128 Mass. 120 | Mass. | 1880
The principal question in this case is whether a conveyance by way of preference, made by an insolvent debtor, in contravention of the provisions of the insolvent laws of the Commonwealth, while the recent bankrupt act of the United States was in force, is a sufficient cause for instituting proceedings in insolvency against the debtor since the repeal of the bankrupt act. This question appears to us to be substantially determined by the judgments heretofore delivered by this court as to the effect of the bankrupt act of 1841 upon the insolvent law of 1838.
The first insolvent law of Massachusetts was passed on April 23, 1838, and took effect on August 1 of the same year. St. 1838, c. 163, § 26. The United States bankrupt act of 1841 was passed on August 19,1841, and took effect from and after February 1, 1842. U. S. St. August 19, 1841, § 17. By the St. of Massachusetts of 1842, c. 71, it was enacted that the insolvent law of 1838 (except the provision for discharging attachments by giving bond) “ shall be suspended so long as the bankrupt law of the United States shall continue in force; provided, that noth
The bankrupt act of 1841 was repealed by act of Congress of March 3, 1843. This court held that an attachment made while the bankrupt act of 1841 was in force, and the insolvent law of 1838 was suspended, was dissolved by an assignment of the debtor’s estate under the insolvent law on proceedings instituted after the repeal of the bankrupt act; and Chief Justice Shaw said: “ The insolvent law, during its suspension, existed to many purposes. It was suspended only during the existence of another system of paramount authority, designed for the accomplishment of the same purpose, namely, a general and equal distribution of the property. When, therefore, the operation of this suspending law ceased, the original act was reinstated in active operation, and took effect from its original enactment.” Ward v. Proctor, 7 Met. 318.
In Atkins v. Spear, 8 Met. 490, it was contended that certain transfers, assignments and payments, made by a debtor while the bankrupt act of 1841 was in force and the insolvent law suspended, invalidated a certificate of discharge under proceedings in insolvency commenced after the repeal of the bankrupt act. Mr. Justice Dewey, in delivering the judgment of the court, said that, upon the repeal of the bankrupt act, “ the insolvent law of Massachusetts was revived, and with its revival all the limitations and restrictions upon the right to a discharge revived, although the acts had occurred during its suspension; ” and that therefore, if the alleged acts of the defendant were within the
In Austin v. Caverly, 10 Met. 332, Chief Justice Shaw referred to Ward v. Proctor and Atkins v. Spear, above cited, as establishing that, upon the repeal of the bankrupt act of 1841, “ the insolvent law of 1838 went into renewed and active operation, to be construed according to the terms of its original enactment.”
It may also be observed that fraudulent conveyances made after the bankrupt act of 1841 was passed, but before it took full effect so as to suspend the operation of state insolvent laws, have been held to afford grounds for impeaching a certificate of discharge obtained, or for allowing the property conveyed to be recovered back by an assignee appointed, under proceedings in bankruptcy instituted after the bankrupt act took full effect. Swan v. Littlefield, 4 Cush. 574. Day v. Bardwell, 97 Mass. 246, 255, and cases cited.
The recent bankrupt act of the United States was enacted on March 2, 1867, and did not take full effect, so as to suspend the operation of the insolvent laws of the Commonwealth, until June 2, 1867. Day v. Bardwell, 97 Mass. 246. It was repealed by the U. S. St. of June 7,1878, which took effect on September 1, 1878. The omission of the Legislature of the Commonwealth to make any regulation whatever as to the suspension or the revival of the operation of the insolvent laws, by reason of the contemplated or the actual enactment or repeal of the last bankrupt act, can hardly be explained on any other hypothesis than that it was considered to be settled by the judgments of this court, that no such legislation was necessary, either to suspend the operation of the insolvent laws so long as the bankrupt act continued in force, or to revive the operation of all the provisions of the insolvent laws, as if they had never been suspended, so soon as the bankrupt act was repealed; and
The objection that the petition to the court of insolvency is defective, for want of an allegation that the mortgagees knew or had reasonable cause to believe that the debtor was insolvent, cannot be sustained. The dicta of Chief Justice Shaw in Ex parte Jordan, 9 Met. 292, on which this objection is founded, were unnecessary to the decision of that case, and are controlled by the opinion subsequently delivered by him in Thompson v. Stone, 8 Cush. 103, as well as by the express provision of the St. of 1856, c. 284, § 29, which the Commissioners on the General Statutes indicate no purpose to abrogate. The difference in the language of the different sections of c. 118 of the Gen. Sts. manifests the intention of the Legislature that, in order to enable the assignee to maintain an action under § 89 to recover back the property conveyed, it should be necessary to prove knowledge or reasonable cause to believe, on the part .of those receiving or benefited by the conveyance, that the debtor was insolvent or in contemplation of insolvency at the time of making it; but that the liability of the debtor to proceedings in insolvency under § 103, like his right to a certificate of discharge under § 87, should depend solely on his own intent and purpose and cause of belief, or, in other words, upon the question whether he, and not upon the question whether any other person, has done an act in fraud of the insolvent laws. And the petition to the court of insolvency in this case is in the form which has been generally used under those statutes. See Cutler’s Insolvent Laws (3d ed.) 125; (4th ed.) 193.
Decree affirmed.