Burdick v. Gill

• Decision Date: 29 April 1881
• Citation: 7 F. 668
• Parties: BURDICK, Assignee, v. GILL and Wife.
• Court: United States Circuit Court, District of Iowa

7 F. 668

BURDICK, Assignee, v. GILL and Wife.

United States Circuit Court, D. Iowa.

April 29, 1881

Clark & Heywood and Gillmore & Anderson, for assignee.

Herschl & Preston, for Sarah Gill.

MCCRARY C.J.

The complainant, as assignee in bankruptcy of Potter Gill, brings this bill in equity to set aside a conveyance of certain real estate made by the bankrupt to his wife, the respondent Sarah Gill, and to subject the same to the payment of the debts of the estate. The petition in bankruptcy was filed in the district court on the eighteenth of April, 1878. On the second day of January, preceding, he made the conveyance in question to his wife. It is conceded that the conveyance was voluntary. It is also conceded that there are no creditors now complainant whose debts were contracted prior to the conveyance, and the sole question in this case is whether said conveyance was fraudulent and void as to subsequent creditors.

1. Was the conveyance from the bankrupt to his wife made with intent to defraud subsequent creditors? This is the first inquiry. The following are the badges of fraud relied upon to establish the affirmation of this proposition: Very soon after the conveyance, Gill commenced disposing of his property with intent to defraud his creditors. He sold off his stock of furniture, and, according to his declarations he sold it at less than cost. He destroyed or secreted his books of account. He bought largely, for time, but sold very rapidly, so that when the assignee took possession, on the twentieth of May, 1878, the goods on hand inventoried only $244, while the claims proved, and which must have been contracted within the preceding 90 days, amounted to $2,700. He is shown to have made several sales, the proceeds of which he fails to account for. About the sixteenth of April he sold a farm and received $675 cash on the purchase money. The proof is sufficient to show the fraudulent intent of Gill and it is fair to infer, from all the facts and circumstances, that the conveyance to his wife was a part of his general plan and scheme of fraud. The time that elapsed between the date of the conveyance and the first of the admittedly-fraudulent acts, is so short as to afford a clear presumption that they all belong to and form part of an conspiracy. It will not be presumed that the gift to his wife was honest and bona fide, when we find that it was followed within a month by the inauguration of a scheme to dispose of what remained for the purpose of defrauding creditors. The intent may be collected from the circumstances, and need not be shown by direct and positive...