In re Sycamore Grain & Milling Co.

Citations

• 221 F. 468
• 1914 U.S. Dist. LEXIS 1298

Syllabus

<p>1. Sales <§=316—Feaud—Concealment op Financial Condition.</p> <p>One who, knowing that he is insolvent and without reasonable expectation that he will be able to pay, obtains property on credit from a vendor ignorant of his insolvency, is deemed to have fraudulently acquired such property, and it may be reclaimed by the vendor.</p> <p>[Ed. Note'.—For other cases, see Sales, Cent Dig. §§ 890-895; Dec. Dig. <§=316.)</p> <p>2. Sales <§=316—Fbaud—Concealment of Financial Condition.</p> <p>Where, at the time a milling company purchased property on credit, it was hopelessly insolvent, and was able to continue business only by reason of extraordinary and unbusinesslike favors extended to it by a bank, and no witness testified that the purchase was in good faith, the facts showed that its manager, who must have known of its insolvency, and whose only expectation that it would be able to pay the bill was that referable to a hope and faith that this unreasonable relation with the bank would be allowed to continue, could not, constructively at least, have entertained an honest expectation that it would be able to meet the obligation at maturity; and hence the seller could reclaim the property from the company’s trustee in bankruptcy, especially as otherwise the bank, whose unusual method of doing business gave the milling company a fictitious appearance of prosperity, would receive a dividend from the assets of the milling company, enhanced by such property.</p> <p>[Ed. Note.—For other cases, see Sales, Cent. Dig. §§ 890-895; Dec. Dig. <@=316.]</p> <p><§3?>For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes</p>