Court Opinion

ID: 7986574
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:26:20.457666+00
Date Added: 2024-06-11T16:35:13.034288
License: Public Domain

Cooper, C. J.,
delivered the opinion of the Court.
White & Fox, J. H. L. Gerdine and Barry & Beckett, for the appellees, filed a lengthy brief, meeting that of counsel for the appellants, but not discussing the question adjudicated here.
The twelfth instruction for the plaintiff should not have been given. By it the jury was directed to find for the plaintiffs if Cohen sold the goods to the claimants for the purpose of defrauding creditors, and the claimants knew or had good reason to believe that such was his purpose. It ignores the right of the purchasers in good faith to buy the goods to secure pay*229ment of their own debt, regardless of the purpose or intent with which the seller sold. The rule declared would be a proper one where a person having no connection with a debtor as his creditor, should for the purpose of enabling the debtor to convert his property into money or choses in action to defraud creditors, aid him in the scheme by purchasing his tangible property. But where one has a debt due him, and buys for the purpose of recovering that debt and not for the purpose of aiding and abetting the debtor to defraud his creditors, the rule does not apply, and if under such circumstances he pays to the debtor a small amount in money, being the difference between his debt and the value of the goods, and this payment is made not to aid the debtor to defraud his creditors, but solely for the purpose of recovering the purchaser’s debt by getting the goods, the purchase is not invalid though the creditor may have reason to believe that the sum so paid may be withheld from creditors by the debtor.
The test is whether the payment is made to aid the fraudulent debtor, or for the lawful purpose of securing payment of Ms own debt.

Reversed.