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    WILSON BROS. v. NELSON, 183 U.S. 191 (1901)

    U.S. Supreme Court

    WILSON BROS. v. NELSON, 183 U.S. 191 (1901)

    183 U.S. 191

    WILSON BROTHERS, a Corporation, and Jacob Kahn, Henry Kahn, Jacob Wohlbach, Copartners under the Name of Kahn Brothers & Company, and A. W. Becker, Harry L. Mayer, Joseph Mayer, and Henry B. Mayer, Copartners under the Firm Name of Becker, Mayer, & Company, Appts.,
    v.
    CASSIUS B. NELSON.
    No. 31.

    Argued March 20, 1901

    Restored to Docket with Leave to Submit on Briefs April 8, 1901.
    Submitted April 22, 1901.
    Decided December 9, 1901.

    The circuit court of appeals for the seventh circuit certified to this court the following statement of facts and questions of law:

    Messrs. Harrison Musgrave, J. M. Flower, and D. K. Tenney for appellants.

    Messrs. Wm. F. Vilas and R. M. Bashford for appellee.

    Mr. Justice Gray delivered the opinion of the court:

    On February 5, 1885, Nelson, in consideration of so much [183 U.S. 191, 194]   money then lent to him by Sarah Johnstone, executed and delivered to her his promissory note for the sum of $8,960, payable in five years, with interest until paid. Attached to that note was an irrevocable power of attorney, executed by Nelson, in the usual form, authorizing any attorney of a court of record in his name to confess judgment thereon after its maturity. The interest on the note was paid until November 1, 1898. At that date Nelson, as he well knew, was, and long had been, and ever since continued to be, insolvent. On November 21, 1898, Sarah Johnstone caused judgment to be duly entered in a court of Wisconsin upon the note and the warrant of attorney for the face of the note and costs. Upon that judgment, execution was issued to the sheriff, who on the same day levied on Nelson's goods, and on December 15, 1898, sold the goods by auction, and applied the proceeds thereof in part payment of the judgment. This proceeding left Nelson without means to meet any other of his obligations. The judgment was entered and the levy made without the procurement of Nelson and without his knowledge or consent. The judgment and levy were unassailable in law, and could not have been vacated or discharged by any legal proceedings, except by his voluntary petition in bankruptcy. On December 10, 1898, a petition in bankruptcy was filed against Nelson; and the questions certified present, in various forms, the question whether Nelson committed an act of bankruptcy within the meaning of 3, cl. 3, of the bankrupt act of 1898.

    In considering these questions, strict regard must be had to the provisions of that act, which, as this court has already had occasion to observe, differ in important respects from those of the earlier bankrupt acts. Bardes v. First Nat. Bank, 178 U.S. 524 , 44 L. ed. 1175, 20 Sup. Ct. Rep. 1000; Bryan v. Bernheimer, 181 U.S. 188 , 45 L. ed. 814, 21 Sup. Ct. Rep. 557; Wall v. Cox, 181 U.S. 244 , 45 L. ed. 845, 21 Sup. Ct. Rep. 642; Pirie v. Chicago Title & T. Co. 182 U.S. 438 , 45 L. ed. 1171, 21 Sup. Ct. Rep. 906.

    In 3 of the bankrupt act of July 1, 1898, chap. 541, acts of bankruptcy are defined as follows: 'Acts of bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, any part of his property with intent to hinder, delay, or defraud his creditors, or any of them; or (2) transferred, while insol- [183 U.S. 191, 195]   vent, any portion of his property to one or more of his creditors, with intent to prefer such creditors over his other creditors; or (3) suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings and not having, at least five days before a sale or final disposition of any property affected by such preference, vacated or discharged such preference; or (4) made a general assignment for the benefit of his creditors; or (5) admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground.' [ 30 Stat. at L. 544.]

    In the first and second of these an intent on the part of the bankrupt, either to hinder, delay, or defraud his creditors, or to prefer over other creditors, is necessary to constitute the act of bankruptcy. But in the third, fourth, and fifth no such intent is required.

    The third, which is that in issue in the case at bar, is in these words: '(3) suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings, and not having, at least five days before a sale or final disposition of any property affected by such preference, vacated or discharged such preference.'

