Dunlop v. Thomas

Citations

• 28 Wash. 521
• 68 P. 909
• 1902 Wash. LEXIS 515

Syllabus

<p>BANKRUPTCY-FRAUDULENT CONVEYANCES-INADEQUACY OF CONSIDERATION.</p> <p>A sale of a stock of goods by an insolvent debtor for about sixty per cent, of its cost price does not constitute such, a grossly inadequate consideration as to put the purchaser, who was ignorant of the seller’s insolvency, on inquiry as to the seller’s intention to defraud creditors, and thereby entitle the trustee in bankruptcy to recover the property under § 67, subd. e, of the national bankruptcy act, where it appears that the merchandise, part of which had been carried on the shelves for several years, was of that character that it soon passed out of style, and there was testimony of competent witnesses to the effect that stocks of that kind would be closed out at from 45 to 60 per cent, of their cost price.</p> <p>SAME-ACCOUNTING BY PURCHASER.</p> <p>In such a case the purchaser cannot be compelled to account to a trustee in bankruptcy for the difference between the actual value of the stock and the price paid.</p> <p>SAME-PREFERENCES.</p> <p>The payment by an insolvent merchant on disposing of his stock of goods of the money due from him to one of his clerks for wages and money borrowed would not constitute a preference, which the trustee in bankruptcy could set aside, under § 60, subd. b of the national bankrupt act, providing that if a bankrupt shall have given a preference within four months before the filing of a petition and the person receiving it shall have had reasonable cause to believe that it was thereby intended to give a preference, the property or its value may be recovered from such person, when it appears that the clerk had nothing to do with the books and accounts of the firm and was ignorant of his employer’s indebtedness.</p>