Court Opinion

ID: 6409127
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:51:16.981009+00
Date Added: 2024-06-11T15:51:18.789638
License: Public Domain

Dewey, J.
The report of the auditor has reduced the questions in the present case to a single point; which is, whether, upon the facts stated, the transaction between the insolvents and the defendants is brought within the tenth section of the statute of 1838, c. 163. The ground, for charging the defendants with holding funds of their debtor, as preferred creditors, entirely falls. The facts find the defendants to have been creditors in possession of undoubted securities for their demands, having as sureties and indorsers persons of unquestioned credit. In this state of things, the principal debtors went to them and offered to pay a certain sum of money, and to give them new notes, with other indorsers, in discharge of the notes held by these creditors. These transactions, it is said, took place at a time when the debtors were embarrassed, and contemplated taking advantage of the insolvent law ; and these facts were within the knowledge of the defendants. The question is, whether here was an unlawful preference of these creditors, which should subject them to this action. We can perceive, in these dealings between the parties, no unlawful preference, which should charge the defendants. They were in no way benefited by the payment of the money, and the giving of the new notes. They held undoubted security for the amount of their demand against their debtors. This excludes all idea of an unlawful preference in their favor, by the substitution of the new notes, and the payment of the money. Others may have been benefited. The indorsers of the first notes may have been relieved by the substitution of the new notes with new indorsers; but the defendants were not benefited in a pecuniary way. Such being the state of the case, the de*174fendants are not liable, under the tenth section of the statute of 1838, c. 163. The case of Abbott v. Pomfret, 1 Bing. N. C. 462, and also in 1 Scott, 470, strongly sustains this view of the question. See also Thompson v. Beaston, 7 Moore, 548.

Judgment for defendant.