(after stating the facts as above). [1] The petition against the mother and sister directly alleges that the conveyance was made by Hamilton with intent to hinder, delay, and defraud his creditors, but does not say that the grantees participated in this intent. It then proceeds to allege that the deed was within the four months period and constituted a preference, but omits any statement that the recipients were chargeable with notice that a preference would result — a fatal omission on this theory. Carey v. Donohue (C. C. A. 6) 209 Fed. 328, 126 C. C. A. 254. However, we pass by-any question of pleading and come to the merits.
[2, 3] The distinction between a fraudulent conveyance, voidable under section 67e, and a preference, denounced by section 60b has been often stated, most lately and most clearly in the Van Iderstine Case, 227 U. S. 575, 582, 33 Sup. Ct. 343, 57 L. Ed. 652. At least since that decision, it cannot be doubted that a conveyance which is a preference under section 60b, is not, therefore, and merely therefore, fraudulent under section 67e. Conceivably, there may be other elements of intent which will give it also the latter character; but the intent to prefer reached by one section is not, ipso facto, the intent to defraud reached by the other. The record here is barren of evidence indicating this distinct and characteristic intent to commit a fraud by the deed to the mother and sister. The existence and good faith of their debt against Hamilton are not questioned. That the property conveyed was fairly worth just about the amount at which it was taken over is practically conceded. Their only offense is that they accepted partial payment of an honest debt when it was offered, and this is not fraud.
[4] Upon the matter of preference, the only question is whether they had the condemnatory knowledge; everything else is clear. Here the trustee has not met the burden of proof resting upon him. Interest had been regularly paid; Hamilton told them he would rather give them some property and get rid of his interest burden; they had a sentimental desire to own some land; they looked into the value and agreed on a price; and the deal was made. They did not live in the family with him, but apart; they had no knowledge of his other transfers, nor any reason to think him insolvent; and the inference that they knew (had reasonable cause, etc.) they would get their pay, while others would fare worse, rests only on suspicion — an insufficient foundation. The decree in No. 2925 must be reversed, and the court below instructed to dismiss the petition.
[5] In the other case, No. 2926, the petition, which was treated as *445a bill of complaint, is subject to the same infirmities as in No. 2925, but they may be passed by. We should hesitate to find that the turning over of the $3,000 to Mrs. Hamilton was with intent to defraud creditors, as distinguished from an intent to prefer one legitimate creditor over others, if that were the controlling question. While the giving of the note to her was the revival of an indebtedness long barred by the statute of limitations, yet, if it honestly existed, there was nothing inherently fraudulent in recognizing it and paying it; but we think it unnecessary to determine this specific branch of the case.
[6-8] In spite of the recognized distinction to which we have referred between transactions which are merely preferences and those which are intended to hinder, delay, and defraud, it is pointed out in Dean v. Davis, 242 U. S. 438, 444, 37 Sup. Ct. 130, 61 L. Ed. 419, that what begins as a preference may end as a fraud. Treating this, the latest decision of the Supreme Court, as not intended to modify or limit the holding of the Van Iderstine Case, we think the principle must be that while there is nothing fraudulent merely in the giving of a preference which is and remains subject to effective attack and neutralization, if as a preference it violates the Bankruptcy Raw, yet, when the preferential transaction is so manipulated, or when it is carried along into such later steps, as to attempt to defeat the recovery of the preference by the trustee, it results that the parties are engaged in an attempt to defeat the intended operation of the Bankruptcy Law itself, and they have placed themselves within the condemnation of section 67e. This payment to Mrs. Hamilton was at least preferential. There is no room to doubt that she knew of, and, indeed, participated in, the series of nearly simultaneous transactions by which Mr. Hamilton was divesting himself of practically all his property for the payment of part of his debts, and that she knew he was leaving a large part unpaid and unsecured. It follows that the preferential payment ■was voidable as against her and the money could have been recovered from her, if it had remained in her hands; and it follows, also, that any aitempt by her to put it beyond the reach of a possible action by a possible trustee was voidable, as being in hindrance and defeat of that portion of the Bankruptcy Law which contemplated that the trustee should recover such preferences. It follows, too, upon familiar principles, that property transferred by a conveyance of this character can be recovered from any one who is not a purchaser in good faith and for value, and that the burden rests upon the person claiming to be such purchaser to show that he paid value.
[9] At once, upon receipt of the $3,000, Mrs. Hamilton loaned $2,000 to her son, taking his note; and almost immediately (after a transaction immaterial because abandoned) she took from Mrs. Simpson a deed to 40 acres of timber land in Missouri, and gave Mrs. Simpson her remaining $1,000 of money, the $2,000 note against the son and a mortgage back on the Missouri land for $1,000. There was no evidence about the value of this land. Neither Mr. or Mrs. Simpson nor Mr. or Mrs. Hamilton had ever seen it, and no one of them seemed to have any definite information about it. We do not need to go so far as to say that we cannot believe the transaction was in good *446faith; it is enough to say that there is no sufficient reason to think that the land was worth a dollar more than the amount of the mortgage given back upon it, and that, since the burden was upon the Simpsons to show that they paid value, they cannot complain if it is held that they have not established this position.
[10] The Simpsons complain because the decree against them is based, in part, upon testimony which had been offered and received in No. 2925, but not in No. 2926. The cases were tried together, and there is some confusion on this subject; but we do not see anything materially prejudicial to the Simpsons. The testimony in question concerned the dealings between Mr. and Mrs. Hamilton and supported the conclusion that the transfer of the money to her was preferential, and, in the sense above explained, fraudulent. Since we find that the Simpsons cannot be considered good faith purchasers, they are not so vitally concerned in the perfection of the case against Mrs. Hamilton that we ought to reverse the case for the error — if error there was — in not requiring this same testimony to be taken over again in the second case.
In view of the conclusions we have expressed, it becomes immaterial to consider other questions discussed in the briefs.
The decree below, in this case, No. 2926, is affirmed, with costs.
Although not raised by counsel, the question obtrudes itself whether the values of Mrs. Hamilton’s dower and homestead rights have been properly preserved to her. See Re Lingafalter (C. C. A. 6) 181 Fed. 24, 104 C. C. A. 38, 32 L. R. A. (N. S.) 103. In two conveyances, we infer that she released her dower, and, in the third instance, it would merge. All seem to have been part of the transaction by which she was getting payments made to her; but now these payments are in effect taken away from her. The affirmance is, therefore, with the condition that the court below permit such modification in this respect as Mrs. Hamilton’s rights may require, if, indeed, she has any equity to compensation which she has not lost by her conduct in the matter or by nonclaim.