Louis Brandeis

“ The lender who makes an advance for that purpose with full knowledge of the facts may be acting in perfect 'good faith.' But where the advance is made to enable the debtor to make a preferential payment with bankruptcy in contemplation, the transaction presents an element upon which fraud may be predicated. The fact that the money advance is actually used to pay a debt does not necessarily establish good faith. It is a question of fact in each case what the intent was with which the loan was sought and made. ”

“ We cannot say that the facts found by the district court and affirmed by the circuit court of appeals were not supported by the evidence, nor that these courts erred in concluding upon this evidence that the mortgage was made with the purpose and intent to hinder, delay, or defraud Jones's creditors, and that Dean was not, as against general creditors, 'a purchaser in good faith.' Jones knew that he was insolvent. ”

“ On that day Dean directed that possession of the property be taken, which was done on September 13 (the 12th being Sunday) . Jones was at the time deeply insolvent and had many unsecured creditors. Some of these immediately challenged the validity of the mortgage. Within a few days an involutary petition in bankruptcy was filed and Jones was adjudicated a bankrupt. The mortgaged property was converted into cash under an agreement with general creditors that it should be deposited to await the ultimate determination of the rights of the parties. ”