(after stating the facts as above). The claim of preference arising under the Bankruptcy Act presents no difficulty. The question is one of fact, and a review of the testimony would serve no purpose. Suffice it to say that, if the question were an open one in this court, we would find much difficulty in reaching the conclusion that the claimant knew or had reasonable cause to believe that the payments in question were intended to operate as preferences, and in the face of an adverse finding by the referee, approved by the District Court, the appeal on this branch of the caséis without merit. Arenz v. Astoria Sav. Bank (C. C. A.) 281 Fed. 530 , and cases there cited. Much stress is laid upon the confidential relations that had so long existed between the officers and stockholders of the bankrupt and Carson, Pirie, Scott & Co., but there is no tes *509 timony tending to show that the latter had either notice or knowledge of the insolvency of the bankrupt, or that a preference was intended, and one might readily assume that their past relations would tend to inspire confidence rather than arouse suspicion.

We will next take up the question of'preferential payments or. transfers under the law of the state. The difference between the Bankruptcy Act and tile state law on the question now under consideration was thus stated by the Supreme Court in Williams v. Davidson, 104 Wash. 315, 320 , 176 Pac. 334 , 336:

Under the decisions of the Supreme Court of the state there are two marked differences between a preference under thé Bankruptcy Act and a preference under the state law, where a private corporation is concerned. First, the state court does not accept- or recognize the definition of insolvency contained in the Bankruptcy Act; and, second, if the corporation is insolvent within the meaning of the state law, the good faith of the creditor is of no avail. This latter proposition is controverted by the appellees, but it has been so often announced by the state court that we are not at liberty to disregard it

Under the rule adopted by the state court a private corporation is insolvent when it becomes unable to meet its obligations as they mature in the ordinary course of business. Nixon v. Hendy Machine Works, 51 Wash. 419, 424 , 99 Pac. 11 ; State ex rel. Strohl v. Superior Court, 20 Wash. 545 , 56 Pac. 35 , 45 L. R. A. 177; Jones v. Hoquiam Lum. & Shingle Co., 98 Wash. 172, 176 , 167 Pac. 117 . This condition may arise, of course, before the corporation becomes insolvent within the meaning of the Bankruptcy Act. State ex rel. Strohl v. Superior Court, supra; Jones v. Hoquiam Lum. & Shingle Co., supra.

The converse is equally true, and the corporation may remain solvent under the state law although insolvent under the Bankruptcy Act. Under subdivision “e” of section 67 the debtor must be insolvent as defined by the Bankruptcy Act, and the transfer or payment must be preferential and voidable under the state law. Guided by these, considerations, does the record show preferential payments. The -corporation was pursuing its policy of reducing its stock with a view of disposing of the remainder in bulk as soon as a purchaser could be *510 found. While some of its debts were past due, the creditors were satisfied with the process of liquidation, and no creditor complained until the receiver was applied for in the state court. The corporation was.to all intents and purposes a going concern, discharging its obligations as demanded, arid in our opinion violated no rule of law and no right of creditors in making the payments complained of. In other words, the corporation was not insolvent within the rule upon which tire appellant relies.

The objections to the other claims stand upon the same footing, and we deem it unnecessary to discuss or consider the right of set-off urged in behalf of one of the appellees.

Finding no error in the record, the order or decree of the lower court is affirmed.