Page:Federal Reporter, 1st Series, Volume 5.djvu/309

BWAN ». EOBINSON. 297 �niture, as was also the bankrupt ; and in no sense can such a transfer of stock as aforesaid be said ta have been in the bankrupt's ordinary course of business. " �5. It will be noted that there is a outrent of decisions establishing the proposition that a debtor's inability to pay liabilities as they fall due in the course of business consti- tutes insolvency within the meaning of the bankrupt act, andj in the administration of this law by the courts, individuals must be held to kncwledge of this fact. Now, in the present instance, the complainants had this actual knowledge brought home to them of insolvency; for they carried the protested paper of the bankrupt to the amount of $1, 146.78, whiohfell due, the one note of $300 on the sixteenth of July, 1873, and the othe'r of $846.78 on July 22, 1873, both of which remained in the hands of the complainants unpaid, and were part con- sideration for the sale and transfer of the stock aforesaid. �6. It is in evidence not only that Clark vras in close consul- tation with Graves about his business difficulties and embar- rassments for sometime prior to the said transfer, but that he agreed to a joint assignee for the benefit of ail Graves' cred- itors, and acted as such subsequently to the first of August, 1873, under an assignment aetually made. Now, while this assignment was made after the time of the transfer of stock, it was so near thereto that it may be taken as a strong fact to show the actual knowledge, and opportunities of knowl- edge, Clark had of Graves' affairs on the first of August, i. e.^ the date of the transfer of the stock. �From these considerations, and others which might be adduced were it necessary, the court finds, as matter of fact, that the complainants, at the time they received the said transfer of stock, did have reasonable cause to believe Graves, the bankrupt, was insolvent, and that said transfer was made by the said Graves in fraud of the provisions of the bank- rupt act. �It is sufficient, for the purpose of deciding this suit, to pass upon the proper construction of section 5128 as affecting this- case, and the court will lûake no further inquiry as to Uow ����