75 P. 1027 | Kan. | 1904
The opinion of the court was delivered by
About March 6,1899, Ridgeway & Co., who were conducting a general store, sold their stock of merchandise to one Meeker for $3000. The firm owed about $3900 at the time to general creditors, and, among others, was indebted to plaintiffs in error in the sum of $900. In a few days after the sale Ridgeway & Co. paid John S. Brittain Dry-goods Co. $366.50 on their claim. On June 10, 1899, Ridgeway & Go. were declared bankrupts.
This was an action by Bertenshaw, the trustee in the bankruptcy proceeding, to recover back the payment made to plaintiffs in error, on the ground that it was a preference. In answer to particular questions of fact, the jury found that, after Meeker paid Ridge-
Subdivisions a and b of section 60 of the bankruptcy act of 1898 (80 U. S. Stat. atL. 562, Comp. Stat. 1901, 3445), read :
“ (a) A person shall be deemed to have given a preference if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.
“(b) If a bankrupt shall have given a preference within four months before the filing of a petition, or after the filing of the petition and before the adjudication, and 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, it shall be voidable by the trustee, and he may recover the property or its value from such person.”
A person is deemed to be insolvent, within the meaning of the bankruptcy act, when the aggregate of his present property “shall not, at a fair valuation, be sufficient in amount to pay his debts.” A payment of money has been held to be included within the words “transfer of property,” used in section 60a. (Pirie v. Chicago Title and Trust Company, 182 U. S. 438, 21 Sup. Ct. 906, 45 L. Ed. 1171.)
It is essential to a recovery in cases of this kind that the effect of the payment was to enable one creditor to obtain a greater percentage of his debt than other creditors of the same class. (Re Hapgood, 2 Lowell, 200, 11 Fed. Cas. No. 6,044; Peterson v. Nash Bros., 112 Fed. 311, 314, 50 C. C. A. 260, 55 L. R. A. 344; Collier on Bankruptcy, 3d ed., 342 ; Luby on Bankruptcy, 109, and note.) The jury found that the payment to plaintiffs in error of a part of their demand did not* have such effect. There is no question of the burden of proof involved, as was the case in Baden v. Bertenshaw, ante, page 32, 74 Phc. 639.
The judgment of the court below will be reversed, and if defendants below move for judgment in their favor, the application should be granted.