Horace Gray

“ And the point there decided was that a power of attorney to confess a judgment was an act of the bankrupt creating a 'security,' which that bankrupt act in express terms declared void only if made in contemplation of bankruptcy and for the purpose of giving a preference or priority over general creditors. ”

“ Many find themselves with ample means, good credit, large business, technically insolvent, that is, unable to meet their current obligations at fast as they mature. But by forbearance of creditors, by meeting only such debts as are pressed, and even by the submission of some of their property to be seized on execution, they are finally able to pay all, and to save their commercial character and much of their property. If creditors are not satisfied with this, and the parties have committed an act of bankruptcy, and creditor can institute proceedings in a bankrupt court. ”

“ But until this is done, their honest struggle to meet their debts and to avoid the breaking up of all their business is not, of itself, to be construed into an act of bankruptcy or a fraud upon the act.
'It is also argued that, inasmuch as to lay by and permit one creditor to obtain judgment and levy on property necessarily gives that creditor a preference, the debtor must be supposed to intend that which he knows will follow. The general legal proposition is true, where a person does a positive act, the consequences of which he knows beforehand, he must be held to intend those consequences. ”

“ The careful change in the language of all the provisions of the bankrupt act of 1898 from those of the former bankrupt acts upon the subject must have been intended by Congress to prevent a debtor from giving a creditor an irrevocable warrant of attorney which would enable him, at any time during the insolvency of the debtor, and within four months before a petition in bankruptcy, to obtain a judgment and levy the execution on all the property of the bankrupt, to the exclusion of his other creditors. ”

“ But it cannot be inferred that a man intends, in the sense of desiring, promoting, or procuring it, a result of other persons' acts, when he contributes nothing to their success or completion, and is under no legal or moral obligation to hinder or prevent them. ”

“ Acts of bankruptcy by a person shall consist of his having . . . suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings, and not having, at least five days before a sale or final disposition of any property affected by such preference, vacated of discharged such preference. ”

“ It is entitled 'An Act to Establish a Uniform System of Bankruptcy.' And the word is manifestly used in other parts of the law to describe a particular legal status, to be ascertained and declared by a judicial decree. It canot be easily admitted that this very precise and definite term is used in this clause to signify something quite different. It is certainly true in point of fact that even a merchant may contemplate insolvency and the breaking up of his business, and yet not contemplate bankruptcy. ”

“ By § 67, subd. c, a lien obtained in any suit, 'including an attachment upon mesne process, or a judgment by confession,' begun within four months before the filing of the petition in bankruptcy, is dissolved by the adjudication in bankruptcy, not only if 'such lien was sought and permitted in fraud of the provisions of this act,' but also if 'its existence and enforcement will work a preference.' And by subd. ”

“ He may confidently believe that his personal character, and the state of his affairs, and the disposition of his creditors, are such that when they shall have examined into his condition they will extend the times of payment of their debts and enable him to resume his business. ”

“ On November 21, 1898, Sarah Johnstone caused judgment to be duly entered in the circuit court of the county of Dane, state of Wisconsin, against said Nelson upon the note and warrant of attorney aforesaid for the sum of $8,975. Upon that judgment, execution was immediately issued out of the court to the sheriff of that county, who levied upon the stock and goods of Nelson, and on December 15, 1898, sold the same at public auction, and applied the proceeds thereof, to wit, the sum of $4,400, upon and in part payment of the judgment so rendered. ”