Williams v. Davidson

Citations

• 104 Wash. 315
• 176 P. 334
• 1918 Wash. LEXIS 1180

Syllabus

<p>Bankruptcy (5-8) — Preference—Reasonable Cause for Belief. A creditor taking over a bankrupt’s stock in good faith, after diligent inquiry as to the total indebtedness of the insolvent, and agreeing to pay all debts in full, is not liable to the trustee for receiving a preference, under subd. b of § 60 of the bankruptcy act, which requires that such person have reasonable cause to believe that he was receiving a preference.</p> <p>Corporations (207, 208) — -Insolvency-—-Preference—Trust Fund Doctrine. Under the trust fund doctrine, a creditor of an insolvent corporation who in good faith purchases all the assets, assuming all debts under misrepresentations, is liable to the trustee in bankruptcy although not liable under the bankruptcy act; and is not protected by compliance with the sales in bulk statutes, Rem. Code, § 5296.</p> <p>Same — Extent of Liability. In such case, the liability on securing the preference is limited to the pro rata share which excluded creditors would have been entitled to upon a ratable distribution of the assets.</p> <p>Chadwick, C. J., and Fullerton, J., dissent.</p>