Sabin v. Horenstein

260 F. 754 | 9th Cir. | 1919

GILBERT, Circuit Judge

(after stating the facts as above). It is contended that the court below erroneously construed the statute in holding that the intention thereof was to prevent persons who were dealing in merchandise from disposing of their entire stock, or the larger portion of it, or such proportion of it as will render the vendor less able to pay his obligations, and in holding upon the evidence in the case that the sales made to the appellee were not out of the usual or ordinary course of the business of the bankrupt. We are not convinced that the court below was in error in either respect. The court found upon the evidence, which was taken in open court, that during the two or three years prior to bankruptcy the bankrupt was doing both a retail and jobbing business, and that on numerous occasions he had sold goods in job lots, although the bulk of his jobbing business was done within three or four months prior to bankruptcy, and that the goods sold to the appellee were sold in the usual course. This finding was made upon the testimony of a number of witnesses, who testified that they had made various purchases in job lots, most of which were of small quantities of merchandise, and it is conclusive upon us on the appeal, whatever may be the true construction of the act, and it is decisive of the question whether the sales were made out of the usual course of business.

Undoubtedly the statute is sufficient in its scope to include a series of sales to various purchasers whereby the greater portion of a merchant’s stock may be disposed of. The appellant points to certain features of the evidence which tend to indicate that the intent of the bankrupt in disposing of his goods was fraudulent, and we may concede such to have been the fact. Reference is also made to suspicious circumstances as evidence that the appellee participated in the fraud. But as to that the court below held otherwise. It- is true that the appellee was in the “barber business,” but he also had a supply-store and he was engaged in buying and selling goods; and it is true that he and the bankrupt were friends, and had had various business transactions covering a period of several years prior to the bankruptcy, and that on one occasion the appellee purchased from the bankrupt a lot of shoes for $225, which was the invoice price, less freight, and that the sale was made on a rising market. But these and the other circumstances referred to are not sufficient to show fraudulent intent on the part of the appellee, and there was ho evidence that he had knowledge of the other sales in job lots made by the bankrupt, and there was nothing in the evidence to indicate that he knew of any fraudulent scheme of the bankrupt to dispose of any portion of his stock in violation of the statute.

The decree is confirmed.