O'Connor vs. Parker et. al.

O’Connor vs. Parker et. al. -Error to Wayne Circuit; Section 25, of the Bankruptcy Act, makes certain payments void, when made to prefer a cred* itors, Ac. A being insolvent, gave his note endorsed by B to a creditor. In a suit against the endorser, Aid,'that the note was valid, and was not tobe treated as a payment within the meaning of the act. [MAJORITY — Cooley, J.] Opinion by Cooley, J. This was a writ of error brought on a judgment rendered against O’Connor in the Court below as endorser .of a note made by McKinney & Co. The sole defense was that the note was made by McKinney & Co., and accepted by the Parkers in payment of a precedent debt, with the knowledge on the part of all the parties that McKinney & Co. were insolvent; that the giving of the note was with a view to prefer the Parkers as creditors; that McKinney Ss Co. were soon after proceeded against and declared bankrupts, and that by reason of these facts the note and endorsement were altogether void. The Circuit Court held these facts to constitute no defense, and the Supreme Court affirm that decision. The argument of plaintiff in error was that section 25 of the Bankrupt act makes certain payments void when made to prefer a creditor or to defeat the pc bey of the act, and the giving of this note it was said was such a payment. The Court, however, held otherWise, considering that the payments mentioned in the act were those which reduced the means of the debtor and diminished his capability of paying his creditors ratably; not the more changing tho form of an obligation from an account to a note. Judgment affirmed.