Court Opinion

ID: 8175251
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:20:20.982352+00
Date Added: 2024-06-11T16:39:55.236521
License: Public Domain

DeNt, Judge,

(dissenting) :

Faulconer was bound to sell his property or permit it to be sold by the officers of the law. There were judgments against him, creditors were pressing, and without a moment’s warning he could have been closed up. To let it be sold would have entailed great loss. Jordan was the only buyer. He offered a fair price, more than it would bring at forced sale, and without expense.
So ho made the sale, which is held entirely free from actual fraud. A large portion of the purchase money had to be applied on lions, leaving a balance of little more than sufficient to pay off the bank debt. Jordan could not pay this over to Faulconer without laying himself open to the charge of aiding him to- delay, hinder and defraud his creditors. So he asked Faulconer what ho should do with this monejg and he told him to pay off the bank debt. This was perfectly natural, as the bank debt was a debt of honor, while the other debts were owed to parties who had been making a profit out of his business. The common law permitted him to make this application. The amount applied was simply a claim he held against Jordan.for a balance, and which the statute exempts *609from the provisions thereof, and permits him to apply to the payment of pre-existing debts. As to this sum, he had the right to prefer one creditor to another. To bring such preference within the meaning of the statute the court must hold that it was the inducement that brought about the sale. That is, that the sale would not have been made if it had not been for the purpose of securing such preference.' That Jordan purchased and Faulconer sold with this end in view. Faul-coner and Jordan both swear positively that they neither had such end in view. To hold to- the contrary we must reject their sworn testimony and regard them guilty of false swearing simply from the fact that Faulconer had the balance so applied instead of dividing it pro reda among all his creditors, none of whom would have been greatly benefited thereby. It seems to me the facts and circumstances in so far as adverse thereto are wholly insufficient to overcome their positive testimony, sustained by the numerous facts and circumstances supporting the same, among which is the most potent fact, that Faulconer was bound to make this sale or permit his property to be sacrificed at public sale. It may be that they testified falsely, but the facts and circumstances are not sufficiently adverse to them to justify me in so holding. If their testimony is rejected the fraud charged in the bill is fully established.
If the sale had been perfectly voluntary on Faulconer’s part, and he had not been pressed to the wall and forced to- make it as a last resort, I might reach a different conclusion. His purpose in selling was to save himself as far as possible, and it was therefore meritorious. Having made a lawful sale he had the right to apply the surplus proceeds to any of his debts he saw fit, without subjecting any of his creditors to the charge of obtaining or securing an unlawful preference.