    By the corresponding provision of the bankrupt act of 1867, any person who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, 'procures or suffers his property to be taken on legal process, with intent to give a preference to one or more of his creditors,' 'or with the intent, by such disposition of his property, to defeat or delay the operation of this act,' was deemed to have committed an act of bankruptcy. Act of March 2, 1867, chap. 176, 39, 14 Stat. at L. 536; Rev. Stat. 5021.

    The act of 1898 differs from that of 1867 in wholly omitting the clauses, 'with intent to give a preference to one or more of his creditors' or 'to defeat or delay the operation of this act;' and in substituting for the words 'procures or suffers his property to be taken on legal process,' the words 'suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings,' and not having, five days before a sale of the property affected, 'vacated or discharged such preference.' [183 U.S. 191, 196]   There is a similar difference in the two statutes in regard to the preferences declared to be avoided.

    The act of 1867 enacted that if any person, being insolvent, or in contemplation of insolvency, within four months before the filing of the petition by or against him, 'with a view to give a preference to any creditor or person having a claim against him, or who is under any liability for him, procures or suffers any part of his property to be attached, sequestered, or seized on execution,' or makes any payment, pledge, or conveyance of any part of his property, the person receiving such payment, pledge, or conveyance, or to be benefited thereby, 'or by such attachment,' having reasonable cause to believe that such person is insolvent and that the same is made in fraud of this act, the same should be void and the assignee might recover the property. Act of March 2, 1867, chap. 176, 35, 14 Stat. at L. 534; Rev. Stat. 5128.

    The corresponding provisions of the act of 1898 omit the requisite of the act of 1867, 'with a view to give a preference.'

    Section 60 of the act of 1898, relating to 'preferred creditors,' begins by providing that 'a person shall be deemed to have given a preference, if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.'

    Section 67, relating to 'liens,' provides, in subd. c, as follows: 'A lien created by, or obtained in, or pursuant to, any suit or proceeding at law or in equity, including an attachment upon mesne process, or a judgment by confession, which was begun against a person within four months before the filing of the petition in bankruptcy by or against such person, shall be dissolved by the adjudication of such person to be a bankrupt, if (1) it appears that said lien was obtained and permitted while the defendant was insolvent, and that its existence and enforcement will work a preference, or (2) the party or parties to be benefited thereby had reasonable cause to believe the defendant [183 U.S. 191, 197]   was insolvent and in contemplation of bankruptcy, or (3) that such lien was sought and permitted in fraud of the provisions of this act.'

    The same section provides, in subd. f, 'that all levies, judgments, attachments, or other liens obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void, in case he is adjudged a bankrupt.' This provision evidently includes voluntary, as well as involuntary, bankrupts; for the 1st clause of the 1st section of the act, defining the meaning of words and phrases used in the act, declares that "a person against whom a petition has been filed' shall include a person who has filed a voluntary petition.'

    Taking together all the provisions of the act of 1898 on this subject, and contrasting them with the provisions of the act of 1867, there can be no doubt of their meaning.

    The 3d clause of 3, omitting the word 'procure,' and the phrase 'intent to give a preference,' of the former statute, makes it an act of bankruptcy if the debtor has 'suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings,' and has not 'vacated or discharged such preference' five days before a sale of the property. By 60 he is 'deemed to have given a preference' if, being insolvent, he had 'suffered a judgment to be entered against himself in favor of any person, . . . and the effect of the enforcement of such judgment . . . will be to enable any one of his creditors to obtain a greater percentage of his debt' than other creditors. By 67, subd. c, a lien obtained in any suit, 'including an attachment upon mesne process, or a judgment by confession,' begun within four months before the filing of the petition in bankruptcy, is dissolved by the adjudication in bankruptcy, not only if 'such lien was sought and permitted in fraud of the provisions of this act,' but also if 'its existence and enforcement will work a preference.' And by subd. f of the same section 'all levies, judgments, attachments, or other liens obtained through legal proceedings against a person who is insolvent,' within the four months, [183 U.S. 191, 198]   shall be deemed null and void in case he is adjudged a bankrupt.

