The Providence news. (Providence [R.I.]) 1891-1906, 1897-04-30
BEN, DISMISSED.
DeccsuG Iii The Case Of
Con- VS.. the Scars 81
Object Was to Set Aside
Transfer of Rubber Stock.
Court Holds that the Lapse of Eight
Years Bars Any Relief.

! Ihis morning the decision of the APP
| pellate Court in the case of Samuel T.
/ Colt, assignee, vs.. sears Commercial
/ Company ct al was handed down. The
| opinion of the court which Is very ex-
! tensive review OF the transactions between
/ the complainant and RESPONDENTS i'm re-
| gard Co certain bonds of the National
, rubber Company OF Bristol, holds that
the complainant Is not entitled 10 recover
and the bill must be dismissed. These
bonds have been the subject of much
! litigation.
Inc object of the bill was TO set aside
transfer of bonds made by the National
Rubber Company TO the Scars CONNER
cial, on the 10th of September, 1887, AS
collateral security 10 note Of that date
nade by the rubber company to the Sears
| Company for S20, 091. 80 on the ground that
said transfer was preference under Pub.
stat, Cap. 231, sec. 10. and therefore
liable TO Le SET aside by the assignee
This section as amended by Public Laws
X L. Cap. pa, Is as follows Convey
ances and payments made and securities
given by an insolvent debtor or by a
debtor in contemplation Of insolvency
within 60 days before the commencement
OF proceeding against such debtor, under
the provisions OF sections IL and l3 Of this
chapter shall be yoid as TO all creditors
receiving the samo who shall have reason
able cause To believe that such debtor was
insolyent at the time OF such preference,
and the assignee Of such debtor may sue
and recover the same 80
The court says, Even admitting that
the evidence shows the giving of the Sc
curity in question amounted to a prefer
ence within the meaning of said statute
as to that part Of said note which repre-
sented the debt uue to the Scar sCom-
mercial Company, although it was clearly
DYpiprNlra xxh hiah
represented the debt To Grace <, Co.
Bunshiel VS.. Firman ~ Wall II, yet we
are of the opinion that the complainant
with full knowledge of the transaction
has elected TO treat it as valid, and that it
is now too late To set aside Z"
The facts relating to the transaction are
these: On Sept. 20th 1887, the National
Rubber Company was indebted to the
respondents, William II. Grace ~ Company
in the sum OF sl2, lS2. 0i, on its demand
note of May 10, 1895, then more than two
years overdue as collateral security for
which Grace " Co, held the bonds of the
Rubber company To the amount of $l5, 5OO
together with accumulated interest cou-
pons thereon TO the amount of $3.50
Grace ~ Company were indebted TO the
rubber company in the sum of 1875. 0S
for rebate OF insurance on certain syndi-
cate contracts, thus making the net in
debtedness of the rubber company to
Grace d Company So 36S. 86 The rubber
company at the same time WAS indebted
TO the Sears Commercial Company, upon
three notes given in the regular course of
business amounting To 50 166 10 which
notes were unsecured An arrangement
was entered into between the rubber
company, acting through its treasurer Mr..
Augustus q. Brown, on the one side and
Grace X Company and the Sears Company
on the other, whereby said debts were
consolidated. That is to say: Tho Sears
company advanced To the rubber com
pany Sl2, lS2 04 in cash with which the
rubber company paid off its Indebtedness
20 Grnce d Company. whereupon the
rubber company gave to the Sears Com
pany new demand note for s2O, 097. So this
amount representing the net indebted
ness of the rubber company 20 Grace 81
company which bad been taken up by
the Sears Company plus the debt of the
rubber company to the Sears Company,
and the bonds which had been neld by
Grace * Company were then and there
transferred 10 the Sears Company, as col
lateral security for the last mentioned
note
The rubber company on October 10th,
1891 made an assignment to- Colonel ;.
r. Colt and he came into possession of the
books and papers of the rubber company.
From this fact ana long correspondence
between tho parties that tho assignee
paid the overdue interest ON bonds LETT in
as security which fell due in July,
1894 part OF which interest was paid
after he had learned that the Sears
Company bad sold the bonds TO the respou-
dent Schaeffer, the present holder, the
court feels bound TO hold that the assignee
had full knowledge of the manner in
which the bonds were held, and that he
elected 20 treat the transaction as valid |
and binding.
The rubber company's plant was sold |
To the National India Rubber Company |
in April, 1888 and provision was made !
for the payment by the latter company OF |
the principal and interest of the out |
standing bonds OF the rubber company |
and the National India Rubber Company |
furnished him with tho funds necessary |
TO meet the interest payments on the |
debt. The plant was sold under mort |
gage of 500, O00 given by the National |
Rubber Company to the Rhode Island |
Hospital Trust Company, trustee, TO secure ,
the payment Of bonds issued by the Ma |
tional Rubber Company.
The court further holds that it is too |
late, eight years after pledge was made,
TO equitably decide i'm favor of the as
signec against the respondents. In no.
gard 20 the claim OF counsel for the COM
plalnants that the transfers Of bonds was /
n preference and absolutely void and not |
merely voidablo the court thinks is not |
the law IN this state.
The opinion was written by Judge
lilliprhncf