228 F. 114 | 5th Cir. | 1915
Mrs. Rachel Kaufman conducted two mercantile establishments, one in San Antonio and the other at Mission. Ike Rosenman and Saul Rosenman conducted a jobbing house, and, while this bore the name “New York Jobbing House,” it also was
The defendant Ike Rosenman answered, and the cause was tried in January, 1915; the jury returning a verdict for the plaintiff for the amount sued for. Judgment followed. Tot the conduct of the trial, counsel for Rosenman presents here not less than 20 assignments of error. All of these, however, it does not seem essential to consider. A few are important.
The seventh assignment of error is distinctly important. It presents the exception that the court erred in admitting in evidence the original application and policies of insurance, with the Merchants’ & Bankers’ Fire Underwriters, of Rachel Kaufman, offered by the plaintiff, and in permitting plaintiff to read to the jury that portion of the application which indicated that her average stock at Mission was $6,000, that the cash value of her ofher property was $6,000, and that she had $1,000 other insurance on the Mission stock in the State Mutual Insurance Company of San Antonio. This evidence was sup
“It is not enough that a creditor has some cause to suspect the insolvency of his debtor; but he must have such a knowledge of facts as to induce a reasonable, belief of his debtor’s insolvency, in order to invalidate a security taken for his debt. To make mere suspicion a ground of nullity in such a case would render the business transactions of the community altogether too insecure. It was never the intention of the framers of the act to establish any such rule.”
This learned justice continues:
“The debtor is often buoyed up by the hope of being able to get through with his difficulties long after his case is in fact desperate; and his creditors,, if they knew anything of his embarrassments, either participate in the same feeling, or at least are willing to think that there is a possibility of his succeeding. To overhaul and set aside all his transactions with his creditors, made under such circumstances, because there may exist some grounds of suspicion of his inability to carry himself through, would make the bankrupt law an engine of oppression and injustice. It would, in fact, have the effect of producing bankruptcy in many cases where it might otherwise be avoided. Hence the act, very wisely, as we think, instead of making a payment or security void for a mere suspicion of the debtor’s insolvency, requires, for that purpose, that his> creditors should have some reasonable cause to believe him insolvent. He must have a knowledge of some fact or facts calculated to produce such a belief in the mind of an ordinarily intelligent man."
This was the rule under the act of 1867. It is the rule now. In view of these considerations, the court is of opinion that the verdict and judgment should be set aside, and a new trial awarded.
And it is so ordered.