106 Ky. 395 | Ky. Ct. App. | 1899
delivered the opinion of the court.
For several years after 1881, Andrew Brown was a dealer in lumber in Buffalo, N. Y., and, through agents, was engaged in removing the timber from a tract of land owned by him in Carter county, Ky. The timber upon that tract having been exhausted, he purchased, in 1885, the timber upon another tract belonging to appellee Gregory and Mrs. Clara E. Smith, and removed his machinery to that tract of land. His business in this State was transacted entirely through agents. In the spring and summer of 1889 be had drawn a number of drafts for sales
It is urged that the court erred in overruling the demurrers, in adjudging the conveyances fraudulent and void, in adjudging that the transfer was made in contemplation of insolvency, and to prefer appellant in a pre-existing claim Ao the exclusion of other creditors, in directing a reference to the master to hear proof and audit claims, and in requiring it and its surety to pay into court the $14,000.
Upon an examination of the record, -there appears no sufficient evidence to support the charge of actual fraud. But it seems sufficiently apparent that the -transfers were made in contemplation of insolvency, and with the design to prefer the appellant bank. At -the time of the transfer, Brown owed the bank over $100,000; and, while the bank a few days later advanced him some $20,000 more, that appears to have been done with a view to enable him to rea
But it does not follow that the appellees are entitled to the relief they sought. It must first be ascertained whether they have debts against Brown; and, second, whether the transaction in New York operates as an assignment for their benefit.
Waiving, for the purposes of dhis opinion, the question of the sufficiency on demurrer of the petitions, and assuming that there is no contest over the claims of any appellee but Gregory, the question arises whether the Kentucky act of 1856 affects the New York transaction so as to make it operate as an assignment for the benefit of the New York creditors. All the appellees but Gregory are non-residents of this State. The transaction must be assumed to have been valid according to the laws of New York, for preferences were lawful at common law; and the common law is presumed to prevail in States where the contrary does not appear. It follows that the transfers will be treated by this court as valid, so far as the citizens of other States are concerned.
Said this court, through Judge Holt, in Matthews v. Lloyd, 89 Ky., 629, [13 S. W., 107]: “At common law, a debtor had a right to prefer a creditor either by a payment or an express preference in a deed of assignment. He has a right to pay his debt, and it is only by virtue of statutory law that such a payment can be held invalid, and the creditor be compelled to surrender his advantage. In the absence of any showing of the existence of such a statute in another State, it must be presumed that the
All the appellees, except Gregory, being confessedly citizens of other States, it follows, therefore, that, in the present state of the record, the statute can not be held to operate in their favor.
The validity of the claim >of Gregory is in dispute, and the judgment makes no mention of his claim. As to his claim, therefore, there is nothing for us to act upon.
The judgment is reversed, with directions for further proceedings consistent herewith, allowing appellees to amend, if desired, both as (to the1 New York law and as to demand and protest upon the bills of exchange sued upon.