Abbott v. Shepard , 142 Mass. 17 ( 1886 )

Gardner, J.

1. The three several propositions stated by the judge in his charge to the jury were in accordance with the law relating to preferences under the insolvent act. Pub. Sts. e. 157, § 96. The presiding judge then added, that, if the jury found the first, second, and third propositions affirmatively established, “that would authorize the finding that the transfer was in fraud of the insolvent law; ” in other words, would authorize the finding that the defendants had reasonable cause to believe that the transfer of the notes was made in fraud of the law relating to insolvency. The defendants object to this'addition.

The bankrupt act of the United States had a similar provision in relation to preferences. U. S. St. March 2, 1867, § 35. Under this statute, it has been held that the words, that the creditor must have reasonable cause to believe that the transfer was made in fraud of the provisions of the bankrupt act, refer to reasonable cause to believe that the debtor intended a fraudulent preference. Forbes v. Howe, 102 Mass. 427. Toof v. Martin, 13 Wall. 40, 51.

If the defendants knew, or had reasonable ground to believe, that Abbott was insolvent, and if, with that knowledge, they took a large portion of his property to secure themselves, and if, at the same time, they knew that the law required that his property should be equally divided among his creditors, these facts would go far towards supporting the inference, that the defendants had reasonable cause to believe that Abbott intended that the transfer of these notes to them should be a fraudulent preference. Forbes v. Howe, ubi supra. This would follow as a necessary result from the facts stated. Upon the evidence in this case, if the three propositions stated to the jury were properly established, the jury had the right to infer therefrom that the defendants had reasonable cause to believe that Abbott intended the transfer of the notes as a preference. Under the circumstances of this case, and upon the evidence reported, we think that the instructions given to the jury were correct. Toof v. Martin, ubi supra. It is possible to imagine cases where the facts might require further instructions, and where the jury would not be justified in drawing such inferences as in the case at bar.

2. The defendants offered evidence tending to show that a difficulty between Dickinson and Abbott led to their failure in 1881. The plaintiff had shown the failure of Abbott in 1881; and the defendants contended that the evidence excluded tended to show that the failure was not due to bad management of his business. We think that this testimony comes within the range of cases so near the line of remoteness and immateriality, that it is wiser to leave it to the discretionary control of the presiding judge, than to attempt to pass upon it as a question of law. It was, however, so remote that the judge was fully justified in excluding it.

Exceptions overruled.