charged in and by an amendment made more than four months after its commission. Whether such an act, occurring more than four months before amendment, could be introduced into a pending proceeding, was thought an "interesting question" by Lacombe, J., in the Riggs Case, supra. This court answered it in the negative (In re Haff, 136 Fed. 80, 68 C. C. A. 646), the matter not having been covered by In re Sears, 117, 294, 54 C. C. A. 532, which was correctly explained and limited in application by Gleason v. Smith, 145 Fed. 897, 76 C. C. A. 427. The general rule as stated in the Haff Case has been approved, especially in the Ninth Circuit (Walker v. Woodside, 164 Fed. 685, 90 C. C. A. 644), and in the Seventh (In re Brown Commercial Car Co., 227 Fed. 390, 142 C. C. A. 83). Our own decision (In re Condon, 209 Fed. 801, 126 C. C. A. 524) is (in this respect) but a reassertion of the Haff Case. This rule rests in theory upon the reasoning of Justice Nelson in Re Craft, 6 Blatchf. 177, Fed. Cas. No. 3,317, where it was pointed out that "to allow a substantial amendment-that is, one going to the whole foundation of the proceeding nunc pro tunc-would be a direct violation" of a limitation "obviously for the benefit of the debtor" namely, the requirement that proceedings must be brought within a limited time after the act of bankruptcy is committed; i. e., under the present statute, four months. If, therefore, the creditors' allegations in respect of the proceeds of the $30,000 mortgage are to be regarded as stating an act of bankruptcy committed, and complete more than four months before amended petition filed, the order complained of was right.'

"To the same effect is In re Louisell Lumber Co., 209 Fed. 784, 126 C. C. A. 508. These cases, with others therein cited, are decisive of this case.

"The demurrer is sustained, and the petition will be dismissed."

Question 791: Within what time prior to the filing of the petition must the act of bankruptcy be committed? Is an allega

tion of an act of bankruptcy a necessary element of a petition in bankruptcy? If the petition does not allege such act of bankruptcy and is amended to allege such an act is it sufficient if it alleges an act that was within four months of the defective petition but more than four months prior to the amended petition?

B. The Particular Acts of Bankruptcy.

§ 828. Fraudulent transfers.

§ 829. Preferential payments or transfers.

§ 830. Preferences secured through legal proceedings.

§ 831. General assignment for benefit of creditors.

§ 832. Admission of insolvency and consent to bankruptcy.

§ 828. (Bankruptcy, Sec. 38.) Fraudulent transfers.

(1) Definition.

Case 792. Bankruptcy Law, Sec. 3, a, (1).

"[Acts of bankruptcy by a person shall consist of his having]

(1) Conveyed, transferred, or removed, or permitted to be concealed or removed, any part of his property with intent to hinder, delay or defraud his creditors, or any of them."

Question 792: Define the first recited act of bankruptcy.

(Note: Fraudulent transfers and concealments by bankrupts have a bearing in bankruptcy proceedings from three viewpoints.

(1) As acts of bankruptcy (now considered).

(2) As transactions that may be set aside by the trustee (see Chapter 106.)

(3) As bar to discharge (See Chapter 109).)

Case 793. Githens v. Shiffler, 112 Federal Reporter, 505.

ARCHBALD, DISTRICT JUDGE: "The act of bankruptcy charged in this case is the transfer of property with intent to hinder, delay, and defraud creditors. The de

fendants, C. W. Shiffler & Bro., were engaged last spring in the grocery business at Lebanon, Pa., and on April 30th, after some preceding negotiations, sold out their stock of merchandise to Light Bros. for $1,166.42. They were indebted at the time to sundry parties, and among others to the plaintiffs, Githens, Rexsamer & Co., on current bills to the amount of $581, and were insolvent. While negotiations for the sale were in progress, Col. Seltzer, the plaintiffs' attorney, called upon J. H. Shiffler, one of the firm, and demanded payment, and was assured that if he would not make them any trouble by suit, which might interfere with the sale, they would pay him out of the proceeds. After the sale was consummated, however, the defendants not having kept their promise, he called upon them again, complained of his treatment, and asked why they had not done as they agreed, to which they replied that they had paid others who had done them greater favors. The fact was that out of the money realized from the sale they paid $650, the balance due on a note for borrowed money, on which the estate of their father, Levi Shiffler, was surety, and $150 back rent on the store. They also set aside $100 for the support of their aged mother, and kept the rest-some $266-for their own support until they could get other work to do. The sale to Light Bros. was an open and apparently fair one, and was made at the solicitation of that firm, and not of the defendants. The price was fixed by an appraisement, which was closely watched by both parties, and the amount received-$1,166.42-was all the stock was worth, and was paid in cash at the time possession was delivered. The defendants deny that there was any purpose to hinder, delay, or defraud creditors, and, on the contrary, declare that they sold simply because they could not keep up the stock in such shape as to hold customers. The jury have found to the contrary of this—that the sale was fraudulent-and the question is whether the verdict is warranted by the evidence.

