Chevalier v. Commins
Before: Fleet
Synopsis
Insolvency—Preference to Creditor—Action by Assignee—Conflict of Evidence—Credibility of Witness.—In an action by an assignee in insolvency to recover personal property, or its value, alleged to have been transferred by the insolvent to the defendants within one month before the filing of the petition in insolvency, with a view to give a preference to the defendants, and with reasonable cause by them to believe that the debtor was insolvent, where there is evidence tending to show that the defendants knew of the insolvency at the time of the transfer, and that the transfer was intended to prefer them as creditors, the fact that there is other evidence for the defendants going to show that the witness who has so testified acted in bad faith in the transaction, and is not worthy of belief, and that the transfer was for another purpose without knowledge of insolvency, has no place in discussing the question as to whether there is a conflict of evidence as to the purposes for which the transfer was made.
Id.—Evidence—Agreement of Creditors to Turn Over Business— Intent of Parties—Void Contract.—Evidence of an alleged understanding between the insolvent and the defendants, who were wholesale creditors selling him goods on credit with which to carry on business, that he would trade with no other house, and, that if, at any time, he failed in the business, or should cease to carry it on, he should turn the place and stock on hand over to the defendants, is only admissible on the question of the intent of the parties in making the transfer; but such agreement, if good between the parties, is void as against creditors, as being in direct contravention of the Insolvent Act, and constitutes no defense to an action by the assignee in insolvency to recover the property transferred in violation of the provisions of that act.
Id.—Transfer not in Ordinary Course or Business.—A bill of sale of an entire business and stock in trade is not in the ordinary course of business, and is therefore primas facie fraudulent and roid as to the creditors of an insolvent debtor making such transfer.
Van Fleet, J. Plaintiff brings this action as assignee in insolvency of one Healy, to recover certain personal property, or its value, which it is alleged was transferred by said Healy to defendants within one month before the filing of the petition in insolvency, with a view to give a preference to the defendants, and with reasonable cause by the latter to believe that said Healy was insolvent, in violation of section 55 of the Insolvent Act of 1880.
Verdict and judgment were for plaintiff, and from the judgment and an order denying a new trial the defendants appeal.
1. It is contended that the evidence is insufficient to sustain the verdict; that it establishes, without conflict, that defendants in taking the transfer acted in the utmost good faith, upon a valuable consideration, and without cause to believe that Healy was insolvent, or that he was making said transfer in contemplation of insolvency. And further, that it appears, without controversy, that the transfer was made and accepted in pursuance of a verbal understanding made between defendants and Healy in 1890, whereby the latter agreed that, in consideration of defendants, who were wholesale liquor dealers, selling Healy goods on credit with which to carry on business, that the latter would trade with no other house; and, if at any time he failed in the business or should cease to carry it on, he should turn the place and stock on hand over to the defendants.
The transfer complained of was made by the insolvent, Healy, who was carrying on the business of saloon-keeping, by a bill of sale made January 27, 1892, whereby he transferred to defendants his entire stock in. trade, saloon fixtures and furniture of every kind, accompanied by possession of the saloon.
Upon the question as to the purpose and intent with which this transfer was made Healy testified on behalf of plaintiff:
“I was not able to attend to my business myself at that time. I was at home at the time of this transfer. [583]I was sick and Thomas Donohue was running the business. I saw on that day that I would be unable to pay my bills as they came due, and for that reason I turned over my business to the defendants. I had friendship for E. Commins & Co. in a business way. They started me up and that was all—nothing more than in a business way. I sent Thomas Donohue to the place of E. Commins & Co., to see them with reference to turning the saloon and business over to them.
More from California Supreme Court
- People v. Wende (1979)
- People v. Watson (1956)
- People v. Superior Court (Romero) (1996)
- People v. Kelly (2006)
- Auto Equity Sales, Inc. v. Superior Court (1962)
- Aguilar v. Atlantic Richfield Co. (2001)
- People v. Lewis (2021)
- In Re Estrada (1965)
- Denham v. Superior Court (1970)
- People v. Marsden (1970)