Court Opinion

ID: 9304926
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:16:02.136186+00
Date Added: 2024-06-11T17:13:51.587529
License: Public Domain

McKennan, O. J.
The complainant is the assignee in bankruptcy of John Ramsey, and now seeks to recover from the respondent the value of certain real estate conveyed to him by the bankrupt in alleged fraud of the bankrupt law.
The respondent was not a creditor of the bankrupt, but took a conveyance from him of the real estate described in the bill as a mere intermediary, at the instance of Solomon A. Kneedler, his father, who purchased it from Ramsey, and by whose direction the respondent conveyed it to one Newcomer more than a year before the filing of this bill. It is apparent that he derived no direct benefit from the transaction, if there was any profit to any of the parties to it, and that he can be held liable only upon clear proof of his complicity with the bankrupt in the fraud charged in the bill. The elements of this fraud are — First, the insolvency of the bankrupt at the date of the conveyance; second, reasonable cause to know this fact by the respondent; and, third, an intent by the bankrupt and the respondent to defeat the operation of the bankrupt law, by preventing the property conveyed from being appropriated to the benefit of the bankrupt’s creditors, or to hinder, delay and defeat them.
Of the insolvency of the bankrupt at the date of the conveyance there is no doubt. Whether the respondent actually knew it may fairly be doubted, but that he had knowledge of facts from which the bankrupt’s condition ought to have been inferred, may be assumed as proved. That he shared the bankrupt’s intent to defeat the operation of the bankrupt law, *674is more than a questionable resultant from all the proofs in the case. We have examined them carefully since the argument, and our estimate of their import is that they fall short of establishing an illegal intent on the part of the respondent in taking a conveyance from the bankrupt.
We do not deem an analysis of the proofs necessary. It is enough to say that they are insufficient to make out a fact essential to the complainant’s right to a decree, and his bill must be dismissed, with costs.