Court Opinion

ID: 7969516
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:53:50.890467+00
Date Added: 2024-06-11T16:34:44.180059
License: Public Domain

CANTY, J.
I concur in the result. Although plaintiff knew that Wark was insolvent when it took the chattel mortgage from him, it did not enter into any deliberate scheme to evade the provisions of the insolvency law prohibiting preferences, as seems to have been the *413case in Thompson v. Johnson, 55 Minn. 515, 57 N. W. 223, where the creditors of the insolvent debtor took the property of the insolvent for the debts due them, but paid some cash for the very purpose of taking the transaction out of the statute. As the statute does not apply to a cash transaction, and the cash consideration could not be separated from the consideration furnished by the previously existing indebtedness and the property apportioned accordingly, the parties seemed to have conceived this scheme as a way to beat the statute. But in the present case the parties did not enter into any such scheme. The creditor did not act in positive bad faith. The cash part of the transaction can be separated from the part of the transaction giving a preference to the prior existing indebtedness, and as to the latter the transaction should be set aside. But for the cash advanced plaintiff is entitled to retain its mortgage on all the mortgaged property. In my opinion, the case of Baumann v. Cunningham has little or no bearing on this case.