The Portland daily press., 1869-07-28
Terms $500 per dasnmns, iss adrance.

oouVeN .r. "n'v 10 maue IN fraud oil the provisions
The very same section declares that when
such conveyance is not made in the ual and
ordinary course oi business OF the deDtor the
fact shall be prinaG fdcie evidence OF Iraul.
This last provision, is lound at the close of
tine paragraph which declares certain convey
ances fraudulent when made wi hin six
months, and IS not at the close OF the proceed
inc paragraph, decla ing certain conveyances
in preference OF creditors and others. TauIu-
lent il made within tour months. 1t nay
con ended therefore, thai the presumption OF
fraud is applicable only to fraudulent convey
ances and not to preferences.
The provisions OF the 3Jth section OF the
bankrupt act were exLIacte almost We. batm.
iro"the nsolvent law Of Mass achLsetts and
are 10 he oand in the S9th al D1s5 section.
ehaplet lis OF Mass General Statutes, the
SDCh prohibiting trauduien. preierences and
tue 91st fraudulent conveyances At the
close oil the 9lst section 1t Is derared shat IL
the sale &c, IS not made in the usual and or
dnary course oil business OF the debtor that
fact shall be prma iace evidence OF sncn
cause OF be.iel," In the bankrupt Act. the Ian
gua.e is, shall be prima evidence OF iraui"
In Masssach lsetts, Notwithstanding this
provision, is lound at the close OF the 9lst
section and is not iE the S9fh, 1t has been
decide !, that it applied TO causes under both
sections see 9Th Allen 451 Nary VS. Merrill
~.
Munson, and am Inclined to adept this as
the true Con truction of this clause IN the
Both section OF ths Bankrupt Act especially
as all the provisions are there nited in a sim
gle section anu not found In different sactlous
as in Ma ssachusetts Act Such, I uhoer-
stand. is the construction which has been
giveI, to this clause by the Dis rict ourts--
| Isl, b r. l6o. iih
1t is too plain Tor argument, that this m rt-
| gage was not in the usual codfse OF e. e bank
| rupts business 1t is therefore TO te taken b.
ue as fraudulent, nn ess the eontrar, is es-
tablished. Tue burden is oa the re-
spoudents to explain tue transnton;
this they have attempted to do, by their abs
Lutte and I'm qualified statements that t.ey
had no knowled e OF the insolvency OF the
btnkrup.s and had no helie'i on reason to be-
leve. that su b was their condit on and that
they did not receive the slme With any in
tent to obtain a preference Much OF this
statement was cleail, inadmi,sibIe and
should have no influence upon the judgment
| o, the court. N
The question raised by the ststute Is not
| the actual belief OF the respondents, buS is
| what the, have reasonable cause u believe,
| and the iacts and circumstances satisfy my
mind that they bad reasonable cause TO be-
| iieve that tue bankiupts were lnsolvent and
| intended a preference i am bound to declare
| the conveyance void, although | might be
enough to have believed the contrary
In 18th Gray 35, Coburn vs. Proctor and
| AL, Bigelow ]. has clearly and conclusively
expounded the like provision. In the Massa-
| chusetts insolvent Law. He says. "the actu-
al belief of the defendants as to the solvency
| OF the debtor was wholly immateriaL The
/ only inquiry which, under the statute, was
| relevant to the issue was, whether tue de-
| iendants bad reasonable cause to believe the
| debtor insoivent, that IS, whether IN view Of
| all the facts and circumstances which were
known 10 The defendants, coneernfr G the bus
mess and peccnlary condition oil the debtor,
ID connection with the time and mole oi the
TRANSFER OF the property taken; taey, as rea-
| sonable men, acting with ordinary prudence,
| sagacity ana discretion had good ground 10
1 believe that the debtor was insovent. This
| was the only legitimate subject oil inquiry as
1 to the belief OF the defendants which could
be properly gone into before the Jury. l: was
not intended by the statute to make the actu-
al belief Of the party, concerning the solvency
| of the debtor, one OF the standards by which
to test the validity OF the transfer OF property
| to him. Such belief might or might not, be
/ well founded. 1t would be an uncertain and
| fuctuating standard. That W ich would at
! is one man would be wholly insufficient to
convince another; and those iacts which
| would fall tar short O Producing belief IN
i person who was disfnterestee and impartial,
1 might have different effect upon the same
i person when acting under strong influence
OF sell interest. In the place OF a test so un-
certain and unsatisfactory, as the belie Of
party, lormed under great bias, the statute
estaol bed one much more sale and definite,
| applicable to all persons alike, and easily un-
derstood and read'ly applied by jury The
| heiiet OF reasonable man taking transfer oil
property under like crcu Instances"
| Turning now to The iacls and circumstances
as here developed, what conclusions snoud
dislnterested and impartial mind draw from
Them? One OF The respondents was direc-
tor OF the bank 10 which the hankrupts at
this time we indebted Sl5dO,-$750 OF which
| was past due and unpaid. and tor this the
oIheI respondent wa liable anil although Cole
| swears that at the lime he received Lhe mort
1 aase be on,y knew that one note was past
1 due at the banks, Chadbourne says, "tuat
Cole and Hooper both knew from what was
i said to them, tnat these notes in TIE oank
wefe overdue and unpaid y And 1t would
Ger, ainly b. somewhat unusual, 1t bank di-
i rec.or i.i Bidieiord was ignorant tn t two
4 . tes held by tue bank amounting 20 S75o
and which had been take1 ia rem swaf of
| lorsDer discounts remained overdue ior some
/ Siule, particularly when such director was
4 aimseli a surety Tor the prinei al Tor larger
| SUNS due 10 other pal ties, a portion ot which
was also oseIdue-t IS quite un. eascnabe to
/ ask the court 10 presume party to he SO in
/ attentive TO bis trust as director, ana 50 g.