    The act of 1898 makes the result obtained by the creditor, and not the specific intent of the debtor, the essential fact.

    In the case at bar, the warrant of attorney to confess judgment was indeed given by the debtor nearly thirteen years before. But being irrevocable and continuing in force, the debtor thereby, without any further act of his, 'suffered or permitted' a judgment to be entered against him, within four months before the filing of the petition in bankruptcy, the effect of the enforcement of which judgment would be to enable the creditor to whom it was given to obtain a greater percentage of his debt than other creditors; and the lien obtained by which, in a proceeding begun within the four months, would be dissolved by the adjudication in bankruptcy, because 'its existence and enforcement will work a preference.' And the debtor did not, within five days before the sale of the property on execution, vacate or discharge such preference, or file a petition in bankruptcy. By failing to do so, he confessed that he was hopelessly insolvent, and consented to the preference that he failed to vacate.

    The cases on which the appellee relies, of Wilson v. City Bank, 17 Wall. 473, 21 L. ed. 723; Clark v. Iselin, 21 Wall. 360, 22 L. ed. 568; and Tenth Nat. Bank v. Warren, 96 U.S. 539 , 24 L. ed. 640, have no application, because they were decided under the act of 1867, which expressly required the debtor to have acted with intent to give a preference.

    The case of Buckingham v. McLean, 13 How. 150, 14 L. ed. 90, arose under the still earlier bankrupt act of August 19, 1841, chap. 9, 2 (5 Stat. at L. 442). And the point there decided was that a power of attorney to confess a judgment was an act of the bankrupt creating a 'security,' which that bankrupt act in express terms declared void only if made in contemplation of bankruptcy and for the purpose of giving a preference or priority over general creditors.

    The careful change in the language of all the provisions of the bankrupt act of 1898 from those of the former bankrupt acts upon the subject must have been intended by Congress to prevent a debtor from giving a creditor an irrevocable warrant of attorney which would enable him, at any time during the in- [183 U.S. 191, 199]   solvency of the debtor, and within four months before a petition in bankruptcy, to obtain a judgment and levy the execution on all the property of the bankrupt, to the exclusion of his other creditors.

    The answer to the second and third questions certified must be that the judgment so entered and the levy of the execution thereon were a preference 'suffered or permitted' by Nelson, within the meaning of clause 3 of 3 of the bankrupt act; and that the failure of Nelson to vacate and discharge, at least five days before the sale on execution, the preference so obtained, was an act of bankruptcy; and it becomes unnecessary to answer the first question.

    Second and third questions answered in the affirmative.

    Mr. Justice Shiras dissenting:

    On February 5, 1885, Cassius B. Nelson made and delivered to Sarah Johnstone his promissory note for the sum of $8,960, payable in five years, with interest at the rate of 4 cent per annum until paid. To this note was attached an irrevocable power of attorney, duly executed by said Nelson under his hand and seal in the usual form, authorizing any attorney of any court of record in his name to confess judgment thereon after maturity of the note. This note was given for so much money at the time loaned to Nelson. The interest on the note was paid from time to time up to the 1st day of November, 1898.

    On November 21, 1898, Sarah Johnstone caused judgment to be duly entered in the circuit court of the county of Dane, state of Wisconsin, against said Nelson upon the note and warrant of attorney aforesaid for the sum of $8,975. Upon that judgment, execution was immediately issued out of the court to the sheriff of that county, who levied upon the stock and goods of Nelson, and on December 15, 1898, sold the same at public auction, and applied the proceeds thereof, to wit, the sum of $4,400, upon and in part payment of the judgment so rendered. [183 U.S. 191, 200]   It is admitted that such a judgment note was, at the time it was made and delivered under the law of the state of Wisconsin, a legal and usual form of security for money loaned. McCaul v. Thayer, 70 Wis. 138, 35 N. W. 353; Second Ward Sav. Bank v. Schranck, 97 Wis. 250, 39 L. R. A. 569, 73 N. W. 31, 37.

