Page:Federal Reporter, 1st Series, Volume 9.djvu/273

258 FEDERAL REPORTER. �Bkown, Assignee, etc., v. The Jbfpebson County Nat. Bank. {Circuit Court, W. D. New York. June 21, 188:.> �■" BaNKEUPTCT— IliLEGAIi PREFERENCES. �Proof of the existence of a desire on the part of the debtor that a particular crediter may succeed by the usual proceedings in a suit in obtaining a prefer- ence over other creditors, so that such preference may be maintained even as against proceedings in bankruptcy which may be subsequently commenced, is ■ r insufflcient to establish that the debtor procured or sufEered his property to be taken on legal process with intent to prefer such creditor. �2. Bame—Bame— Agent— Notice. �A national bank, having reasonable cause for believing that a party whose paper it had discounted was insolvent, instructed a flrm of attorneys, who were its debtors' attorneys, though of this it was not aware, to proceed tb collect its debt. By the collusion of the debtors they were enabled in due course of judi- cial proceedings to obtain judgments and levy executions before the institution of proceedings in involuntary bankruptcy by the other creditors. Edd, that the knowledge of the attorneys, though unknown to their prinoipals they had peculiar facilities for obtaining information, so long as it was obtained about their employment was the knowledge of the bank, since disclosure would involve no breach of prof essional confidence ; and that the judgments and levies were void as against an assignee in bankruptcy. �G. W. Adams, for plaintiff. �Levi H. Brown, for defendant. �Blatchpobd, C. J. The district judge, in his decision in this case, Bays that "this is evidently a case where the bankrupts, in contem- plation of insolvency, desired to secure their indorsers and the defendant, and, through the advice of their attorneys, concluded to do it by means of judgments and executions," and that "the attorneys employed to bring actions and obtain judgments were the bankrupts' attorneys." The mere existence of a desire on the part of a debtor, however strong such desire, that a particular creditor may succeed by suit, judgment, execution, and levy in obtaining a preference over other creditors, so that such preference may be maintained, even as against proceedings in bankruptcy whieh may be subse- quently commenced, is not sufficient to establish that the debtor pro- cured or suffered his property to be taken on legal process, with intent to prefer such creditor, if the proceedings of the creditor were the usual proceedings in a suit, unaided by any act of the debtor either by facilitating the proceedings as to time or method, or by obstrueting other creditors who otherwise would obtain priority. This doctrine was firmly established by Wilson v. City Bank, 17 Wall. 473, and other cases which succeeded it. The absence of the inhib- ��� �