Court Opinion

ID: 6409903
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:51:53.804463+00
Date Added: 2024-06-11T15:51:20.230804
License: Public Domain

Dewey, J.
This is an action of trover by the plaintifi, as assignee of one Asa B. Clarke, an insolvent debtor, to recover the value of a stock of goods claimed to be held by the defendant under a mortgage from said Clarke. The mortgage was made prior to the institution of proceedings in insolvency, and duly vested the property in the defendant, unless the same was void under the provisions of the insolvent laws, St. 1838, c. 163, and St. 1841, c. 124, more particularly § 3 of the latter, providing that if a debtor shall, within six months before the filing of the petition, being insolvent, make any assignment or conveyance, absolute or conditional, of hie property, intending to give a preference, &c. the assignees may recover the full value of the property, or the property itself, from the creditor so preferred, “ provided the creditor, when accepting such preference, had reasonable cause to believe such debtor was insolvent.” " The present mortgage was made to the creditor within six months previous to filing the petition before the commissioner of insolvency and the mortgagor, as it is now made to appear, was at the time of giving the mortgage insolvent.
The only question at issue, therefore, was whether, at the time of receiving the mortgage, the mortgagee had reasonable cause to believe the mortgagor was insolvent. To sustain *548the defence on that point, and to rebut the presumption arising from the fact of actual insolvency now shown, the defendant offered in evidence the facts and circumstances directly connected with, and a part of the same transaction, now alleged to be in fraud of the insolvent laws.
From the evidence it seems that before taking the mortgage, the defendant made the inquiries of Mr. Beach, and received the answers stated in the report. Having made these inquiries in the absence of Clarke, the insolvent, all the parties immediately after came into the adjoining room, and the defendant received from Clarke the further answers, as stated, confirmatory of the solvency of Clarke, and thereupon the defendant agreed to take the mortgage, which is now the subject of this controversy. The evidence of the statement of Clarke to Kibbee was not objected to, but only the statement of Beach.
As to this, the first objection urged is that it took place in the absence of Clarke. We do not perceive how that can be a valid objection. It was the natural course of an inquiry made to ascertain the solvency of the party with whom he was about to deal, and it was not denied but that the inquiries were directed to a suitable person, as to his general knowledge of the citizens of the town or capacity to give information on such subjects. The inquiries, as appeared in the present case, were a part of the circumstances of the actual transaction of taking the mortgage, and were properly introduced to show the precautionary measures taken by the defendant to ascertain if he might with safety take such mortgage. Such evidence is, of course, always open to all questions of its bond fide character, and also to the fitness of the person applied to, all which was for the jury. It is, however, objected to a portion of this evidence that it is a statement of the opinion of Beach, as to the solvency of Clarke at the time of giving the mortgage. It is to be remembered that the testimony was offered, not for the purpose of showing the actual solvency of Clarke at that time, but for the more limited purpose of showing that the defendant had reason to believe him solvent. For this purpose he may show that he made inquiry at the *549proper source, received an honest answer, and that answer was that he was solvent, and generally reputed to be so. The objection further urged that Beach had not the requisite means of knowledge, as he now says he had never heard the solvency or insolvency of Clarke discussed, does not require the rejection of the testimony that he told the defendant, in answer to his inquiry, that he considered Clarke solvent. Whether the whole statement of Beach tended to satisfy them that the defendant had reason to believe Clarke solvent, was wholly for the jury. The court are, therefore, of opinion, that this evidence was admissible for the limited purpose for which it was offered and used.
The plaintiff objected also to the admission of certain papers and copies under the hand and certificate of the clerk in insolvency. The question arises here whether the clerk in insolvency is a certifying officer. The St. of 1838, c. 163, § 14 requires that all the papers in the proceedings in insolvency be returned to the probate office, and makes the register of probate the certifying officer of all papers, after the proceedings are closed. But the parties stipulated by a written agreement, filed in the present ease, that all copies of papers and original papers filed with the commissioner in insolvency may be used, if competent evidence, without further proof, &c. The parties have, by mutual consent, removed all objection to the formal proof of these copies and papers. Indeed, the plaintiff himself offered such copies without further evidence, and it was open to both parties to do so under their stipulation. The objection suggested that one of these papers, being the copy of a petition filed by the defendant, asking of the commissioner in insolvency leave to withdraw one note that had been allowed, and to file another note, assigned as a reason therefor that by mistake he filed the wrong one, does not operate to exclude the paper. It was said that the party was not thus to make evidence for himself that the first note was filed by mistake. Certainly he is not, and the jury would, of course, be instructed, if the instruction was asked, that they were not to take that statement as evidence of the truth of that fact. It was competent to read this paper, however, as a *550part of the proceedings before the commissioner, and as showing that the first note was in fact withdrawn, and with the defendant’s assent. Judgment on the verdict.