242 F. 476 | 9th Cir. | 1917
Marshall, as trustee of the estate of Hickman, bankrupt, brought suit under section 60, subd. “b” of the Bankruptcy Act of July 1, 1898, c. 541, 30 Stat. 562 (Comp. St. 1916, § 9644), as amended in 1910 (Act June 25, 1910, c. 412, § 11, 36 Stat. 842), to set aside the transfer of an interest in the schooner William Olsen to Elizabeth Nevins. Hickman was adjudged an involuntary bankrupt on February 2, 1916, and the transfer involved was made by Hickman to Mrs. Nevins on December 7, 1915, within four months before the adjudication in bankruptcy. The District Court decided in favor of Mrs. Nevins, and the trustee appeals.
Greenewald testified that he explained to Mrs. Hickman in November, 1915, that her husband owed him some money for advances to the Bay Shore Drayage Company, and that he wanted settlement and asked her to discuss the matter with her mother, Mrs. Nevins, that Mrs. Hickman agreed to do this, and that afterwards Hickman told him that Mrs. Hickman had been to Vallejo to see Mrs. Nevins about the matter. Greenewald also says that he asked Hickman to transfer his interest in the schooner as security for his indebtedness to him, but that Hickman would not do so, and in December transferred the interest to his mother-in-law, Mrs. Nevins. Mrs. Nevins testified that she never knew anything of Hickman’s business affairs, and never had the slightest reason to suspect that he was insolvent, until she read that he was adjudicated a bankrupt; that at the time her son-in-law, Hickman, rr nsferred his interest in the schooner to her, he owed her about $10,-000 borrowed money; that she did not know that he was insolvent, or intended to make a preference in her favor, or that the transfer would effect a preference. She said that during many years she had lent money to her daughter and to her son-in-law, to be paid back to her as they might see proper; that she never discussed business with Hickman, and that there was never anything in the style of living of her daughter and son-in-law which led her to believe that Hickman was in failing circumstances; that she had perfect confidence in her son-in-law, and that the requests which he made for loans were always brought to her through her daughter, Mrs. Hickman. She explained her participation in the contract with the Drayage Company by saying that she signed it at the instance of her daughter, who told her that Mr. Greenewald was going to assist Mr. Hickman, and that by signing the
The opinion of the District Judge was that the evidence showed that Mrs. Nevins trusted her son-in-law and daughter absolutely, and had no reason to suspect that her son-in-law was insolvent, and did not believe that he was, at the time of the transfer to her.
“By the statute’s very words, in order to set aside such a transfer and recover the property, it must appear that ‘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.’ Whether such ‘reasonable cause to believe’ existed is a question of fact, and the burden of proof is upon the trustee.” Grant v. National Bank, 97 U. S. 80, 24 L. Ed. 971; Barbour v. Priest, 103 U. S. 293, 26 L. Ed. 478; Coder v. Arts, 213 U. S. 223, 29 Sup. Ct. 436, 631 L. Ed. 772, 16 Ann. Cas. 1008; Wright v. Sampter (D. C.) 152 Fed. 196.
Appellant makes the point that the appellee, Mrs. Nevins, must be charged with any knowledge of her daughter, upon the theory that the daughter was the agent of her mother. But there is no substantial proof to the effect that Mrs. Hickman was the agent of her mother, in that any knowledge which Mrs. Hickman may have had concerning hef husband’s affairs was to be imputed to Mrs. Nevins.
An accurate judgment upon the whole case called for a very careful •estimate of the testimony of Mrs. Nevins. If she was perfectly truthful in her statements of the confidence she placed in her son-in-law, and of her ignorance of his real financial situation, and of any purpose to prefer her over other creditors, the conclusion of the lower court ought not to be overthrown. The advantage of having heard and seen the witness must have greatly aided in turning the case one way or the other. It being clear that there was no misunderstanding of the law, we are not satisfied that the learned court drew erroneous conclusions of fact from the testimony.
Affirmed.