Willison v. First National Bank

Citations

• 80 Md. 196
• 30 A. 749
• 1894 Md. LEXIS 130

Syllabus

<p>Insolvency— Unlawful Preferences — Attachment—Assignments.</p> <p>Under Code, Art. 47, a transfer of property or payment of money to a creditor by merchants or traders then insolvent or in contemplation of insolvency, with intent to give such creditor a preference, is an act of insolvency rendering them liable to be adjudicated insolvents.</p> <p>No title in the property so transferred passes to the creditor, but the same will be vested in the trustee in insolvency ; and the trustee is also entitled to recover from such creditor the money so paid him by the insolvents as an illegal preference.</p> <p>Where such payment or transfer of property has been made by insolvent merchants, with intent to create a preference, and a general creditor issues attachments on original process, causing the same to be laid in the hands of the parties receiving the preferences, then, if the said merchants are subsequently adjudicated insolvents, within the time prescribed by law, the trustee in insolvency will take such property or money, subject to the inchoate lien of the attaching creditor.</p> <p>Where such payment has been made by an insolvent trader, the fact that the creditor receiving the same did not know of the insolvency or of the intended preference, does not avail to prevent the transfer from being set aside under Code, Art. 47, sec. 22.</p> <p>Where a firm, being insolvent, sells its stock of goods, and thereupon returns to the purchaser a part of the purchase money to be applied by him to the payment of certain promissory notes of the firm, on which he was an endorser, an unlawful preference is created to that extent.</p> <p>Where a merchant or trader is guilty of acts of insolvency, and creates preferences forbidden by statute, an assignment for the benefit of creditors, subsequently executed by him, has no effect against the trustee in insolvency.</p>