Page:Federal Reporter, 1st Series, Volume 10.djvu/137

PADDOCK V. FISH. 125 ���DECEEE. In the matter of Lonsdale & Thompson, Bankrupta. �The demurrer of the bankrupt George G. Thompson to the petition of Thomas H. Allen & Co., to vacate and annul the discharge of the said bankrupt, is sustained, so far as the said petition seeks to vacate the discharge for want of jurisdiction in the court to entertain the original bankruptcy petition ; but so far as it seeks to vacate the dis- charge for want of notice to the crediter s, under section 5109 of the Revised Statutes, of the separate application for discharge, the said demurrer is overruled, and the bankrupt bas leave to answer the said petition within 10 days from this date, or it will be taken for cou- fessed. AU other matters are reserved. ���Paddock, Assignee, v. Fise and others. (District Court, 8. D. New York. January 20, 1^82 ) �1. Bankruptcy— Praudulbnt Conveyances — Rights of Bona Fide PuKCHASEa �OR Encumbiianceb. �A bona fide purchaser or encumbrancer of property conveyed in fraud of creditors is entitled to protection to the extent of the moneys advanced byliim on the faitliof the title, although hi8 advances were made after the commence- ment of the proceedings in bankruptcy against the fraudaient grantor of which he had no knowledge. �2. Bamb — 8amb. �E. M. C, being insolvent, two months before proceedings in bankruptcy against him conveyed to his mother the house and lot where they bolh lived for a nominal consideration, and in reality for his own future use. A month afterwards he procured his mother to execute a bond and mortgage to his brother, designed to be sold in the market to raise money for the bankrupt's benefit. It was so sold by the brother in the usual course of such sales to L., a bona fide purchaser, who had no acquaintance with or knowledge of E. M. C, or his business or circumstances. The transaction was not closed nor the money paid until two days after the commencement of proceedings in bank- ruptcy against E. M. C. in anotlier district. L.'s transactions were with the brother, and he had no knowledge or notice of the bankruptcy proceedings against E. M. C, or that the mortgage or the money raisod upon it was de- signed for E. M. C.'s beneflt. A part of the money paid by L. to the brother was applied to the payment of taxes on the property, and the rest afterwards paid by the brother to E. M. C. Ileld, that L aciiuired a valid lien against the assignee in bankruptcy to the extent of the money paid for the mortgage, and that the plaintifl is remitted to his remedy for procceds against the bankrupt. �3. USUHY, MUST BE Specially Pleaded. �No question of usury being raised by the pleadings or at the trial, held, that it could not be considered. ��� �