Case Name: Samuel Thompson vs. John Stone
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1851-09
Citations: 8 Cush. 103
Docket Number: 
Parties: Samuel Thompson vs. John Stone.
Judges: 
Reporter: Massachusetts Reports
Volume: 62
Pages: 103–104

Head Matter:
Samuel Thompson vs. John Stone.
A discharge of an insolvent debtor is invalid, under St. 1844, c. 178, § 8, if the debtor, within one year before the filing of the petition in insolvency, paid or secured a preexisting debt, although the creditor, receiving the preference, had no reasonable cause to believe the debtor insolvent.
This was an action of assumpsit, tried in the court of common pleas, before Merrick, J., to whose ruling the defendant alleged exceptions. The opinion of the court exhibits the whole case.
F. Hall, for the defendant.
H. D. Stone, for the plaintiff.

Opinion:
Shaw, C. J.
The defendant having offered his certificate of discharge under the insolvent laws, in defence of this action, the plaintiff offered evidence tending to show a fraudulent preference of a preexisting debt, contrary to St. 1844, c. 178, § 8. The defendant insisted that the plaintiff was bound also to show that the creditor, who received the preference, had reasonable cause to believe the defendant insolvent. But the court decided, that such proof was not necessary to show the discharge invalid.
We are of opinion, that this decision was entirely light The section is as follows: No discharge of any debtor shall be granted, or valid, if the debtor, when insolvent, shall, within one year, next before filing the petition, pay or secure any preexisting debt, if the creditor proves, that the debtor had reasonable and sufficient cause to believe himself insolvent.
The validity or invalidity of the discharge is not made to depend upon the knowledge or state of mind of the creditor, to whom the payment is made, but solely on the intent and purpose, and cause of belief of the debtor only.
From the cases relied on, Ex parte Jordan, 9 Met. 296; Wall v. Lakin, 13 Met. 171; Denny v. Dana, 2 Cush. 171; it seems manifest that the defendant confounds the cases of invalidating the discharge, and recovering back the property from the creditor fraudulently preferred. For the latter purpose, that of recovering back the property by the assignee, the intent and purpose, the knowledge and belief of the creditor, when receiving the property, are essential elements in the inquiry. Exceptions overruled.