    It is also admitted that the judgment was executed and the levy made without the procurement of Nelson and without his knowledge or consent, and that such judgment was not subject to attack by Nelson, and could not have been vacated or discharged by any legal proceedings which might have been instituted by him; nor could the levy issued under the execution have been set aside or vacated by Nelson, unless his filing his voluntary petition in bankruptcy prior to the sale, and obtaining an adjudication of bankruptcy thereunder, would have had that effect, or by payment of the judgment.

    On December 10, 1898, creditors of said Nelson filed a petition in involuntary bankruptcy against him in the district court of the United States for the western district of Wisconsin. The act of bankruptcy therein alleged was in substance that while insolvent he suffered and permitted the said Sarah Johnstone, one of his creditors, to obtain preference upon his property, through legal proceedings, by the entry of said judgment and the levy thereunder upon his stock of goods, and failed to vacate or discharge the preference obtained through such legal proceedings at least five days before the sale of the property under such judgment and execution. Upon issue joined, the district court ruled that Nelson had not, by reason of the premises, committed an act of bankruptcy, and dismissed the petition. An appeal was taken to the United States circuit court of appeals for the seventh circuit, and that court had certified certain questions for the consideration of this court.

    The essential question in the case is whether, under the facts disclosed, Nelson was guilty of an act of bankruptcy in failing to file a petition in voluntary bankruptcy. This question must be answered in the negative if we respect previous decisions of this court in similar cases.

    The subject was considered in Buckingham v. McLean, 13 How. 151, 14 L. ed. 91. The case arose under the bankrupt act of 1841, [183 U.S. 191, 201]   and it appeared that one John Mahard had (on April 7, 1842) executed a power of attorney to confess judgment in favor of Buchingham for $14,000; judgment was entered the next day; execution was issued April 20, and levy was made and sale of property, real and personal. On May 27, 1842, Mahard petitioned to be declared a bankrupt.

    There were other questions in the case, but Mr. Justice Curtis, in his discussion of the question now before us, and speaking for the court, made the following observations:

    This suggestion of Justice Curits was justified by provisions contained in the bankruptcy acts of 1867 and 1898, which enacted that liens obtained by attachments upon mesne process, or judgment by confession, within four months before the filing of the petition in bankruptcy by or against the creditor, shall be dissolved by the adjudication of the debtor to be a bankrupt, if it appear that such a lien was procured or suffered, obtained and permitted, while the debtor was insolvent and contemplating bankruptcy, the party or parties to be benefited thereby having reasonable cause to believe that the debtor was insolvent and in contemplation of insolvency. But, as we shall presently see, such provisions do not affect the question before us now.

    In Wilson v. City Bank, 17 Wall. 473, 21 L. ed. 723, decided under the provisions of the act of 1867, it was held that something more than passive nonresistance in an insolvent debtor is necessary to invalidate a judgment and levy on his property when the debt is due and he has no defense; and that in such case there is no legal obligation on the debtor to file a petition in bankruptcy to prevent the judgment and levy, and a failure to do so is not sufficient evidence of an intent to give a preference to the judgment creditor, or to defeat the operation of the bankrupt law. In his opinion, discussing the facts of the case, Mr. Justice Miller said:

    The principles of this case were approved and applied in Clark v. Iselin, 21 Wall. 360, 22 L. ed. 568, where it was held that the giving by a debtor, for a consideration of equal value, passing at the time, of a warrant of attorney to confess judgment, is not an act of bankruptcy, though such warrant or confession be not entered of record, but be kept as such things usually are, in the creditor's own custody, and with their existence unknown to others; that the creditor may enter judgment of record thereon when he pleases, even upon insolvency apparent, and issue execution and sell; and that his action is valid and not in fraud of the bankrupt law, unless he is assisted by the debtor.

    The facts of that case were, in respect to the question before us, similar to those of the present. In the opinion Mr. Justice Strong, after citing with approval Wilson v. City Bank, said:

    Similar views prevailed in Tenth Nat. Bank v. Warren, 96 U.S. 539 , 24 L. ed. 640, where it was held that the mere nonresistance of a debtor to judicial proceedings in which a judgment was rendered against him, when the debt was due and there was no valid defense to it, it is not the suffering and giving a preference under the bankrupt act, and that the judgment is not avoided by the facts that he does not file a petition in bankruptcy, and that his insolvency was known to the creditor.

