Court Opinion

ID: 5461807
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:38:49.949271+00
Date Added: 2024-06-11T08:32:55.269798
License: Public Domain

By the Court, Clerke, P. J.
The defendant, at the trial, relied on the statutes of Connecticut in relation to insolvent estates^ and on the alleged fact that the pledgees to whom the Bridgeport Pire and Marine Insurance Company had transferred the note in question, as collateral security, had sold it previously to demand from the company of payment of the principal debt. * •
I. I can discover nothing in these statutes which makes - such transfers absolutely and per se void. They are void only when they have been made for the purpose of enabling the debtor, in view of insolvency, to give the person receiving the same a preference over other creditors of such debtor, and with the knowledge on the part of such creditor that the transfer was so made. It was, therefore, necessary for the defendant to prove the fraudulent intent. Nothing of the kind was attempted. On the contrary, the plaintiff’s counsel offered to prove that there was no such intent on the part of the insurance company, and that, at the time' of the transfer, its officers did not know of its insolvency» These offers were disallowed. But, in my opinion, even if the fraudulent intent to prefer was specifically proved, the defendant could not avail himself of" such a defence, The provisions to which I have referred were intended for the benefit of the creditors of the insolvent. His debtors can take no advantagé of them. They are under an obligation, at all events, to pay their debts; and if the creditors choose, they can, at any time, question the right of the preferred claimant to his exclusive appropriation of them. The Connecticut statute, (ch. 512, § 1,) sets forth that all conveyances, &c. made by any person in failing circumstances, with a view to insolvency, shall, as against the creditors of the person making such conveyance, &c. be void, unless for the benefit of all the creditors equally. The defendant does not interpose a claim in the capacity of a creditor, but denies *279Ms liaMlity as a debtor by virtue of these provisions to insure equality to creditors.
[New York General Term,
January 4, 1869.
II. In like manner, the defendant fails in his attempt to avail himself of an alleged want of a previous demand from the company of the payment of the. original debt, and want of notice of the sale. Ho such defense is set up in the answer or proved at the trial; and, if it was, I doubt whether the defendant could take advantage of it. The purchaser of such a security has a prima facie right of recovery on the production of it; and the maker cannot claim a verdict on the ground that it was not affirmatively proved that the pledgee neglected to demand payment of the pledgor, and to notify the latter of the sale ; and even if this omission was proved, the debtor, as I have said, cannot take advantage of it. This was an affair between the pledgor and the pledgee, or between the pledgee and the other creditors.
ITT. As to the objection that there was no proof of a previous resolution of the board of directors, authorizing the company to borrow money or pledge the property. The answer to this is, that nothing appears in the ease to show that the laws of Connecticut require such a resolution ; and even if they do, the court would not presume that the transfer had been made in violation of the law. This is a fact, if it exists, to be shown in defense. Illegality is never presumed. On the contrary, every thing must be presumed to have been legally done, until the contrary be proved. (See Nelson v. Eaton, 26 N. Y. Rep. 415.) And this, by the way, applies forcibly to the other objections of the defendant.
The judgment should be reversed, and a new trial ordered, costs to abide the event.
Glerlce, Sutherland and Geo. G, Barnard, Justices.]