The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1897-02-13

dorsed S1O25 of unndorsed
H. w. Schmidt and the owing the other cred
had paid and the defendant had sold goods and ad
vanced cash the of $5916s2 of which
$S751O had been paid
Although Lew was beyond doubt inovent and had commit
ted of bankruptcy Aug the date of his
with the defendant and this known the defendant
vet upon and also upon of the mortgage far
known TO the defendant he msoven and had not
of bankruptcy from which he had
he in contemplation of insolvency bank
rupcy. He had made a and the defendant entered
agreement him only suppositon that all his
debts had been satisfactorily settled compromised provided
for and that H. w Schmidt Sons his principal creditors
had acquiesced in the arrangement
But argued that if the defendant had taken reasonable
precautions would have learned of the unndorsed and
Levys unsettled book with H. w Schmidt Sons and
would have learned that Levy nsoven We need
express opinion what would be the result if the defend
had known that those had been and that the
book account had not been finally settled for of the
opinion that under the circumstances the defendant
bound take such steps would have been enable
ascertain these facts Levy opened of books
August and entered therein his only Indebtedness
H. w. Schmidt Sons the Endorsed for $500 He
entered IN his old books bills payable $500 and proht and loss
$997OO2. There entry of the unndorsed for
either of books conended that the defendant
should accepted Levy of his affairs
should have examined his old books; such examination
would have disclosed the false entry profit and
loss and shown that the Indebtedness to H. W. Schmidt & Sons
instead of about $4,000 stated Levy
that this knowledge would have neceaed further inquiry,
that is of H. W. Schmidt Sons personally which would have
resulted in full disclosure of the
obliged every instance examine the books of his morgagor
before accepting mortgage. This would be necessary pre-
relied in this that the defendant knew that
Levy had been losing business for and
had purchased of his goods of H. W. Schmidt Sons and
therefore probably indebted them in large
But showed this namely
he owed H. W. Schmidt Sons large amount about $SOO0
and that this probably strongly
boraed by the the signature of H. W. Schmidt
Sons themselves showing this of Indebtedness and
that settled by the inOrsed for $500 There
nothing all to indicate that Levy books would show
different of facts The of H. W. Schmidt &
Sons would naturally disarm the defendant of any sspons
that might otherwise have had with reference Levy in
debedness them And the honesty of Levy himself
questioned in the least that me shown by the plaintiffs
witnesses well by the witnesses for the defendant
There therefore nothing that called examination of
LEWIS books bv the defendant the had reasonable
believe Levy be insovent 1t be added that
the testimony the effect only that the defendant
ally believed Levy be perfectly solvent after its
with him of August 1895, but also that II. w. Schmidt &
agreement with him of the date; also that the defendant
the position of endeavOrng obtain prefer
other creditors The proposition for the
from Levy and the entered into by
the defendant with future business than for the
purpose securing the past Indebtedness and actually sold
goods and advanced cash Levy thereafter the
about $4,000 1t is mmaera that H. W. Schmidt q Sons
innocent parties the defendant also being innocent The
trouble has evidently through the cOnceament and
of third party Levy AS between innocent
parties, the loss if due to the fraud of third party
remain where it falls.
The question the effect of the of the mogaged
goods taken by the defendant short time before Lev bank
rpcy, is raised by the pleadng this and will
be considered
appealed the bill dismissed
with costs.
4. s. Hartcel, for plaintiff.
ThurstOn ce Stanley, for defendant.
IN THE SUPREME COURT OF THE HAWAIIAN