Leighton v. Morrill
| Decision Date | 08 June 1893 |
| Citation | 34 N.E. 256,159 Mass. 271 |
| Parties | LEIGHTON et al. v. MORRILL et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
J.H. Sisk and Ira B. Keith, for appellants.
John Lowell and A.F. Means, for appellees.
This is a bill brought by the assignees in insolvency of one Humphrey to set aside a mortgage for $6,000 to the defendants as a fraud on the insolvent law. The master found that the mortgage was made with a view to give the defendants a preference, mainly in respect of $1,500 parcel of the $6,000 secured, and also with a view to prevent the property from coming to the assignees, and that it was void. The single justice found for the defendants. The case comes before us on the evidence, and is wholly a question of fact. For that reason we shall not discuss it at length, but shall state the conclusion to which we have been led by reading the evidence.
There is no doubt that the defendants actually paid over the $6,000, or that the mortgage was executed without haste or secrecy, and with the knowledge and approval of at least the two principal creditors, parties not friendly to, or co-operating with, the defendants. The master declines to find that the fact that the insolvent's property was insufficient to pay his debts was known to the defendants and the evidence is that they were informed by the insolvent that the amount advanced would enable him to pay his debts and go on. For more than a month afterwards the debtor did go on with his business, and then, upon the defendant's discovery that the conditions of the mortgage had been broken, and that probably a fraud had been practiced upon them, he absconded. There is no evidence, beyond the fact of his absconding and the state of his assets, that he kept any property from his assignees. The indications are that he carried nothing away with him, and that he spent all that he got in paying debts, and in the regular course of his business, although we do not assume this to be beyond controversy. In view of the whole evidence, and especially of the undisputed facts, and of the master's declining to find that the insufficiency of the insolvent's property to pay his debts was known to the defendants, it seems to us that his finding that the mortgage was made in fraud of the insolvent law must have been based upon a proposition of law which is not disclosed in his report, but which is to be gathered from the report of the evidence and of his rulings upon it. That proposition we understand to have been in effect, although not precisely so stated in words, that, if the mortgage was given on Humphrey's whole stock in trade at his only place of business, this fact not merely warrants a finding, but, as matter of law, raises a prima facie presumption that the mortgage was not given in the usual course of business, and that the defendants had reasonable cause to believe that a fraud on the insolvent law was intended. We mention this because, if the master's principal finding is explained by his supposing himself bound by a somewhat stricter rule of law than we should lay down, we should feel a greater freedom than we should otherwise feel in adopting a conclusion which seems to us more consistent with the subsidiary findings and the evidence than the one to which he felt himself forced to come.
The proposition which we have stated narrows too much the function of the master as a judge of fact. Presumptions of fact generally are questions of fact. They are merely the major premises of those inferences which juries are at liberty to draw, in the light of their experience as men of the world, from the facts directly proved. Com. v Briant, 142 Mass. 463, 464, 8 N.E. 338; Doyle v. Railroad Co., 145 Mass. 386-388, 14 N.E. 461. The question whether a mortgage was not made in usual and ordinary course of business of the debtor, within the meaning of Pub.St. c. 157, § 98, is a question of fact. Alden v. Marsh, 97 Mass. 160, 163; Buffum v. Jones, 144 Mass. 29, 10 N.E. 471; Peabody v. Knapp, 153 Mass. 242, 26 N.E. 696; Killam v. Peirce, 153 Mass. 502, 27 N.E. 520. Whether, if it was not so made, the inference shall be drawn that the mortgagee had reasonable cause to believe that a fraud on the insolvent law was intended is another question of fact. Bridges v. Miles, 152 Mass. 249, 253, 25 N.E. 461.
In view of what we have said, we regard the validity of the mortgage as set at large for our consideration. In our opinion the evidence is insufficient to do more than to suggest a suspicion that the insolvent kept, or intended to keep, his assets from the hands of an assignee. We do not believe that he had such...
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