"The transfer of property with intent to hinder, delay, and defraud creditors, which is made an act of bank

ruptcy by the statute, is none other than the like fraudulent transfer måde void by St. 13 Eliz., which is itself simply declaratory of the common law. That which, therefore, according to the established course of authority, constituted a fraudulent transfer at the time of the passage of the bankruptcy act, may be regarded as intended to be covered by that act, and nothing more. As long ago as Copis v. Middleton, 2 Madd. 410-430, it was said, "The statute (13 Eliz.) does not deprive a man of the power of selling his estate, or doing what he pleases with the purchase money;' and in Darvill v. Terry, 6 Hurl. & N. 807, relying on Wood v. Dixie, 7 Q. B. 892, it was decided that a bill of sale by way of mortgage of personal chattels, if executed as security for money actually lent, is not fraudulent and void within St. 13 Eliz., though its object is to defeat the expected execution of a judgment creditor. It was further held in Ex parte Stubbins, 17 Ch. Div. 58-quite in line with the case in handthat a sale of goods for cash, the seller intending to use the purchase money in making a voluntary payment, was not a fraudulent transfer within the meaning of the English bankruptcy act. 'But it was pressed upon us,' says James, L. J., ‘that the transfer of goods to a purchaser for value with the view of using the purchase money for a voluntary preference, the purchaser knowing this intention, was a fraudulent conveying away or transfer within the meaning of the sixth section of the (bankruptcy) act (32 & 33 Vict. c. 71). It appears to me that that view cannot be sustained. In truth, a mere voluntary transfer, impeachable only on the ground that it is a preference to a particular creditor, has never been held to be in itself a fraud, or an act of bankruptcy. It may be impeached on the ground that it is voluntary, but it is impossible, as it appears to me, to hold that a mere voluntary transfer is of itself an act of fraud; and, if this is not fraudulent within any principle of law, it would be equally impossible to say that a sale becomes fraudulent because there is an intention in the mind of the vendor to use the purchase money for the purpose of making a

voluntary preference, and the purchaser knows that that is the motive of the sale and the intention of the vendor with reference to the proceeds of the sale. It appears to me that it would be an extravagant extension of the doctrine of fraud on the bankrupt law to hold that such a sale, under such circumstances, is of itself a fraudulent act, or an act of bankruptcy.' Taking this to be the law, the present verdict cannot be sustained. It is no doubt true that, even though the sale of their property by the defendants was for a full consideration, if really made for the purpose of putting it out of the reach of creditors it was fraudulent (Ferris v. Irons, 83 Pa. 179); and we may take into consideration as well that which occurred after as that which preceded the transaction in passing upon it. Yet, even so, there is nothing in the case to give it any such fraudulent character. The most that can be said against it is that the defendants used the proceeds of the sale to prefer certain of their creditors, and to meet their own personal needs, instead of distributing it pro rata among all whom they owed. But, so far as they paid some debts to the exclusion of others, they were strictly within the authority given them by the common law, however it may be to the contrary in bankruptcy; and, while the payment of the back rent, or of the debt for which their father's estate was surety, was undoubtedly a preference which the bankrupt law would avoid, it cannot be said to establish an intent through the medium of the sale to hinder, delay, or defraud their other creditors, even though they had such a preference in mind from the beginning (Ex parte Stubbins, 17 Ch. Div. 58); or, in other words, an intent to prefer is not to be confounded with an intent to defraud, nor a preferential transfer with a fraudulent one. Nor can a fraudulent intent be made out of the setting aside of $100 for the support of their mother, or the retention of two hundred and sixty-odd dollars to meet their own personal needs. The one was not only a filial, but a legal, obligation, if, as we assume, their mother had need of it. Nor were they bound to strip themselves of their last dollar,