National Bank of Commerce v. Gettinger

| Ohio | May 19, 1903

This ease and the case of George L. Bobilya v. Oscar W. Priddy, Assignee, were considered and decided together, and in the report of that ease, at page 373 of this volume, will be found the holding of this, court as to the constitutionality and proper construction of Section 6343, Revised Statutes, as amended April 26, 1898.

That section is as follows:

“Section 6343. Every sale, conveyance, transfer, mortgage or assignment, whether made in trust or otherwise, by a debtor or debtors, and every judgment suffered by him or them, and every ■act or device drone or resorted to by him or them, in contemplation of ’ insolvency, or with a design to prefer one or more creditors to tbe exclusion in whole or in part of others, and every sale, conveyance; transfer, mortgage or assignment made, or judgment suffered by a debtor or debtors, or procured by him or them to be made, in any manner, with intent to hinder, delay or defraud creditors, shall be declared void 'as to creditors of such debtor or debtors, at the suit of any creditor or creditors;, as hereinafter provided, and shall operate as 'an assignment and transfer of all the property and effects of such debtor or debtors, and sha! inure to the equal benefit of all creditors of such debtor or debtors in proportion to the amourt of their respective demands, including those which are unm'atured. And every such sale, conveyance, transfer, mortgage or assignment made, and every such judgment suffered, and every such act or device done or resorted to, by any debtor or debtors, in the event of a deed of assignment being filed within ninety (90) days after the giving ox doing of such thing or act, shall be conclusively deemed and held to be fraudulent, and held to be void as to toe assignee of such debtor or debtors, where upon proof shown, such debtor or debtors was or were actually insolvent at toe time of toe giving or doing of such act or thing, whether he or they had knowledge of such insolvency or not.

“Provided, that nothing in this section contained, shall vitiate or affect any mortgage made in good faith to secure any debt or liability created simultaneously with such mortgage, if the same he filed for record in the county wherein the property is situated, or as otherwise provided by law, within three (3) days after its execution, and where, upon foreclosure or taking possession of such property, toe mortgagee fully accounts for the proceeds of such property.”

In the Bo'bilya case this court held that transferees who acted in good faith, and for fair value, must be protected, and that with that construction, toe section is constitutional.

In the case at bar there is no averment in the amended petition that the defendants below acted in bad faith, or 'had notice of the •insolvency of Grant Benson, ox xeceive more money from him than he owed them, or that he made the said payments in contemplation of insolvency, or to create a preference, or to hinder, delay or defraud his creditors. The amended petition avers that Grant Benson made said payments to create a preference, to> defraud his creditors, and in contemplation of insolvency; but' there is no averment that the persons receiving said payments knew of his said intent and purposes, and, therefore, said petition!, by its silence, concedes that they acted in good faith and without notice, in receiving said payments. It therefore follows, under toe holding of this court in the Bobilya case, that they must he protected and can not be compelled to repay the money which they so received on honest claims.

There is another reason why these creditors can not be compelled to repay the money so received by them. Said Section 6343, maíces no provisions as to payments made in contemplation of insolvency, or to create a preference, or with intent to hinder, delay or defraud" creditors. It is urged that payments are included and covered by the words “every act or device done or resorted to by him.” This is not tenable. The word “payment” is as familiar, and as well understood, as the words, “sale, conveyance, transfer, mortgage or assignment,” and -if the General Assembly had intended to legislate against payments it would have used that word. The Legislature having omitted the word “payment” this court can not read it into the statute by construction; and especially is this true when we never had any legislation in this state against receiving payment of honest claims, and when such a construction would render the constitutionality of the act doubtful.

The circuit court erred in reversing -the judgment, and its judgment of reversal will, therefore, be reversed, and that of the common pleas affirmed.

Judgment reversed.