In re Israel

13 F. Cas. 177, 4 Dill. 501

• Court: U.S. Circuit Court for the District of Iowa
• Decided: July 1, 1876
• Docket: Case No. 7,112
• Status: Published

Opinion

DILLON, Circuit Judge.

The question in this case is whether the creditors were entitled to prove the whole or only a moiety of their debt. They had surrendered their preference, without suit, to the assignee, before they presented their claim for allowance in bankruptcy. After a careful consideration of the 23d and 39th sections of the original bankrupt act, in connection with the amendment to the 39th section by the act of June 22, 1874 (section 12), my opinion is that the 23d section remains unrepealed by the amendment, and that if a preference be duly surrendered, as in this case, the surrendering creditor, whether his preference was an actual or only a constructive fraud upon the act, is thereupon entitled to prove his whole debt. It is not necessary to consider, on this appeal, what is a case of “actual fraud” within the meaning of the proviso to the 12th section of the amendment, for the reason that the amendment has no application to any case where the creditor has, before suit brought against him by the assignee, under section 39, made a full surrender of his preference. The opinion of the district judge, sent up with the record, as to the purpose and scope of the amendment of June 22, 1874, and the effect of the 12th section of that amendment on the law as it then stood, is so satisfactory on the question here involved, that it is not deemed necessary further to enlarge upon the subject. Affirmed.