Case ID: f_140/html/0984-01.html
Source: Caselaw Access Project
Author: {"author": "DE HAVEN, District Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re HILL.
    (District Court, N. D. California.
    October 13, 1905.)
    No. 3,957.
    Bankruptcy — Conveyances with Intent to Defraud — Preferential Mortgage to Creditor.
    A mortgage given by a bankrupt to a creditor witbin four months prior to the bankruptcy, with intent to prefer such creditor, is a conveyance - or incumbrance made with intent to hinder, delay, or defraud hjs creditors, and void as against his trustee, under Bankr. Act July, 1, 1898, c. 541, § 67e, 30 Stat. 564 [U. S. Comp. St. 1901, p. 3449].
    In Bankruptcy. On review of order of referee.
    Thos. M. Osmont, for petitioner. •
    Edward C. Harrison, for trustee.
   DE HAVEN, District Judge.

This isa petition for the review of an order made by the referee, in effect adjudging that a certain mortgage executed by the bankrupt to the petitioner, on March 22, 1902, is void .as against the trustee; the referee finding that such mortgage was executed within four months prior to the filing of the petition in bankruptcy, with the intent and purpose on the part of the bankrupt to hinder, delay, and defraud his creditors.

Subdivision “e” of section 67 of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 564 [U. S. Comp. St. 1901, p. 3449]) provides that a conveyance or incumbrance of his property by a person adjudged a bankrupt, within four months prior to the filing of the petition, “with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, shall be null and void as against the creditors of -such debtor, except as to purchasers in good faith and for a present fair consideration.” The'mortgage here in question was executed On .March 22, 1902, and the petition upon which the adjudication in bankruptcy is based was filed July 22, 1902. The mortgage was therefore filed within four months prior to the filing of file petition. Dutcher v. Wright, 94 U. S. 553, 24 L. Ed. 130; In re Stevenson (D. C.) 94 Fed. 110; Cooley v. Cook, 125 Mass. 406. The evidence is, in my opinion, sufficient to justify the finding of the referee that the intention of the bankrupt in executing the mortgage was to hinder, delay, and defraud his other creditors. It is clear from the evidence that it was the bankrupt’s intention in executing this mortgage to give a preference to the petitioner. Such an intent upon his part is one “to hinder, delay, or defraud his creditors,” within the meaning of subdivision “e” of section 67 of the bankruptcy act; and, in determining whether a conveyance or transfer of property made by a bankrupt was in violation of that section, “the purpose and intent of the bankrupt only is looked at, and, if contrary to the act, is sufficient” to render such conveyance or transfer void. In re McLam (D. C.) 97 Fed. 922.

The order of the referee is affirmed.