Grow v. His Creditors

California Supreme Court Jul 1, 1866Published

Before: Sanderson

AI Brief

AI-generated · verify before citing

Holding. The court held that the petitioner's future office emoluments did not constitute an estate in expectancy requiring assignment, and that gambling losses do not constitute legal fraud under the Insolvent Act. Because there was no evidence supporting the charge that the petitioner failed to account for post-petition debt collections, a new trial was granted.

Issues

Whether future emoluments of a public office constitute an estate in expectancy under the insolvent debtor statute.
Whether gambling losses constitute legal fraud sufficient to deny a discharge under the Insolvent Act.
Whether the evidence supported the charge that the petitioner failed to account for debts collected after filing his petition.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“That such is the law is not now pretended, however strenuously it may have been contended that it was in the Court below.”

“However pernicious the habit of gambling may be, we are not aware that it has ever been esteemed a legal fraud upon creditors.”

Synopsis

Statement of Losses in Insolvent’s Petition.—In a contest on the ground of fraud against an applicant for the benefit of the. Insolvent Law, the statement of the applicant in his petition as to his losses is not involved. If the statement of losses is vague and indefinite, the proper course is to move for a rule upon him to amend it.

Charge of Fraud in Creditor’s Opposition to Insolvent’s Discharge.—If an objection is raa'de that the matters charged as fraud in a creditor’s written opposition to an insolvent’s discharge do not amount to fraud, the objection will be overruled if any of the charges are sufficient.

Demurrer to Opposition to Insolvent’s Discharge.—An objection that matters charged as fraud in a creditor’s written opposition to an insolvent’s discharge do not amount to fraud, is equivalent to a demurrer.

Estate in Expectancy within Meaning of Insolvent Law.—If an applicant for the benefit of the Insolvent Law holds an office from which he will derive future revenues, these revenues do not constitute an estate in expectancy, within the meaning of the statute, which the petitioner is bound to assign to his creditors.

Allegation of Fraud in Opposition to Insolvent's Discharge.—An allegation, in an opposition to an insolvent's discharge, that the petitioner holds the office of County Treasurer, from which he will hereafter receive a large amount of money, and that he has fraudulently concealed such fact from his creditors, does not amount to an allegation of fraud.

Gamblers entitled to Benefit of Insolvent Law.—Gamblers are not denied the benefit of the Insolvent Act, and their application therefor cannot be defeated on that ground.

Charge of Fraud in Opposition to Insolvent’s Discharge.—An allegation in an opposition to an insolvent's discharge that he has collected debts since he filed his petition which were due him, and has failed to account for the money and pay it over to his assignee, amounts to a charge of fraud. The allegation ought to state from whom the money was received; but if not objected to on that ground, the objection is waived.

By the Court, Sanderson, J.: This is a proceeding under the provisions of the statute for the relief of insolvent debtors and protection of creditors. One of the creditors opposed and contested the discharge upon the ground of fraud. The charges of fraud were submitted to a jury, who returned a verdict of guilty against the petitioner. A new trial was applied for, but denied.

Three points were made upon the motion for a nqw trial:

1. That the verdict is contrary to the evidence.

2. That the Court erred in refusing to instruct the jury that the fees and emoluments of the office of County Treasurer—of which the petitioner was the incumbent at the time these proceedings were commenced—which had or were to accrue to the petitioner subsequent to the filing of his petition, did not constitute an estate in expectancy within the meaning of the statute, and therefore need not be assigned by petitioner.

3. That the Court erred, in admitting irrelevant testimony.

In addition to the foregoing, a fourth point is now made, to the effect that the matters charged as fraud, if taken as confessed, do not amount to fraud within the meaning of the statute.

This point is equivalent to a general demurrer, and must be overruled if any of the charges are sufficient. The objection in writing of the creditor to the discharge of the petitioner starts out with averring that the schedule of losses is vague [331]and indefinite. Admitting this to be so, it has nothing to do with this contest. A contest of this character brings out the acts of the petitioner in relation to his estate, and brings before the jury the schedule of his assets and not of his losses. If a more complete and definite schedule of the insolvent’s losses can be required for any purpose, the proper course would be to move the Court for a rule upon him to amend it, so far as he may be able to do so, in the respects whereof complaint is made. But be that as it may, it is clear that such objections only present a legal question, and are not involved in the matters with which the jury have to deal.

The contestant next alleges that the petitioner holds the office of County Treasurer, which yields or.will yield him an income of about two thousand five hundred dollars per annum during his term of office, and that prior to the filing of his petition he had been in possession of the office for nearly two months, and had received in fees therefrom the sum of one hundred and eighty dollars. That the petitioner has fraudulently concealed the fact that he is such Treasurer, and that he has and will hereafter receive a large amount of money from his office, with the intention of keeping the same from his creditors, etc. If this be true, it certainly does not reflect much credit upon the intelligence and sagacity of his creditors and constituents. In view of the fact that he was chosen for that position by the people of his county at a general election held for that purpose in part, and of the fact that his election must have been a matter of notoriety and of record in the public archives of the county, one would suppose that he would find it exceedingly difficult to conceal the fact from .his creditors, if inclined to do so. We think we may safely venture the statement, upon the face of the papers, that the petitioner never undertook to conceal from his creditors the fact that he held the office in question or that he was in receipt of its emoluments.

Grow v. His Creditors

AI Brief

Synopsis

More from California Supreme Court

Related research

AI Brief