Page:Federal Reporter, 1st Series, Volume 4.djvu/641

SOBTON V. BILIilNGS* 627 �knowledge on the part of the vendee, inetead of reasonable cause ofbelief of the fraudaient intent, cannot arise, because if the facts conveyed to Billings the knowledge that it was a fraudulent act, then the only way to escape the consequencea of that knowledge would be to avoid the language of the statute. In other words, to rebut the prima fade case made; and the question is -whether that has been done in this case. �The case of Walbrun v. Bdbhitt, 16 Wall. 577, seems to imply that a sale, such as was made in this case, is within the meaning of the statute; and the opinion of the court declares that the purchaser cannot overthrow the legal pre- Bumption which arises from the fact, by showing that the f ulL value of the property was paid in ignorance of the insolvency of the vendors. The court declares that the presumption of fraud arising from the unusual nature of such a sale can only be overcome by proof on the part of the buyer that he took the proper steps to find out the pecuniary condition of the seller. "AU reasonable means," the court says, "pursued ia good faith, must be used for this purpose." That the trans- fer of the whole of the debtor's property is not in the usual and ordinary course of business, seems to be sustained by numerous authorities, most of which are coUected by Bumj» in the notes to section 5128 of the bankrupt law< �One circumstance ought not to be overlooked in considering the effect of this assignment upon Billings, and that is it waa hardly supposable that a firm engaged in the business of thi» firm would be entirely free from debt. Undoubtedly it would bave been competent for the vendee to show, if such waa tho fact, even if he had knowledge of the insolvency of the firm, that they intended in good faith to use the means acquired from the sale in the payment of their debts, pro rata, among their creditors, because the fact that the vendor is insolvent» and that is known to the vendee, does not of itself render a sale invalid under the bankrupt law. It must appear in addi- tion that the assignment or sale was made with a view to prevent the property from being distributed under the bank- rupt law, or to defeat or impair its provisions, or that the assignment was made in fraud of the law. ����