89 Ky. 422 | Ky. Ct. App. | 1890
delivered the opinion of the court.
December 24, 1887, the appellee, Albert Silva, for ten. ■thousand four hundred and twenty dollars, conveyed •certain real estate to F. C. Miller, and a grocery store for four thousand five hundred dollars to Thomas Weston. He also, upon the same day, paid Ann E. Webster a debt of three hundred and forty dollars, and one •of five thousand five hundred, dollars to the Herman National Bank. He was then insolvent, and upon the
The statute expressly declares that the act of insolvency “shall operate as an assignment and transfer of all the property and effects of such debtor, and shall inure to the benefit of all his creditors.” It also-provides that the action shall be conducted as one for the settlement of a decedent’s estate, so far as applicable (General Statutes, chapter 44, article 2, section 3); and section 432 of the Civil Code declares that a creditor of a decedent, by proving Ms claim before the master, becomes a party to the action, and is concluded by the final judgment.
The creditors, in this instance, by- -proving their debts, became parties to the action, and are entitled equally with the original plaintiff to make any question or take any step in it. As he could not, by dismissing his petition, prejudice their rights acquired by the filing of their claims, so he can not, by objecting to an appeal, cut off their right to one. By presenting their claims, they acquired, á right independent of Mm, and which they may assert in the action, even over his objection. Nor is this right, as to an appeal,, to be demed, because the master’s report, as to claims, may not have been acted upon by the court. They had become parties to the action, and may, therefore, ques
The motion to dismiss the appeal is, therefore, overruled.
The question next presents itself, whether the pleadings, upon the part of the plaintiff, furnish ground for the desired relief.
Proof, without pleading, can not, of course, avail. It is quite meritorious in a debtor to pay his creditor. He may even prefer him over his other creditors without being guilty of actual fraud. Relief in such a case is afforded by reason of the statute alone. To obtain it the party must aver, in his pleading, the facts required by the statute to authorize it'. Its language is : ‘ ‘ Every sale, mortgage or assignment made by debtors, and every judgment suffered by any defendant, or any act or device done or resorted to by a debtor in contemplation of. insolvency, and with the design to prefer one or 'more creditors to the exclusion in whole or in part of others, shall operate as an assignment and transfer of all the property and effects of such debtor, and shall inure to the benefit of all his creditors in
Two things must concur to entitle the creditor to relief, to-wit: First, the act must be done in contemplation of insolvency; and second, with the design to prefer one creditor over another. If the debtor knows that he is insolvent at the time, then the design to prefer will be presumed, but not absolutely; or, if he contemplates becoming so, and does the act with the design to prefer, then the transaction is within the statute. If, however, the circumstances show that no preference was intended, then the act will not be held to be one of insolvency within the statute, although the debtor may, in fact, have been insolvent at the time. (Grimes’ Assignee, &c., v. Grimes, 86 Ky., 511.)
Thus, if A be bound, both as principal and surety, and, considering all this liability, is insolvent, yet if he have ample to pay his own debts, and it is not known he will have to pay those for which he is surety, and, under these circumstances, he, not in contemplation of insolvency, or with any design to prefer, makes a payment to a creditor, it should not be held to be a preference within the statute. This instance is given to show that it is not sufficient to merely aver the insolvency of the debtor at the time of the doing of the act. In doing it, he must contemplate Ms insolvency, and intend to prefer the creditor. The pleader need not, of course, use the language of the statute. It is sufficient, if the facts required by it are substantially stated; ' but while the intent of the debtor may be inferred from facts proven, yet this does not dispense with, the necessity of pleading the
The averments that the payments were acts of insolvency and preference, and operated for the benefit off all the creditors, were merely legal conclusions, which fail to support the pleadings, and it results that the chancellor properly dismissed the action, because the grounds for relief required by the statute were not-stated.
Judgment affirmed.