Rick's Assignees v. Hulett

• Decision Date: 26 May 1891
• Citation: 22 A. 75,63 Vt. 321
• Parties: RICK'S ASSIGNEES v. HULETT.
• Court: Vermont Supreme Court

22 A. 75

63 Vt. 321

RICK'S ASSIGNEES

v. HULETT.

Supreme Court of Vermont. Rutland.

May 26, 1891.

Exceptions to pro forma judgment from Rutland county court; Taft, Judge.

Action on the case by the plaintiffs, as assignees in insolvency of Warren Rice; for the value of a stock of goods. Rice was adjudged an insolvent, November 19, 1888. The plaintiffs claimed that the defendant took a transfer of these goods October 27, 1888, in satisfaction of a pre-existing debt, having reasonable cause to believe that Rice was insolvent. The defendant claimed that he bought and took possession of the goods July 2, 1888, and ever after remained in possession of them, although Rice was about the store, and assisting in its management. In reference to these claims the referees found that defendant advanced to Rice, about July 2, 1888, the sum of $2,000; that, by agreement between them, Rice remained in the store, conducting the business therein, until October 25, 1888, on which date defendant took exclusive possession and control of the goods; that Warren Rice was in fact insolvent during the whole year 1888; also that the defendant did not acquire the absolute right and title to said stock of goods until the 25th of October, 1888, when Rice surrendered to him all possession and control of the same; that the transaction of July 2, 1888, was a loan by defendant to Rice upon the security of the stock; that when the transaction of the transfer of said stock to the defendant was consummated, on the 25th day of October, 1888, the said Rice knew himself to be insolvent, and intended thereby to grant a preference to said defendant; and that the defendant at that time had reasonable cause to believe that said Rice was insolvent, and that said transfer was in fraud of the laws relating to insolvency. Judgment was rendered for plaintiffs. Defendant excepts. R. L. Vt. § 1860, provides: "If a person being insolvent, or in contemplation of insolvency, within four months before the filing of the petition by or against him, with a view to give preference to a creditor or person having a claim against him, or who is under a liability for him, procures any part of his property to be attached, sequestered, or seized on execution, or makes a payment, pledge, assignment, transfer, or conveyance of any part of his property, either directly or indirectly, absolutely or conditionally, the person receiving such payment, pledge, assignment, transfer, or conveyance, or to be benefited thereby, having reasonable cause to believe such person insolvent, or in contemplation of insolvency, and that such payment, pledge, assignment, or conveyance is made in fraud of the laws relating to insolvency, the same shall be void, and the assignee may recover the property, or the value thereof, from the persons so receiving or so to be benefited thereby."

F. Potter and J. C. Baker, for plaintiffs.

Geo. E. Lawrence and F. S. Piatt, for defendant.

TYLER, J. The law has long been settled in this state that, to render a sale of personal chattels valid as against creditors, there must be a visible, substantial change of possession; but, as between the parties to the transaction, the...