Court Opinion

ID: 6419325
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:58:32.805571+00
Date Added: 2024-06-11T15:51:43.036287
License: Public Domain

Lord, J.
At the time the defendants made the advance, Knowlton and James were apparently in good credit. Such advance, made in good faith and in the belief that the consignors were solvent and with no contemplation of bankruptcy, would entitle the defendants to hold the same against the assignee of Knowlton and James in bankruptcy, should the firm afterwards be adjudged bankrupt. The defendants offered to prove that the mortgage to the plaintiff “ was made with intent to defeat and defraud the creditors of Knowlton and James, and to keep the property from coming into the hands of such creditors, and that the plaintiff shared in this fraudulent intent.” If this was so, the plaintiff, by such fraud, could acquire no title against the defendants, who, the next day, in good faith received the goods and made such advance upon them. This is elementary. It is to be observed that the offer is not simply to prove a voluntary conveyance without consideration, but to prove a fraudulent purpose, in which the plaintiff participated, to defraud creditors.
According to the bill of exceptions, we must understand that the presiding justice ruled such evidence to be immaterial.
We are not, however, without strong apprehension that the presiding judge understood the offer of proof to extend no further than to show that the mortgage to the plaintiff was fraudulent only as against an assignee in bankruptcy, by reason of its giving to the plaintiff a preference over other creditors under the bankrupt law. That is a very different question. The bill of exceptions shows that, beside such offer, the offer was, in terms,. that the mortgage was made with intent to defeat the creditors of Knowlton and James, and to beep the property from coming into their hands, and that the plaintiff shared in this fraudulent intent. And we should be very strongly inclined to construe the subsequent offer, “ that, at the time the mortgage was given, Knowlton and James were insolvent, and were indebted to the plaintiff, and the mortgage was made with intent to prefer him, and the plaintiff knew all this,” as a limitation of the previous offer of a general fraudulent purpose to defeat creditors, except that the point is distinctly made, and was strongly urged by the defendants’ counsel at the argument, that the ruling *127went to the full extent of deciding that, if the mortgage was fraudulent and void at common law, such fact would be immaterial under the circumstances of this case. Ho suggestion was made by the plaintiff’s counsel at the argument that such was not the true construction of the bill of exceptions. And though, as before stated, apprehensive that the presiding judge did not intend thus to rule, we think that, as the offer appears in the bill of exceptions, we are compelled to give to the ruling such construction. ¡Exceptions sustained.