153 Mass. 242 | Mass. | 1891
This is a writ of replevin by a mortgagee of the chattels in question against the assignee in insolvency of the mortgagors. The defence is that the mortgage was a preference.
The main question is whether an instruction to the jury was correct, that, if the mortgagors “ were not in a condition to meet their debts as they came due from time to time in the ordinary course of business, by the resort to such means and methods as are usually employed by business men in their business, then they were insolvent”; and that if the plaintiff had reasonable cause to believe that they were not in a condition to do so, he had reasonable cause to believe them insolvent within the requirements of the Pub. Sts. c. 157, § 96.
Assuming that it was a question for the jury, still it was pretty plain that the mortgage of the stock in trade to the plaintiff was not a conveyance made in the usual course of business. Nary v. Merrill, 8 Allen, 451. Alden v. Marsh, 97 Mass. 160. Buffum v. Jones, 144 Mass. 29. Stevens v. Pierce, 147 Mass. 510. Walbrun v. Babbitt, 16 Wall. 577. Read v. Moody, 60 Vt. 668. This fact was prima facie evidence that the plaintiff had reasonable cause to believe the mortgagors insolvent. Pub. Sts. c. 157, § 98. Metcalf v. Munson, 10 Allen, 491. Nary v. Merrill, 8 Allen, 451. Such a mortgage given solely to secure a pre-existing debt is very strong evidence, at least, of fraud. Re Waite, 1 Lowell, 207, 209. If a preference in part, it is voidable altogether. Denny v. Dana, 2 Cush. 160. Forbes v. Howe, 102 Mass. 427, 435. It is not very extravagant to say, that when a man takes such a mortgage knowing that the mortgagors cannot go on and are insolvent without the help of the little money that they raise by its means, he knows that they are insolvent, and that he is receiving a preference.
As the exceptions must be sustained on this ground, and as this is the real point of difference between the instructions given and those asked, we do not consider the plaintiff’s requests at length. It would have been likely to mislead the jury to tell them that it made no difference whether the mortgagors could raise the money to pay their debts from retail sales, or had to resort to a mortgage of their whole stock, — a conveyance out of the usual course of business.
An exception was taken to the exclusion of evidence that George H. Randall, one of the mortgagors, who had control of the business, had a standing cash offer of seven thousand dollars from a responsible party for the firm’s stock in trade and good will. As this evidence was got before the jury indirectly, the question of its admissibility is little more than speculative. No