J. Ochoa & Hermano v. Perez Blanco, 2014.

• Decision Date: 23 November 1926
• Docket Number: No. 2014.,2014.
• Citation: 15 F.2d 618
• Parties: J. OCHOA & HERMANO v. PEREZ BLANCO.
• Court: U.S. Court of Appeals — First Circuit

15 F.2d 618 (1926)

J. OCHOA & HERMANO v. PEREZ BLANCO.

No. 2014.

Circuit Court of Appeals, First Circuit.

November 23, 1926.

Ramon Siaca, of New York City (F. Soto Gras, of San Juan, Porto Rico, and Delafield, Thorne & Burleigh, of New York City, on the brief), for appellant.

Luis Toro Cabanas, of San Juan, Porto Rico, for appellee.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

BINGHAM, Circuit Judge.

This is a bill in equity, brought by the trustee in bankruptcy of Juan Gilibertys (who, on November 21, 1923, filed a petition in bankruptcy and was that day adjudicated a bankrupt), to set aside a mortgage, given by the bankrupt on the 17th day of September, 1923, to the firm of Ochoa & Hermano, to secure a credit with that concern for $3,000, on the ground that, at the time of the giving of the mortgage, Gilibertys was insolvent; that Ochoa & Hermano then knew, or had reason to believe, that he was insolvent, and that the giving of the mortgage would work a preference.

In the District Court of Porto Rico, after hearing, it was found that the mortgage was in fact given to secure an old indebtedness of $1,945.15, for goods previously sold and delivered to him; that the balance of the credit or sum secured by the mortgage was to cover goods thereafter to be sold to him by the firm; that the firm afterwards sold him goods to the amount of $912.66; that the mortgage was given within four months prior to the filing of the petition in bankruptcy; that Gilibertys on September 17, 1923, was insolvent, and that Ochoa & Hermano then knew, or had reasonable cause to believe, that he was insolvent, and that the mortgage, to the extent it was given to secure the old debt, would effect a preference. From a decree embodying the foregoing findings this appeal was taken.

The only error complained of is the finding of the court that Ochoa & Hermano, at the time the mortgage was given, knew, or had reasonable cause to believe, that Gilibertys was insolvent.

It appeared in evidence that Gilibertys owed $24,610.63, of which $2,857.81 was secured by the mortgage in question, the balance being unsecured; that he owned real estate listed in his schedules at $3,500, which the trustee sold for $4,000 (out of which the value of the homestead is to be deducted); and that he had stock in trade listed at $4,000, and machinery and fixtures at $500, out of which the trustee realized $2,500, and book accounts of $17,598.42, from which the trustee collected about $30. Many of the book accounts were old; 20 or more of the debtors were dead, and the balance of the accounts were...