Sargent v. Blake

Citations

• 160 F. 57
• 17 L.R.A.N.S. 1040
• 1908 U.S. App. LEXIS 4175

Syllabus

<p>1. BANKRUPTCY — Fraudulent Transfer under Section 67e — Payment by Insolvent oe Individual Debts with Partnership Property is Not— Facts — Conclusions.</p> <p>K. and M. were partners. They and the partnership were insolvent. K. took .$234.34 with M.’s consent out of the partnership funds for himself, and in consideration thereof and of M.’s covenant to assume and pay the partnership debts conveyed to him the remainder of the partnership property and the partnership business. Immediately thereafter M. paid to Mrs. S., his mother, out of the funds which had been partnership property, $3,731.90, which lie owed her for money he had borrowed to put into the partnership business. Mrs. S. did not have reasonable cause to believe that any preference was intended by this payment, nor did she have any canse to believe that it was made with intent to hinder, delay, or defraud creditors of the firm, or of the firm partners. K. and M. had no intent to hinder, delay, or defraud creditors to any greater extent than the payment to Mrs. S. would necessarily hinder or prevent them from collecting their debts. Within four months K. and M. and the partnership were adjudged bankrupts. The trustee brought suit to recover the $3,-731.90 of Mrs. S.</p> <p>Held the trustee was not entitled to recover this money of Mrs. S.</p> <p>2. Same-Intent to Hinder, Delay or Prevent Collections Unlawfully Requisite to Fraudulent Transfer.</p> <p>Intentional Iransfers by insolvents to secure or pay pre-existing debts within four months prior to the filing oí a petition in bankruptcy which are not voidable as preferences under section 67e, or violative of other provisions of law, and which are made without intent to hinder, delay, or defraud creditors more than such securities or payments necessarily have that effect, do not evidence an intent to hinder, delay, or defraud creditors within the meaning of section 67e of the Bankruptcy Act of July 1, 1898, c. S41, 30 Stat: 564 (U. S. Comp. St. 1901, p. 3