Matthews v. Chaboya

Citations

• 111 Cal. 435
• 44 P. 169
• 1896 Cal. LEXIS 603

Syllabus

<p>Insolvency—Transfer of Business by Insolvent—Action by Assignee — Prima Facie Showing—Rebuttal—Conflicting Evidence.—The transfer of a mercantile business by an insolvent debtor to one of his creditors, in satisfaction of the debt, within one month previous to the filing of a petition in involuntary insolvency against the debtor by his other creditors, is prima fade evidence of fraud, and that the transferee had reasonable cause to believe the debtor insolvent; but this prima fade evidence may be rebutted by any competent evidence; and where the jury find that no fraud was practiced upon the provisions of the Insolvent Act upon conflicting evidence, its verdict will not be disturbed upon the ground that a prima fade ease was made for recovery by the assignee.</p> <p>Id.—Instructions—Intention of Transferee to Defraud—Honesty and Fairness.—Instructions that in order to entitle the assignee to recover it must appear that the defendant bought the stock of goods with intent to defraud the other creditors, and that if the conduct of the defendant can be reconciled with fairness and honesty, the jury must find a verdict for the defendant, are prejudicially erroneous, there being no element of actual fraud necessarily involved in the case, and it being a legal fraud, in violating the provisions of section 55 of the Insolvent Act, that renders the transfer void, regardless of any question of honesty, fairness,'good faith, or fraud in fact.</p> <p>Id.—Reason to Know Insolvency—Transfer Out of Usual Course of Business.—An instruction that if the defendant at the time of the purchase of the stock of goods did not know of the insolvency of the debtor, or had reason to know the same, hut was ignorant that he owed more than he could pay, the jury must find for the defendant, is erroneous in omitting to include the question of 'whether the transfer was made out of the usual course of business.</p>