Stuart v. Redman

| Me. | Dec 30, 1896

Haskell, J.

Replevin of certain chattels from an assignee of an insolvent debtor, by a purchaser thereof from tbe insolvent before insolvency.

The question at issue before the jury was whether the purchase by the plaintiff was in fraud of the insolvent law.

The plaintiff took the stand as a witness, and defendant was allowed to interrogate him concerning his knowledge of the insolvent’s financial condition and the property he held and disposed of, both before and after the sale to the plaintiff, to which the plaintiff has exception; but it is not well taken. The witness’ knowledge of the insolvent, his business, his property and his disposal thereof, as well as of his habits, attention to business, soberness and thrift, all are material and sometimes vital, as to whether a pretended purchaser of property knew the condition of his vendor and should be chargeable with a fraudulent purpose in disposing of the same.

Exception is also taken to the admission in evidence of twenty-three deeds from the insolvent, either given or recorded during the same year, some before and some after the pretended sale of chattels to the plaintiff. These deeds were clearly admissible as bearing upon a contemplated insolvency.

Exception is taken to the exclusion of the testimony of a witness, as to what he said in the presence of both plaintiff and the insolvent ; but what the conversation was about or when it occurred, the case does not show. It does not, therefore, appear to have been material.

Exception is taken to the admission of evidence showing that the insolvent’s deposit in bank December 22, 1892, was $28.01, that on the next day it was $3028.01, of which $3000 was drawn by check. One of the sales to plaintiff was December 12, and another December 20, 1892. Insolvency proceedings were filed by creditors March 17, 1893.

This evidence, taken in connection with the sales of property and assets shown when insolvency followed, might have a strong-bearing upon contemplated insolvency. It might negative it, or it might strongly indicate it, according to its relation with other conduct or conditions of the debtor. It was clearly admissible.

Exception is taken to the charge of the presiding justice touching what knowledge on the part of plaintiff might charge him with the consequences of his vendor’s fraud. The justice points the jury to the transactions of the insolvent, to observe his attitude towards his creditors, to see whether he was acting in contemplation of insolvency, and whether the plaintiff had reasonable cause to believe it. Some might draw from the language an inference of what the justice thought the logical inference from the facts ought to be, but that is not error. All men cannot give the same rule in the same language, and yet the same rule may be given by them all. We think the rule given was that required by the act of 1887, c. 132.

That act, amendatory of R. S., c. 70, § 52, inhibits two classes of acts, first, conveyances, etc., made to secure existing creditors, known as fraudulent preferences; second, conveyances, etc., made with a view to prevent the property from being distributed among creditors under the insolvent law. The latter inhibition applies to this case. If the conveyance to the defendant was made in contemplation of insolvency, and with a view to put the property beyond the reach of creditors, and the defendant had reasonable cause to so believe, and the conveyance was made within six months of insolvent proceedings, the same may be avoided by the assignee who may recover the property.

Finally, it is argued that defendant could not, of his own motion, take the property until he shall have first, by some procedure, annulled the sale to the plaintiff. LaPage v. Hill, 87 Maine, 158, is cited in support of the doctrine, but it does not support it. That case was trespass. This, replevin. There, the fraudulent conveyance might be shown in reduction of damages. Here, it may be showir to prevent the recovery of property by a person to whom it does not belong. If there were a trespass by the officer or assignee in taking this property, a remedy for that wrong still remains, although damages may be nominal. In LaPage v. Hill, supra, the property had been delivered to the mortgagee, and was taken from him by the messenger.

The evidence is conflicting. The case has been twice tried. We cannot say that the verdict is not supported by evidence. That depends very much upon where the truth lies, and the jury S9,id it was with defendant.

Motion and exceptions overruled.