Show MCORNICKS CLAIM GOOD II I I HAS PRIORITY IN CASE OF VINA M PHELPS IN BANKRUPTCY Was Secured by a Chattel Mortgage Thomas C Hanlcy of Weber S County Tiles Bankruptcy Petition II I I Tho petition of several of the creditors l credi-tors In the case of Vina M Phelps bankrupt who opiio cd Ito allowance of the claim of 612I l I as i claim against the bankrupts estate entitled to priority was denied by Judge Mar blmll yesterday Mrs Phelps was a merchant in Mcrcur and was owing McCornlck CoB branch bank at that place SCO She also owed other people and borrowed from 3 B Hlekman 5023 given a chattel mortgage on the goods I as security The note was payable ono day after late with interest at 2 percent per-cent until paid and provided that upon default of payment of the debt the mortgagee should take the property I proper-ty Into his possession and sell the same at public or private sale in his discretion dis-cretion The morning after the mortgage mort-gage crulon morninG < took hold of the WUt property recorl sold tho goods in the regular Jpelt nail applied the protcrdR or the Efclcs to bin debt The money received from Ilirkman was deposited J in the bank to the credit of Mrs Phelps and was used to nay the debt lo Mr rornlok Mrs Phelps was at tills time entirely Insolvent Tlie evidence Justifies Jus-tifies t the conclusion that llloknmn actually tually loaned to Mrs Phelps says lie decision the amount secured by the morrgajo The transaction however was out of the ordinary I I course of business I busi-ness and was of Itself sulllclonl 1 In put him upon his gnarl lie must hae S knon Mrs Phelps I was Insolvent Section 35 of the bankrupt law of 1867 in declaring that transfers similar to the one now In question shall ho prima fuolo fraudulent but states a presumption presump-tion of fact which would arise In the absence of a statute All thcf circumstances circum-stances concur to cast suspicion on the good faith of the mortgagee The mortgage mort-gage did not unlawfully prefer him but if the giving of time mortgage was a purl of a schemo to prefer McCor nIck then It must behold I to have boon made with Intent I to hinder delay and I c Jefniud I Illckman had notice of tills intent then the mortgage was in fraud of the act I tills mortgage Is I void I able then the money paid to Molor murk Is Illckmans money and Iliekmon I might be permitted by the court to I bring an action against Mclornlck to I I roeover I The trustee has not avoided i 1 U the claims being brought by others |