Page:Federal Reporter, 1st Series, Volume 9.djvu/287

273 FEDERAL REPORTER. �when asked by them, on material matters, and by misleadiag them as to the bank's suits, and by thereby inducing them not to hasten the bankruptoy proceedings which they had announced they intended to institute. Discussion of the law as to how far the bank is bound by the knowledge of MoCartin & Williams, is rendered unnecesaary by the recent decision in Roc/ers v. Palmer, 102 U. S. 263. In that case an attorney procured a judgment by default in favor of a client against a person of whose insolvency and intent to commit a fraud on the bankruptcy law he had knowledge, and it was held that that knowledge was imputable to the client. The rule laid down in that case is that where a crediter employs an attorney to collect a note the attorney becomes his agent, and the acts of the attorney, and his knowledge obtained in the course of the employment, become the acts and the knowledge of the principal ; and that where the attorney and the debtor are aware of the insolvent condition of the latter, and are co-operating to have his property seized on execution before the bankruptcy law can be enforoed, and with intent to defeat its opera- tion on the debtor 's property, there is a fraud on the bankrupt law where the debtor contributes actively to that end. �The evidence in this case shows such knowledge and eo-operation by H. V. Cadwell and McCartin & Williams, with such intent, and an active contribution to the preferential end by the debtor and the attomeys. To say that the knowledge which came to McCartin & Williams came to them because they were attorneys for the debtors on a prior employment, does not help the case. They were none the less acting for the bank, and the facility they had, through their employment for the debtors, to do just what was done in this case to aecure the preference, is no mitigation; otherwise, all that a creditor seeking a preference need do, is to employ the debtor's prior attor- ney. The assignee in bankruptcy is entitled to the benefit of the principle that the bank is chargeable with the knowledge of what Mo- Cartin & Williams acquired a knowledge of while their employment by the bank was in force, no matter how such knowledge is acquired, and with their acts in pursuance of knowledge so acquired. It can- not vary this principle that the bank may not have known until after the levies that McCartin & Williams were attorney for the debt- ors. The principal is chargeable with the knowledge of the agent, even though ignorant of the peculiar facilities possessed by the agent for acquiring such knowledge. The natural knowledge of Mc- Cartin & Williams as to the insolvency of the Cadwells, and as to their design to prefer the bank, and as to the measures taken which ��� �