Ch. D. 69; Ex parte Hill, 23 Ch. D. 695. See Re Bell, 10 Morrell, 15. as they may seem to serve out of any decision or expression of any judge." In that case his decision was reversed,2 but in Ex parte Griffith 3 a similar line of observation is adopted by the learned judges of the Court of Appeal. Jessel, M. R., said: "I am not going into a long discussion of the question whether the old law on the subject has been altered by § 92. If we are of opinion that the thing was done with a view of giving a preference to this creditor over the other creditors, why are we not to apply § 92?" Lindley, J.: "What we have to consider is the true construction of § 92. I emphatically protest against being led away from the words of the section by any argument that the standard which the Legislature has laid down is equivalent to the language of the old law. It may be so, but the language is different, and our duty is to construe that language," etc. Bowen, J., Bowen, J., expresses the opinion that when the statute had for the first time defined a preference, the course pursued by the courts was very unfortunate. The first thing which the courts did was to discuss the question whether the act had altered the old law and introduced an entirely new law, and they came to the conclusion that it had not altered the old law. Then began what I may call the old metaphysical exploration of the motives of people. . . . And so we have been drawn into questions of pressure and volition, and at length in the present case we have got into a discussion as to what is the motive of a motive," etc. In this case the preference was avoided, though there was undoubted pressure. The reasoning in this case is precisely that of Shaw, C. J., in Denny v. Dana. And it may be noted that under § 28 of the act of 1883, which makes an "undue preference" a reason for suspending or refusing the discharge, the word "preference" is made as broad in its meaning as it is in this country.5 1 Ex parte Topham, L. R. 8 Ch. 616, ferring the creditor were praiseworthy. note. 2 Ex parte Topham, L. R. 8 Ch. 614. 3 23 Ch. D. 69; and see Ex parte Hall, 19 Ch. D. 580. 42 Cush. 160, 171. [It is no defence that the debtor's reasons for pre Re Fletcher, 9 Morrell, 8; Re Vingoe, Even in England pressure has never excused the conveyance of the whole property to less than all the creditors, nor the payment or security of a creditor who has filed a petition in bankruptcy against the debtor,2 though those are instances of preference, and not fraudulent under any other possible view. And in some of the colonies, under laws not unlike that of England, pressure has been held not to negative the intent.8 On the other hand, when the statute has referred to a "voluntary preference,” it has been very properly held to embody the old decisions.4 In another late case in England, Re Saffery, our law of preference was followed. There a stockbroker, being insolvent, paid over, under pressure, a considerable sum of money, but only about five-eighths of his whole property, in trust, for the payment of his creditors at the Stock Exchange, according to the rules of the association. It was held that the transaction was voidable by the assignees, "upon this broad, general, and universal principle that any cessio bonorum made by an insolvent on the eve of bankruptcy for the benefit of some creditors to the exclusion of others, or any scheme or arrangement made for the distribution of the assets by such person otherwise than according to the provisions of the bankruptcy law, is a plain and palpable fraud; . . . cases of assignment for the benefit of creditors, cases of fraudulent preference, are merely illustrations of this general principle which underlies the whole administration of the estates of insolvents in this country." In a still later case this admirable decision was distinguished, and the official assignee of the Stock Exchange was not required to refund to the trustee in bankruptcy money which he had collected from some members and paid out to others under the rules of the association, all the credits hav 1 See Butcher". Easto, Doug. 282; Newton v. Chantler, 7 East, 138; Ex parte Trevor, 1 Ch. D. 297. 2 Rose v. Main, 1 Bing. N. C. 357. 3 See Smith v. Carpenter, 12 Moore P. C. 101; Jones v. McKenzie, 13 Moore P. C. 1; Davidson v. Ross, 24 Grant, 22; National Bank of Australia v. Morris (1892), A. C. 287. 4 Arnell v. Bean, 8 Bing. 87; Wainwright v. Clement, 4 M. & W. 385; Davies v. Acocks, 2 C. M. & R. 461. 5 4 Ch. D. 555; affirmed, nom. Tompkins v. Saffery, 3 App. Cas. 213. ing arisen from stock contracts in the Exchange.1 One point of distinction was that the official assignee of the board was under no obligation to the bankrupt, and therefore there was no privity between him and the trustee (assignee), and if his receipt of the money was unlawful, the remedy was against those who paid him. Another was that the fund itself was created by the rules of the board, and must be applied in accordance with these rules. § 73. Intent to prefer, continued. If a debtor is insolvent, and knows it, his intent to prefer may be presumed. This idea is expressed in the epigrammatic dictum of a very able judge, that the intent to prefer may be inferred from the fact of preference. This dictum is too much condensed. Even when contemplation of bankruptcy is necessary, a known insolvency may be sufficient evidence of it.3 In England, the intent is conclusively presumed when the whole property is given to less than all the creditors. In this country it has been held that if the debtor is acquainted with the state of his affairs, and is insolvent, he can only rebut the presumption by proving reasonable ground for the expectation to retrieve his standing. There is no doubt that the presumption is a disputable one, and that ignorance, however improbable, is a rebuttal, if it is proved; and there is no presumption that the creditor has knowledge of the debtor's insolvency. § 74. Intent, continued; Usual Course of Business. England, as we have seen, payment and security given in the In 1 Ex parte Grant, Re Plumbly, 13 Merchants' Bank v. Truax, 1 N. B. R. Ch. D. 667. 2 Beals v. Clark, 13 Gray, 18; Rison v. Knapp, 1 Dillon, 186, Fed. Cas. No. 11,861; Farrin v. Crawford, 2 N. B. R. 602, Fed. Cas. No. 4686; Driggs v. Moore, 3 N. B. R. 602, Fed. Cas. No. 4083. 8 Aldred v. Constable, 4 Q. B. 674; Jones v. Howland, 8 Met. 377; Buckingham v. McLean, 13 How. 151. 545, Fed. Cas. No. 9451; Re Gregg, 4 6 Bloodgood v. Beecher, 35 Conn. 469; Re Seeley, 19 N. B. R. 1, Fed. Cas. No. 12,628; Re Locke, 1 Lowell, 293, Fed. Cas. No. 8439; Re Randall, 3 N. B. R. 18, Fed. Cas. No. 11,551; Rice v. Grafton Mills, 117 Mass. 228; 4 Ante, §§ 64, 72; and see Siebert v. Buffum v. Jones, 144 Mass. 29; LeighSpooner, 1 M. & W. 714. 5 Toof v. Martin, 1 Dillon, 203, Fed. Cas. No. 9167; 13 Wall. 40; ton v. Morrill, 159 Mass. 271. 7 Quinebaug Bank v. Brewster, 30 Conn. 559. |