166 N.E. 801 | Ohio | 1929
There was a conflict of evidence upon each of the issues. There was, however, evidence to support the findings of fact of the Court of Appeals upon each of the issues. Following its well-settled policy, this court will not weigh the evidence to determine whether or not the Court of Appeals reached correct conclusions. The findings of fact made by the Court of Appeals will be the basis of the discussion as to whether or not the Court of Appeals reached correct conclusions of law. The findings of fact upon the issue of mental capacity and delivery present no legal questions. It is, however, urged that even though the design on the part of Elza Kennedy to prefer and his intent to hinder, delay and defraud his creditors was sufficient to vitiate the transaction, even though James Kennedy did not know of the design to prefer or the intent to defraud, and even though as found by the Court of Appeals James Kennedy had no knowledge of the insolvency of his brother Elza, the conveyance was nevertheless valid.
At common law a debtor might give a preference to one of his creditors. In 1859, 56 Ohio Laws, 235, the Legislature of Ohio enacted a law which later became Section 6343, Revised Statutes, which provides: "All assignments in trust to a trustee or trustees, made in contemplation of insolvency, with the intent to prefer one or more creditors, shall inure to the equal benefit of all creditors, in proportion to the amount of their respective claims, and the trusts arising under the same shall be administered in conformity with the provisions of this act."
While that statute remained unchanged, this court in 1892 decided the case of Cross v. Carstens, *12
In 1898 (93 Ohio Laws, 290) the Legislature amended Section 6343, Revised Statutes, whereby it is declared that any sale, conveyance, transfer, mortgage or assignment, whether made in trust or otherwise with a design to prefer one or more creditors to the exclusion of others in whole or in part, and every sale, conveyance, transfer, mortgage or assignment made with intent to hinder, delay or defraud creditors, shall be declared void as to the creditors of such debtor at the suit of any creditor.
In 1902 (95 Ohio Laws, 608), Section 6343 was further amended, whereby a proviso was inserted: "Provided, however, that the provisions of this section shall not apply unless the person, or persons to whom such sale, conveyance, transfer, mortgage or assignment be made, knew of such fraudulent intent on the part of such debtor or debtors," etc.
A further amendment was made in 1908 (99 Ohio Laws, 241), but that amendment does not materially affect the present inquiry. Under the codification of 1910, Section 6343 became separated into Sections 11104 and 11105, General Code. Those sections now read as follows:
"Sec. 11104. A sale, conveyance, transfer, mortgage or assignment, made in trust or otherwise, by a debtor or debtors, and every judgment suffered by him or them against himself or themselves in *13 contemplation of insolvency and with a design to prefer one or more creditors to the exclusion in whole or in part of others, and a sale, conveyance, transfer, mortgage or assignment made, or judgment procured by him or them to be rendered, in any manner, with intent to hinder, delay or defraud creditors, shall be void as to creditors of such debtor, or debtors, at the suit of any creditor or creditors.
"In a suit brought by a creditor or creditors of such debtor or debtors for the purpose of declaring such sale void, a receiver may be appointed who shall take charge of all the assets of such debtor or debtors, including the property so sold, conveyed, transferred, mortgaged, or assigned, and also administer all the assets of the debtor or debtors for the equal benefit of the creditors of the debtor or debtors in proportion to the amount of their respective demands including those which are unmatured."
"Sec. 11105. The provisions of the next preceding section shall not apply unless the person or persons to whom such sale, conveyance, transfer, mortgage or assignment is made, knew of such fraudulent intent on the part of such debtor or debtors, nor shall anything in such section contained vitiate or affect any mortgage made in good faith, to secure any debt or liability created simultaneously with such mortgage, if such mortgage be filed for record in the county wherein the property is situated, or as otherwise provided by law, within three days after its execution, and when, upon foreclosure or taking possession of such property, the mortgagee fully accounts for the proceeds thereof."
If the amendment of 1898 was intended to affect *14
the decision of this court in Cross v. Carstens, supra, it has not had any perceptible effect in its practical results. This court in Bobilya v. Priddy, Assignee,
To get the full force of that syllabus we must look to the opinion of the court, from which we quote, at page 388 (67 N.E. 738):
"But the charge as given, and to which there was an exception, was too narrow in this: it failed to charge that in case the purchase by Mr. Bobilya was in good faith and for fair value it was valid as to him, even though made by Mr. Spahr in contemplation of insolvency or with a design to prefer one or more creditors to the exclusion of others, or made on his part with intent to hinder, delay or defraud creditors.
"If Mr. Bobilya was innocent, and ignorant of any wrong purpose or intent on the part of the vendor, his purchase must be upheld, and cannot be held void as to him. The innocent must be protected, even though such protection, to some extent, inures to the advantage of the guilty. Yeoman v. Lasley,
The Bobilya case was cited with approval in Lytle v.Baldinger,
The case of National Bank of Commerce v. Gettinger,
This cause was certified to this court on the ground of conflict. We have therefore examined the case of Prose v.Beardsley,
The judgment of the Court of Appeals will therefore be affirmed.
Judgment affirmed.
KINKADE, ROBINSON, JONES, MATTHIAS and DAY, JJ., concur. *17