142 Ky. 183 | Ky. Ct. App. | 1911
Response to Petition Por, Rehearing and Extended Opinion of the Court by
It is insisted by counsel in the petition for rehearing that the opinion is in conflict with a number of previous decisions of the court. Counsel quote the folloAving sentence from the opinion:
. “The letters of Marshall, his will and the other-proof in the record, leave no doubt in our minds that he did not in fact contemplate being insolvent, or in fact intend to prefer the creditors whom he paid off on May 6th, to his other creditors.” (See Union Trust Co. Etc. v. Taylor, 139 Ky. 283.)
“"We therefore conclude that he did not know he was insolvent, unless the circumstances were such that he ought to have regarded it as reasonably certain that he would be called upon to pay the debts on which he was surety for his son, William.”
Again in McKee v. Scobee, 80 Ky. 128, where it was insisted that the grantor did not know he was insolvent, the court said:
“Whether he knew at the time of the sale he was insolvent must be determined by the facts and circumstaees as they are presented.”
In Allen v. Dillingham, 104 Ky. 808, it also said:
“Now it is contended for the defendants that Mr. Dillingham did not make the conveyance in contemplation of insolvency, nor with the design to prefer Allen’s Sons to the exclusion either in whole or in part of his other creditors. That Mr. Dillingham did not believe at the time of the conveyance that he was then insolvent is in no sense decisive of this point.”
In Walker v. Davis, 19 K. 1314, the court said:
“There is but one conclusion to be reached from this record, and that is that Davis was insolvent when he executed the mortgage to Walker & Sengstak; and, crediting Davis as being a man of fair judgment, he could not have failed to know at that time that he was insolvent.”
“In Northern Bank vs. Farmers Bank, 111 Ky. 350, the debtor Moore had made a deposit in bank of $4,557.75, as stated in the opinion, “in the usual course of business without actual intention on the part of Moore to give it a preference over his other creditors.” Holding this transaction within the statute the court said:
“It has been held that where a debtor makes a transfer or payment to one of his creditors with the knowledge that he is insolvent, the design to prefer will be presumed, unless the accompanying circumstances show plainly that there was no such intention. This rests upon the presumption that one designs the usual result of his act. But the presumption is not absolute. The intent of the debtor is the essence of the statute. . Still the purpose of the statute would be defeated if it were denied application simply because the debtor did not in fact contemplate the necessary effect of his act. If Moore had handed the cheek for $4,557.75 to the bank, and directed
The aim of the statute being to secure equality between creditors, what the debtor’s mental attitude may be is not so material under the statute as the real character of the transaction. The law no where holds out a premium for supineness and negligence^ its standard is ordinary care. It is not usually easy to show what is in fact going on in a man’s mind; and so in cases of this sort, it is a reasonable rule to apply the statute, where under the facts known to him, a reasonable man would know that he was insolvent, and would know that the effect of his act would be to prefer one creditor to another. This is the rule applied in the- opinion and as shown it has been often applied by this court before.
2. Upon a reconsideration of the matter the court is of opinion that the mortgage given the Trust Company on January 4, created a valid lien fco secure the debt of $2,000.00, and that as to this debt of $2,000.00. the mortgage of May 4, was not within the slatute. The opinion heretofore delivered is modified as indicated to the effect that as the debt of $2,000.00 was secured by the prior mortgage, the mortgage of May 4, was not invalid as to this debt of $2,000.00. (Meyer v. Flinsbach, 95 Ky. 139; Foley v. Foley, 108 S. W. 270.)
3. The circuit court by its judgment adjudged (1) that the mortgage of May 4 for $40,000.00 was within' the statute, and operated as an assignment except to the extent of $4,171.70 retained for Mrs. Ambler; (2) that the following payments made by Marshall on'May 6 and May 7 were within the statute; $16,822.50 to the Trust Company, -10,150.75 to the First National Bank of Maysville, $400.00 to the Union Trust Company, $2,043.00 to W. F. Taylor, $1,585.00 to Martha A. Bramel, $6,108.35 to Mary R. Wells, $2,161.65 to James N. Kirk, $3,000.00
4. The Trust Company, the First National Bank, Mary E. Wells, Martha A. Bramel, W. F. Taylor and J. N. Kirk superseded the judgment. By the opinion delivered herein, the judgment against the Trust Company was reversed, also the judgment against the First National Bank as to the $4,000.00 collateral, and the debt which it secured; but the judgment against the bank as to the payment into court of $10,150.75, and the judgments against Wells, Bramel, Taylor and Kirk were affirmed. A judgment for damages was then entered
The opinion is. modified and extended as above indicated. The judgment as to all the appellants is reversed, and the canse remanded for a judgment and further proceedings consistent here with. The petition for rehearing in other respects is overruled.