Bauman v. Cunningham

• Decision Date: 01 February 1892
• Citation: 51 N.W. 611,48 Minn. 292
• Parties: BAUMAN v CUNNINGHAM.
• Court: Minnesota Supreme Court

48 Minn. 292

51 N.W. 611

BAUMANvCUNNINGHAM.

Supreme Court of Minnesota.

Feb. 1, 1892.

(Syllabus by the Court.)

1. In order to avoid a conveyance whereby, it is alleged, one creditor has obtained the fraudulent preference mentioned in section 4, c. 148, Gen. Laws 1881, it is necessary that not only shall insolvency of the debtor exist, and that the creditor shall have reasonable cause to believe it to so exist, but, in addition, that the conveyance shall have been made with the view of giving a preference.

2. Held, in this action, that the finding of the court that the insolvent debtor did not make the mortgage in question with a view of giving a preference to his creditor, the defendant, but with a view of being enabled to continue his business, was fully supported by the evidence.

Appeal from district court, St. Louis county; STEARNS, Judge.

Action by Edward C. Bauman, as assignee of Wohlin, against William Cunningham, to set aside a mortgage alleged to have been given as a preference. Judgment for defendant. Plaintiff appeals. Affirmed.

Wm. C. McAdam, for appellant.

Wm. W. Billson, for respondent.

COLLINS, J.

The only finding of fact assailed by the assignments of error herein is that whereby the court below found that the insolvent, Wohlin, did not make the notes and mortgage in question with a view to giving a preference to defendant, Cunningham, but with a view to being enabled to continue his business, which was that of a merchant tailor, at retail. It therefore stands admitted that on the day of the execution and delivery of the notes and mortgage -March 16, 1891-by Wohlin to defendant, Cunningham, and to whom he was indebted in the sum of $470.74 for goods sold, Wohlin was simply technically insolvent, because unable to pay his debts as they matured in the ordinary course of business. It also stands admitted that Cunningham had good reason to believe that Wohlin was insolvent in this technical sense, but that he also had reason to believe, and did believe, that the insolvent had assets which in value exceeded the amount of his liabilities; that with this knowledge, for the purpose of enabling Wohlin to continue in business, as well as to save what was owing to him and to retain him as a customer, defendant proposed to Wohlin that, if he would give to him the notes and mortgage, he would become responsible to another creditor-Friedlander & Co.-for the payment of the amount of their bill,-$432,-which was past due, and being pressed for payment, and would make further advances in goods and money as needed; that Wohlin accepted the proposition, and executed and delivered the notes in the sum of $1,000, and the mortgage securing the same; that defendant became responsible by indorsement for the claim of Friedlander & Co., as agreed, advanced $25 in cash to the insolvent, and afterwards paid $150 of the Friedlander indebtedness. Following these findings was the one complained of by the assignment of error as not supported by the evidence. The claim is, as stated in appellant's brief, that when the two integral facts appear, namely, insolvency, and reasonable cause on the part of the creditor to believe the debtor insolvent, the intent to prefer is a necessary deduction in case of a conveyance. To put this claim in another form, it is that, where the debtor is insolvent, and the creditor has reasonable cause to believe...