In re Reed

Creditors who accepted a preference from a bankrupt debtor during the operation of the provision of the Revised Statutes, having reasonable cause to believe that the same was made or given by the debtor contrary to the provisions of the bankrupt act, could not prove the debt or claim on account of which the preference was made or given; nor could such a creditor receive any dividend until be bad first surrendered to the assignees all property, money, benefit, or advantage received by him under such preference. Rev. St. § 5084. Congress subsequently amended that provision in certain important…