Court Opinion

ID: 6425338
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:03:25.842145+00
Date Added: 2024-06-11T15:51:57.714998
License: Public Domain

Lathrop, J.
The first, second, and fourth requests for instructions were properly refused. The plaintiff relies upon the case of Gorham, v. Stearns, 1 Met. 866. That case was decided under the St. of 1838, c. 163, § 10, where these words occur: “ in contemplation of his becoming insolvent, and of obtaining a discharge under the provisions of this act.” It was held that it must be shown that the debtor contemplated going into insolvency and obtaining a discharge. This was changed by the St. of 1841, c. 124, § 3, so as to read, “being insolvent, or in contemplation of insolvency.” See Ex parte Jordan, 9 Met. 292. As the law stands today, Pub. Sts. c. 157, § 96, it is enough to show that the debtor was insolvent; that the conveyance was made within six months before the filing of the petition, and was with a view to give a preference, and that the person to whom the conveyance was made had reasonable cause to believe the person making the conveyance to be insolvent; and that it was made in fraud of the laws relating to insolvency. As is said by Chief Justice Shaw in Denny v. Dana, 2 Cush. 160, 171: “ Contemplation of insolvency is one of the cases in which a preference shall be avoided, but it is not the only one; the other is the being in fact insolvent, under the circumstances, and with the incidents mentioned. Actual insolvency of the debtor, and reason*188able belief, on the part of the creditor, that he is so, without contemplation of insolvency, constitute a fraudulent preference.”
And it is generally the rule, that, if the jury find that the person making the conveyance was insolvent at the time that it was made, and that it was made with a view to give a preference over other creditors, and that the person to whom the conveyance was made had reasonable cause to believe that his grantor was then insolvent, they will be authorized in finding that the conveyance was in fraud of the insolvent law. Abbott v. Shepard, 142 Mass. 17.
The third and sixth requests were properly refused. The fact that the defendant assumed a new liability by taking the mortgage cannot avail him, if the mortgage was also given as security for a pre-existing liability. Denny v. Dana, 2 Cush. 160, 172. Forbes v. Howe, 102 Mass. 427, 436. Peabody v. Knapp, 153 Mass. 242.
The fifth request for instructions was properly refused. It is taken from Smith v. Merrill, 9 Gray, 144, though it omits all reference to the question whether the conveyance was made with a view to a preference or not, which appears in the instruction in Smith v. Merrill. In view of the evidence, we are of opinion that the judge gave all the instructions necessary upon this point. Exceptions overruled.