Gamble v. Elkin

205 Pa. 226 | Pa. | 1903

Opinion by

Mb. Justice Potteb,

Recovery is sought in this case upon the ground, as set forth in the statement of claim, that the defendants obtained from Hugh B. McKean a preferential transfer of certain assets, within four months of the time of the filing of a petition in bankruptcy against the said McKean.

Under the national bankruptcy law, such a preference is voidable by the trustee in bankruptcy if the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference.

The plaintiff’s right to recover, therefore, depends upon his ability to prove, not merely that the transaction was a preference, but that the defendants or their agents had reasonable cause to believe that it was intended as such. This involves knowledge upon the part of the defendants of the insolvency of the bankrupt.

The statement of claim, therefore, consistently charges that at the date of the transaction the defendants knew, and had reasonable cause to believe that at that time, and for a long time prior thereto, the said Hugh B. McKean was insolvent.

The affidavit of defense squarely meets and contradicts this essential averment. It denies knowledge of the fact of the in. solvency at the time of the transfer. It avers that neither of the Dennys referred to in plaintiff’s statement were acting as the agents for the defendants; it avers that the transaction was conducted in entire good faith and with no intention to obtain any advantage or priority over any other creditor, in violation of the bankruptcy law. It denies knowledge that the assets so transferred were the whole of the bankrupt’s assets.

The record shows a plethora of statements of claim and of affidavits of defense. This was perhaps owing in part to the lack of candor upon the part of defendants with regard to the constituency of their firm. But in the last of the series of affidavits of defense, while there is an apparent misprint, yet as we understand it, the sweeping averment is made that neither the defendants nor any of their agents had knowledge of the insolvency of the bankrupt McKean. But in any event, in view of tbe numerous, and as we think, sufficiently explicit denials by the defendants, of all knowledge upon the part of themselves or agents, of the insolvency of McKean, and of reasonable cause to believe that it was intended to create a preference, the court below could not properly have refused to discharge the rule.

The judgment is affirmed.