Landry v. Andrews

• Decision Date: 20 April 1901
• Citation: 48 A. 1036,22 R.I. 597
• Parties: LANDRY v. ANDREWS.
• Court: Rhode Island Supreme Court

48 A. 1036

22 R.I. 597

LANDRY

v. ANDREWS.

Supreme Court of Rhode Island.

April 20, 1901.

Action by William Landry against George W. Andrews. Defendant demurred to the declaration. Overruled.

John J. Heffernan, for plaintiff.

William G. Rich, for defendant.

STINESS, C J. The first count of the declaration sets out that the plaintiff is the trustee in bankruptcy of the firm of Carter & Baker; that the defendant was a creditor of Baker in February, 1900, and that said Baker, with the knowledge of the defendant, withdrew and took from the funds of said firm the sum of $500 which was received by the defendant; that subsequently said Carter & Baker, being insolvent, were adjudged bankrupt, and the plaintiff appointed trustee; that the defendant had reasonable cause to believe that it was intended by such payment to give him a preference over other creditors, whereby an action has accrued to the plaintiff under an act of congress, etc. The second count alleges that the defendant, with Byron M. Young, had indorsed a note of said Carter & Baker, on which there was due the sum of $2,800, which note was in the possession of the Providence National Bank of Woonsocket, and that said Carter & Baker transferred, assigned, and paid to said bank the amount due on said note, thereby discharging and paying said note, and relieving the defendant from any liability to pay the same; and that the defendant, knowing said Carter & Baker to be insolvent, directed them to pay said note in order that he would be benefited thereby, having reasonable cause to believe that it was intended thereby to give him a preference over other creditors.

The defendant demurs to the declaration, and the fundamental argument in support of the demurrer is that a payment of money is not a transfer of property within the provisions of the bankrupt law. It is true that the bankrupt law does not specify money as a class of property. In section 60d it even uses apparently distinguishing terms in the words, "pay money or transfer property." Still we cannot resist the conclusion that the word "property," as used in the law, was Intended to include money. Property, in its various kinds, has value according to what it will bring in money. Money is the ultimate standard of the value of property. By the terms of the law all property is to be reduced to money. It would be a strange omission if property, such as real estate, shares of corporate stock, merchandise, and the like, which must be reduced to money by the trustee, is only embraced within the law, while money on hand, in the possession of the bankrupt, is not within it, and so may be used contrary to the evident scope and purpose of the law. Section 70 relates to "Title to Property." Money is not mentioned, but would any one say that cash in bank, or safe, or drawer, or even in the bankrupt's possession, would not pass to the trustee? Again, clause "f" provides that upon confirmation of a composition offered by a bankrupt-the title to his property shall thereupon revert in him. Suppose that prior to such confirmation the trustee had collected debts in the discharge of his trusts, could he retain the money because it is not property which is revested in the bankrupt? The word "property" is evidently used as a generic term, intended to include money as the readiest and most valuable form of property, since it is the product of all kinds of property reduced to its standard of value. If this is not so, then a bankrupt who could not transfer property to a creditor by way of preference could himself sell the property, and transfer the proceeds in money with impunity. We do not see that the law can be so narrowly construed. Our opinion of the statute is confirmed by the decision of the circuit court of appeals, Seventh circuit, in Re Ft. Wayne Electric Corp., 99 Fed. 400, 39 C. C. A. 582; also by In re Fixen & Co., 4 Am. Bankr. R. 10, 96 Fed. 748. The defendant refers to several cases in support of his position. In re Ft. Wayne Electric Corp., 99 Fed. 400, 39 C. C. A. 582, does not support him, because in that case it did not appear, as it does in this declaration, that the creditor...