Summary
In Hass v. Whittier etc. Co., 87 Cal. 613, the transfer was made to a creditor, and it was charged that the transfer was in violation of section 55 of the Insolvency Act.
Summary of this case from Salisbury v. BurrOpinion
Department One
Hearing In Bank Denied.
Appeal from a judgment of the Superior Court of Los Angeles County.
COUNSEL
Barclay, Wilson & Carpenter, for Appellants.
Chapman & Hendrick, and Graves, O'Melveny & Shankland, for Respondent.
JUDGES: Vanclief, C. Foote, C., and Belcher, C., concurred.
OPINION
VANCLIEF, Judge
The object of this action is to recover from defendants $ 856.99, the value of certain personal property alleged to have been sold and delivered to defendants by the insolvent in payment of his debt of $ 900, within one month before the filing of the petition against him by his creditors, contrary to the provisions of section 55 of the Insolvent Act of 1880. The judgment of the court below was in favor of plaintiff for the sum demanded, and the defendants appeal on the judgment roll, contending that neither the complaint nor the findings of fact states a cause of action. A general demurrer to the complaint was overruled.
So far as applicable to this case, section 55 of the Insolvent Act is as follows: "If any person, being insolvent, or in contemplation of insolvency, within one month before the filing of a petition by or against him, with a view to give a preference to any creditor or person having a claim against him,. .. . makes any payment, assignment, transfer, or conveyance of any part of his property,. .. . the person receiving such payment,. .. . having reasonable cause to believe that such person is insolvent, and that such. .. . payment. .. . is made with a view to prevent his property from coming to his assignee in insolvency, or to prevent the same from being distributed ratably among his creditors, or to defeat the object of, or in any way to hinder, impede, or delay the operation of, or to evade any of the provisions of this act, such transfer, payment, conveyance, pledge, or assignment is void, and the assignee may recover the property, or the value thereof, as assets of such insolvent debtor."
It is neither alleged in the complaint nor found as a fact by the court, that the insolvent transferred the property to the defendants "with a view to give a preference to any creditor or person having a claim against [25 P. 918] him"; but it is found that the transfer was made to and received by the defendants in satisfaction of a valid debt of nine hundred dollars due them from the insolvent.
It is further found, however, that the property was received by the defendants "with a view to give said defendants a preference, and to pay said indebtedness to said firm (defendants) before and in preference to all other creditors of said Edgar Sessions, and with a view to prevent the said property so transferred from coming to his assignee in insolvency, and to prevent the same from being distributed ratably among his creditors, and to defeat the object of the said Insolvent Act of 1880; and the said defendants, and each of them, at the time of said assignment and transfer and acceptance of said property, had reasonable cause to believe, and as plaintiff is informed and believes well knew, that the said Edgar Sessions was insolvent, and that said transfer and assignment was made for the purpose above mentioned," -- this finding being copied from the complaint.
Unless the insolvent transferred the property with the view or intention to give preference to some creditor or person having a claim against him, it makes no difference what were the views or motives of the defendants in receiving the property, or what they suspected or believed about the solvency of Sessions.
I think the judgment should be reversed, and the cause remanded, with instructions to the court below to sustain the demurrer to the complaint.
The Court. -- For the reasons given in the foregoing opinion, the judgment is reversed, with instructions to the court below to sustain the demurrer to the complaint.