105 F. 895 | N.D.N.Y. | 1901
It is conceded by the alleged bankrupt that for more than six months next preceding the filing of the petition she resided in the Northern, district of New York; that she owes debts amounting to $1,000; that the three petitioners are creditors, having valid claims amounting to over $500; that at the date of filing the petition and for more than four months previous thereto she was insolvent and knew that she was insolvent. The only question, therefore, is whether an act of bankruptcy has been established. On the 80 th of March, 1900, the alleged bankrupt was indebted to the estate of George Lawyer for more than, $500. Besides this the
Section 3 of the bankruptcy act, subd. 2, provides that a person has committed an act of bankruptcy when he has “transferred, while' insolvent, any- portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors.” Section 1, cl. 25, provides that a “‘transfer’ shall include the sale and every other and different mode of disposing of or parting with property, or the possession of property, absolutely or conditionally, as a payment, pledge, mortgage, gift, or security.” There can be no question as to the alleged bankrupt’s intent to give a preference, under the provisions of section 3. It is a cardinal principle of law that every one is presumed t'o intend the necessary consequences of his acts, and where an insolvent debtor transfers a large portion of his property to one creditor, to the exclusion of all the rest, such a transaction must be taken as conclusive evidence of his intent to prefer that creditor. Tool v. Martin, 13 Wall. 48, 20 L. Ed. 481. It is thought that the transfer of the accounts amounted to an act of bankruptcy. Mrs. McGee was indebted to ' the Lawyer estate. If the transfer had not been made the Lawyer estate would have received its share with the other creditors. Because of the transfer of the accounts the note for $225 was retired. That this result was brought about by the transfer to Mrs. Lawyer as an individual and not in her representative capacity does not seem material. The purpose of the transfer was fully known to her. If the' note had been held by the estate and if the transfer had been directly to the estate and the note surrendered it is plain that the estate would have received a preference over the other creditors, and, yet, in contemplation of law, this is precisely what occurred. Assume, for illustration, that Mrs. McGee was the owner of a bond, the market value of which was $225, and that she, being-insolvent, had transferred this bond to a creditor who held her note for that amount. There can be no question that such a transaction would be an act of bankruptcy. Would it be any less an act of bankruptcy if the bond had been transferred to a third person with direction to raise the money thereon and pay the note? Or assume that the $225 was borrowed of a third party and the bond transferred as security, with- full knowledge of all that the money was to be paid to a favored creditor, would this change the result? It is thought not. In either instance the property, which, theoretically, at least, belongs to all the creditors, is taken from them and given to a favored creditor, — a situation which the bankruptcy act was passed to prevent. Speaking of this transaction the referee dis
