265 Pa. 576 | Pa. | 1920
Opinion by
This is an issue to determine the ownership of a fund paid into court and turns on the validity of certain assignments under the bankruptcy law. Hess Brothers were building contractors engaged in the erection of a large number of houses for mining operators in and about Indiana County, and, in July, 1917, contracted with the plaintiff corporation for a large .amount of lumber, which was delivered as required and resulted in an indebtedness of $28,000. They were financially embarrassed, and became more so as the season advanced. Their notes and checks went to protest, and plaintiff became so concerned that from time to time it held up and delayed the delivery of certain carloads of lumber, and made inquiries as to Hess Brothers’ financial condition. A block of the houses was being built for the Vinton Colliery Company, and on Sept. 17, 1917, they gave plaintiff an order for $10,000 on the coal company to apply on the $28,000, and on Oct. 4, 1917, a further order of $3,768.78, for like purpose, both of which were
Plaintiff’s 14th point was, “If the jury believe from the evidence that on or about the date of the order one of the firm of Hess Brothers assured William Schuette that the firm was worth $50,000 over and above their liabilities, and that William Schuette believed it, then William Schuette had no reasonable cause to believe that Hess Brothers were insolvent, and the taking of the orders in suit was not a preference under the bankruptcy • laws, and their verdict must be for the plaintiff.” Answer: “As a general proposition this is affirmed, and we say to the jury that the testimony of William Schuette is an important factor in this case, and should be considered in connection with the other testimony in the case.” This was error, for the validity of the transfer did not turn upon the creditor’s personal belief but upon reasonable cause to believe that the enforcement of
It was also error to permit William Schuette, the creditor’s agent, to testify to his belief that Hess Broth-' ers were solvent when the orders were given and accepted. The case turned, as above stated, not on the creditor’s belief but upon the reasonable cause to believe and that was a matter for the jury upon all the facts and circumstances. If one witness may state his belief so may others, and the jury would be trying the case not upon the facts proven but upon the conclusions of the witnesses. As a general rule it is the duty of lay witnesses to state facts and permit the jury to draw inferences therefrom. See Ventress v. Smith, 10 Peters 171; also cases cited in Yale’s Pa. Digest, vol. 3, col. 8470. “Hence, whenever the circumstances can be fully and adequately described to the jury, and are such that their bearing on the issues can be estimated by all men, without special knowledge or training, opinions of witnesses expert or other, are not admissible”: Kuhn v. Ligonier Val. R. R. Co., 255 Pa. 445; Chambers v. Mesta Machine Co., 251 Pa. 618; Ake v. City of Pittsburgh, 238 Pa. 371; Graham v. Penna. Co., 139 Pa. 149. The facts, as related by Schuette were not complicated nor difficult of apprehension. Of course there are many cases where lay witnesses may state their opinions or beliefs; like those of sanity, handwriting, personal identity, values, etc.; but the present case does not seem to fall within any of them. A witness conversant with a person’s assets and liabilities may, in the nature of an estimate of value, express an opinion as to his solvency (Watterson, Admr., v. Fuellhart, 169 Pa. 612), but Mr. Schuette makes no claim of personal knowledge as to the assets and liabilities of Hess Brothers, so, while he could properly state any facts or information within his knowledge at the
The case rests upon the reasonable cause of plaintiff to believe in the unlawful preference when it accepted the orders; and hence, what Mr. Schuette, as a member of the creditors’ committee, learned a month or more thereafter should not have been admitted as bearing upon that question.
The affirmation of plaintiff’s 12th point, viz: “It is undisputed that at and after the time of the orders both defendant and plaintiff believed honestly that Hess Brothers’ assets were worth at least 75 per cent of their liabilities,” was error. The fact therein stated was not undisputed. There was no evidence that defendant (the receiver) had knowledge of the financial condition of Hess Brothers when the orders were given, and the creditor’s belief, more especially at a later period, is not the test of the validity of the transfer.
The answer to plaintiff’s 13th point correctly states the facts, so far as relates to the orders embraced in this suit; and, as a preference may be unlawful when only sufficient to pay part of the indebtedness for which it is given, the balance of the point was rightly refused.
Accepted orders given within the four months constitute an assignment of the fund, but voidable only as a preferential transfer when the assignor was insolvent, and the transfer was for an existing indebtedness and operated as a preference, of which fact the assignee had at the time reasonable cause to believe. As the mere giving of the orders by the bankrupt does not of itself constitute a voidable transfer the defendant’s second point was properly refused.
Under the present bankruptcy law a debtor is insolvent when the aggregate of his property shall not, at a fair valuation, be sufficient in amount to pay his debts (3 R. C. L., p. 275, sec. 98), and not when he is unable to meet his obligations as they mature in the ordinary
It cannot be affirmed as matter of law that, because a debtor’s business is bad and it is necessary to continually press him for payment, the creditor has reasonable cause to believe him insolvent. Those are circumstances, which in the present case were properly submitted to the jury in answer to defendant’s 6th point.
As there was no appeal from the order awarding the issue, the question discussed by appellee as to its validity is not properly before the court. The giving and acceptance of orders, if a voidable preference, does not place the fund embraced therein beyond the grasp of the law.
The first four assignments of error are sustained and thereupon the judgment is reversed and a venire facias ¡de novo awarded.