    As, then, the power of attorney given by Nelson to Mrs. Johnstone was a valid security, customary under the law of Wisconsin, as it was given long before the passage of the bankrupt act of 1898, and therefore necessarily without regard to the provisions of that act and without any intention to prevent or defeat their operation, and as the entry of the judgment and the levy of the execution are conceded to have been without the knowledge or consent of Nelson, it is undeniable that, under the provisions of the bankrupt act of 1867, and within the principles laid in Buckingham v. McLean, Wilson v. City Bank, Clark v. Iselin, and Tenth Nat. Bank v. Warren, Nelson was under no obligation, legal or moral, to bring upon himself the ruin necessarily occasioned by a decree of bankruptcy, by filing a voluntary petition, and that the questions certified to us by the circuit court of appeals should be answered in the negative.

    But it is claimed that, having regard to the phraseology of the act of 1898, and although the warrant to confess judgment [183 U.S. 191, 211]   was given by the debtor before the passage of that act, yet, being irrevocable and continuing in force, the debtor thereby, without any further act of his, suffered or permitted a judgment to be entered against him within four months before the filing of the petition in bankruptcy, and that he confessed that he was hopelessly insolvent, and consented to the preference that he failed to vacate, by failing to file a voluntary petition.

    Such a contention, in view of the various decisions of this court and hereinbefore cited, could not have been heretofore maintained, and it is therefore imperative that those who now urge it should be able to point to some clear and unmistakable declaration in the existing statute. So important a change in the policy of the bankrupt law must be manifested by explicit language, and cannot be, safely and with due regard to sound principles of interpretation, made to depend upon conjecture and inference based upon a mere difference in phraseology between the present and prior acts of bankruptcy. In other words, the question before us must be decided by a consideration of the language actually used in the act of 1898, interpreted in the light of the previous decisions of this court.

    We are concerned in the present case with 3 of the act of 1898, which deals with and describes acts of bankruptcy. The section is headed 'Acts of Bankruptcy,' and then sets forth what are deemed to be the acts of bankruptcy, as follows:

    Black's Law Dictionary describes 'an act' as follows: 'In a more technical sense, it means something done voluntarily by a person, and of such a nature that certain legal consequences attach to it. Thus, a grantor acknowledges the conveyance to be 'his act and deed,' the forms being synonymous.'

    Independently of dictionary definitions, it may be safely said that, in common usage and understanding, the word 'act' signifies something done voluntarily, or, in other words, the result of an exercise of the will.

    In view, then, of the plain meaning of the language of the clause and of its association, in the section, with other acts which require affirmative and voluntary proceedings on the part of the debtor, it would seem to be clear that mere failure by a debtor, even if insolvent, to file a voluntary petition in bankruptcy, is not in itself, under the facts conceded to exist in this case, an 'act of bankruptcy.'

    Indeed, it seems quite clear that if 3 of the act of 1898 had been the first enactment by Congress on the subject, no one would ever have suggested the contrary view. The [183 U.S. 191, 213]   contention is mainly, if not wholly, founded on the omission of several words used in the previous statutes, or rather in the substitution of different words in 3 for those used in the corresponding seetions of the earlier laws. Those changes may be made best to appear by presenting them in parallel columns:

    ACT OF 1867:

    Sec. 39. That any person . . . who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, shall . . . procure or suffer his property to be taken on legal process, with intent to give a preference to one or more of his creditors, . . . or with the intent by such disposition of his property to defeat or delay the operation of this act, . . . shall be deemed to have committed an act of bankruptcy.

    Sec. 35. That if any person, being insolvent or in contemplation of insolvency, within four months before the filing of the petition by or against him, with a view to give a preference to any creditor or person having a claim against him, or who is under any liability for him, procures any part of his property to be attached, sequestered, or seized on execution, or makes any payment, pledge, assignment, transfer, or conveyance of any part of hisproperty, either directly or indirectly, absolutely or conditionally, the person receiving such payment, pledge, assignment, transfer or conveyance, or to be benefited thereby, or by such attachment [payment, pledge, assignment or conveyance], having reasonable cause to believe such person is insolvent, and that such attachment, payment, pledge, assignment, or conveyance is made in fraud of the provisions of this act, the same shall be void.