4 horaDt o. the condition oil one tor whom he
was so largely aecnaatabie. .lg.e4I ,'t |l.i s.i
From the evidence, Il must conclude that
| Cole and Hooper were aware That The paper
oi the bankrupt 10 The amount Of $3.50 and
1 upon which one or the other we're sureiesf
/ was o, efdue al the time OF the negotiation o,
the mortgage, and tnat s'tnlar paper TO a
larger amount woull soon fall due, none OF
i winch could tDe bankrupts discnarge except
Il Dg W mort age OF their estate. as the b nk-
1 fupts then in,ol med theu.
| TIE language OF Biatchiord j. in 2 B r.
| ls6 IN re Dibb.es and aIs-is quite app pi abe.
| he there sa, ; '-Dllt one override debt is III
! eient 10 put patty in the condition OF ,wIng
| } debt which he IS unable 10 pay II, al the
| time the sheriff appeared with, the execution,
/ TO levy on the stock OF goods, the nm owed
1 this uebt and ere unable u pay il, IN The pr-
5inary course Of their bu mass they were
l tnen InsolVsbI in toe lau u1se OF The bank
fupt act, and lis meaning. No mailer how
| many other debts there were not yet aue, II
| they we're unable to pay that debt in The or
| dinart course OF thei business they were in.
l solvent. sfhe ordinary course OF Their bust
/ ness docs not mean an ability 10 turn tneir
| goods or bills receivable, Nr assets or securi-
ties to pas that one particular deb, at the
SAME time leaving other debts which are GER
tain to become due unprovded l.r, and not
i leaving sufficient assets in the hands o. the
| debtors to meet them when they become due.
II is not In the ordinary course Of business for
party who has stock OF goods and otner
securities aud owes mature debt to tnrn out
| a large portion OF those goods, ur to take the
4 no st valuable OF his security and turn item
over t. tne creditor to extingtish that debt, II
sufficient assets do not yet remain 10 pa, the
1 rest OF bis debts In the ordinary course OF bus
business, that is an extraordinary course OF
business, and not the ordinary course OF bus-
/ ness That remark well cnaracterizes this
mortgage now under consideration. 1t was
! an extraordinary proceeding These respon-
| dents not only had reasonable cause TO be-
| Iieve the baDkrupts were then insolvent. but
| from the information communicated to them
| by the bankrupts at the time OF the negotia-
| ton ior the security, find that they had ac-
| tual knowledge oil the insolvency. l..e ..ft .
| The bankrupts having intended prefer
enee OF the respondents, did they not, at the
| time, have Reasonable cause to Oelleve such
| was the design in giving the morlgase?-
| Having Already dwelt at some len ,th on the
| facts aud circumstances which have satisfied
| me that the bankrupts intended preference,
| it is not necessary tha. they should again be
repeated. 1t is sufficient to say, that ind
that Cole and Hooper were perfectly cognlz-
| ant o the NEST important OF them ana as
men ofordinaIy intelligence they CO... -.
| but have bad reasonable cause to believe that
it was intended to awe them preference
| They were aware that all demands Tor wtlich
/ they could be held liable. as well Tor the inui-
| yidual members as Tor The nrm and whether