George Shiras, Jr.

“ Justice Blatchford, then sitting as district judge, that a mere fraud on the bankrupt law, by the acceptance of a preference, was not, in itself, actual fraud; and, commenting on this decision, the court said: 'Such conclusion seems just and reasonable. The bringing of an action by a creditor in the ordinary mode of procedure in the state courts, and procuring a judgment, may be, as in this case, constructive fraud, for which the lien will be set aside. ”

“ The decision of the state court, that the facts did not make out a case of actual fraud on the part of the bank, so as to deprive it of a right to prove for more than a moiety of its debt, and thus relieve the indorser of liability, in whole or in part, seems to be well founded in reason. ”

“ But even that will depend upon the further fact that bankrupt proceedings shall be instituted within the limited time provided by law. If such proceedings are not so begun, the lien would be valid and effectual. ”