Ingram

George M. Marksbury, to whom we will refer as the bankrupt, conducted a general merchandise business at Cottage Grove, Or., for some time prior to June 22, 1927. On the latter date he was heavily indebted, and some of his creditors were threatening suit or attachment. He proceeded to Portland, and conferred with his creditors there with a view of obtaining an extension of credit until January 1, 1928. The matter was taken up with the adjustment bureau of the Portland Association of Credit Men, and, after some discussion, it was agreed that a note, secured by chattel mortgage on his stock of merchandise, should be executed by the bankrupt to secure all his creditors, pending an effort to obtain from them an extension of credit until January 1. Pursuant to this arrangement, a mortgage to secure a note in the sum of $14,970.78 was executed and placed of record. Thereupon the adjustment bureau immediately notified all creditors of the aetion taken by circular letter, setting forth the reasons therefor. At the date of the execution of the mortgage, the bankrupt was indebted to the Bank of Cottage Grove in the sum of $2,500, but, for some reason, this indebtedness was not included in…