Court Opinion

ID: 6433725
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:10:35.488411+00
Date Added: 2024-06-11T15:52:17.959952
License: Public Domain

Crosby, J.
This is an action brought by the trustee in bankruptcy of William J. Courtney and Fred J. Courtney, for the benefit of the bankrupt estate. The claimant contends that it is entitled to the fund in question by virtue of an order and an assignment, each of which is dated March 27,1914. The case was tried before a judge of the Superior Court, who made certain findings of fact and found for the claimant in the sum of $1,000, the amount of the fund.
*161The judge found that on March 27, 1914, the Courtneys, as copartners, made application for a license of the first class to sell intoxicating liquors in the defendant city; that with their application they deposited with Harry C. Smith, the city treasurer, a check for $1,000 payable to his order and signed by the claimant; that the applicants being without funds, borrowed from the claimant the amount so deposited. The check was sent by the claimant to Henry L. Parker, an attorney at law in Worcester, who represented both the claimant and the Courtneys in this matter; “thereupon Parker delivered to the treasurer the check and took his receipt, acknowledging the receipt of $1,000 from ‘Wm. J. and Fred J. Courtney as Wm. J. Courtney & Co., to apply on 1914 liquor license, if granted.’” The judge further found that the order hereinafter referred to “was delivered to the treasurer by Parker when the check was deposited and that in this particular he acted in behalf of the claimant . . . that the order was given by the Courtneys contemporaneously with the loan as security therefor.” The order is as follows:
“March 27, 1914.
Harry C. Smith, City Treasurer of Worcester, Mass. If we are not successful in having a liquor license granted to us, pay to James Hanley Brewing Company, Providence, R. I., or order, the sum of one thousand ($1,000) dollars deposited with you this day as advance payment or deposit with our application for liquor license. William J. Courtney, Fred J. Courtney.”
We are of opinion that it could have been found that there was an intention on the part of the claimant and the Courtneys that the order should operate as an assignment of the amount deposited with the treasurer, subject only to the contingency that it might be retained by the treasurer in payment of the fee due for the liquor license if granted.
The finding was warranted that the order was given as security for a present indebtedness. An order given as security for a present indebtedness operates as an assignment. Tripp v. Brownell, 12 Cush. 376. Lannan v. Smith, 7 Gray, 150. Macomber v. Doane, 2 Allen, 541. The order in question amounted to a present appropriation of the entire fund in the hands of the treasurer, subject only to the contingency that it might be retained by him in pay*162ment for the liquor license. The judge was warranted in finding that the money deposited with the city treasurer was the property of the claimant. Providence Brewing Co. v. Maxwell, 222 Mass. 123. An assignment is not the less an assignment of a present indebtedness even if it is qualified by some condition, contingency or limitation depending upon the happening of a future event. Gibson v. Cooke, 20 Pick. 15. Parkhurst v. Dickerson, 21 Pick. 307. Bourne v. Cabot, 3 Met. 305. Tripp v. Brownell, ubi supra. Buttrick Lumber Co. v. Collins, 202 Mass. 413, 422. Holmes v. Evans, 129 N. Y. 140, 145. 5 C. J. 910 and notes. The order was not an executory agreement merely to transfer the money deposited, but was a completed transaction, by which, for a valuable consideration, the title to the entire fund passed to the claimant, subject to be divested only in the event of a liquor license being granted to the Courtneys.
While the judge finds that at the time the loan was made the' Courtneys were insolvent and that the claimant was aware of that fact, it also appears that at the time the loan was made they had not been adjudicated bankrupt. Before such adjudication, they were at liberty to deal with their property as they saw fit, so long as they did not give a preference to any creditor or impair the value of their estate. Stewart v. Platt, 101 U. S. 731. Sawyer v. Turpin, 91 U. S. 114. As it is-found by the presiding judge that the order was given to secure a present loan, and as there is nothing to show that it was not executed and delivered to the claimant in good faith and without fraud, it was not an unlawful preference under the bankruptcy act. Atherton v. Emerson, 199 Mass. 199. Tiffany v. Boatman’s Institution, 18 Wall. 375. In re Sayed, 26 Am. Bankr. Rep. 444. McDonald v. Clearwater Shortline Railway, 21 Am. Bankr. Rep. 182, 186.
As we are of opinion that the claimant is entitled to the fund by virtue of the order for the reasons stated, it is unnecessary to-determine whether it would be entitled to recover under the assignment which the trial judge finds was not executed until sometime after the loan was made. See Bush v. Boutelle, 156 Mass. 167.
It follows that the ruling requested by the plaintiff could not. have been given and the entry must be

Exceptions overruled