    Sec. 29. . . . No discharge shall be granted . . . if the bankrupt . . . within four months before the commencement of such proceedings , . . . has procured his lands, goods, money or chattels to be attached, sequestered or seized on execution.

    [183 U.S. 191, 214]   ACT OF 1898:

    Sec. 3. Acts of bankruptcy by a person shall consist of his having . . . suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings, and not having, at least five days before a sale or final disposition of any property affected by such preference, vacated of discharged such preference.

    Sec. 60. A person shall be deemed to have given a preference, if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.

    Sec. 67. . . . A lien created by, or obtained in, or pursuant to, any suit or proceeding at law or in equity, including an* attachment upon mesne process, or a judgment by confession, which was begun against a person within four months before the filing of a petition in bankruptcy by or against such person, shall be dissolved by the adjudication of such person to be a bankrupt, if (1) it appears that said lien was obtained and permitted while the defendant was insolvent, and that its existence and enforcement will work a preference, or (2) the party or parties to be benefited thereby had reasonable cause to believe the defendant was insolvent, and in contemplation of bankruptcy, or (3) that such lien was sought and permitted in fraud of the provisions of this act. . . .

    That all levies, judgments, attachments, or other liens obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be deemed null and void in case he is adjudged a bankrupt.

    It having been repeatedly ruled in the cases cited that, under these provisions of the act of 1867, no person shall be deemed guilty of an act of bankruptcy except by reason of some affirmative and intentional act intended to defeat the purposes of the act, and that failing to file a voluntary petition in [183 U.S. 191, 215]   bankruptcy where a creditor is pursuing, in a state court, a lawful remedy on a lawful security given and received before the act of bankruptcy was passed, and without any knowledge or consent by the debtor to such suit or proceeding, is not an act of bankruptcy, it is now contended that a different conclusion must be reached under the provisions of the act of 1898.

    Examination and comparison of the above contrasted provisions will show, as I think, that no change was made by the latter enactment in the vital and decisive purpose that no person shall be visited with the penalty of involuntary bankruptcy, unless he has brought himself within the denunciation of the law by some intentional and voluntary act, and that, this being so, the decisions under the previous act, that merely failing to file a voluntary petition is not such voluntary and intentional act in fraud of the statute, are applicable and decisive of the present case.

    Arguments based on supposed differences between 'permit' and 'suffer' and 'procure' are too uncertain on which to find that a great and important change in the theory of the bankrupt law was intended by Congress. Such an intention would have been directly and clearly expressed, and not left to uncertain inferences. That such inferences are uncertain plainly appears by the opposite conclusions reached, in respect to the meaning of the clauses in question, by the learned judges of the district and circuit courts. See Re Moyer, 93 Fed. 188; Re Thomas, 103 Fed. 272; Re Nelson, 98 Fed. 77; Duncan v. Landis, 45 C. C. A. 666, 106 Fed. 839.

    The case of Pirie v. Chicago Title & T. Co. 182 U.S. 438 , 45 L. ed. 1171, 21 Sup. Ct. Rep. 906, the most recent decision of this court under the act of 1898, arose under another clause of the act, and is not directly applicable to the question we have here considered, but, so far as it has any bearing, sustains the views herein expressed. The question there was under 60, and it was held that where a payment or transfer was made by an insolvent debtor, within four months prior to the filing of a petition in bankruptcy, to a creditor who did not have cause to believe that an unlawful preference was intended, the creditor may keep the [183 U.S. 191, 216]   payment or transfer, even though the amount of such payment or transfer was thereby withdrawn from the administration of the bankrupt court and satisfaction in full was received by the creditor, but that if such payment was only a partial discharge of his debt the creditor cannot prove, under the distribution in bankruptcy, for the balance of his debt, unless he first surrenders to the trustee the amount of the partial payment.

    The conclusion warranted by the words of the statute, interpreted in this light of our previous decisions, is that the questions certified to us by the circuit court of appeals should be answered in the negative.

    The Chief Justice, Mr. Justice Brewer and Mr. Justice Peckham concur in this dissent.

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