Phoenix v. Dey

The Court of Errors, Spencer, J., delivering the only opinion, held, 1. That Dickson, the witness discharged, appeared to be a competent witness, but that Prime the other, his responsibility not having been discharged, was not. 2. That •even if they were both competent, there was not sufficient evidence to authorize the conclusion that Ingraham contemplated an act of bankruptcy, within the act of Congress, when he executed the conveyances, dec., and made the payments to the appellant, which the decree of the Chancellor liad declared void. Spencer, J., says: “The most that can be deduced from the evidence is, that Ingraham was insolvent ; but it expressly rejects the idea that the acts were done in contemplation of bankruptcy. Reference has been made io the answer of Ingraham, to impeach that part of his evidence, which denies that what he did to secure the appellant was in contemplation of an act of bankruptcy,- if it be admitted that his answer, and the declaration be made completely produce that effect, still the fact is to be made out affirmatively, that the preference was given to the appellant, in contemplation of bankruptcy. For, no proposition can be clearer, than that the answer of one defendant is not evidence against his co-defendant; and that the declarations of a party to a sale or transfer, going to take away and destroy the vested rights of another, can not, ex post facto, work that consequence nor be regarded as evidence against the vendee or assignee."

“There is no evidence of an act of bankruptcy contemplated, nor any circumstance from which to infer it, except the simple fact of his insolvency, and the court is without any evidence to show the nature and extent of this insolvency, and whether it was irretrievable and desperate or not.”

“ That insolvency is no objection to giving a preference, unless it be shown that a bankruptcy was contemplated at thé time, was decided in the Supreme Court in the ease of McMennomy and Townsend v. Ferris, (3 J. R. 82.) That principle will be found admitted and acted upon in a great variety of cases.”

3. As to “how far forth payments obtained by a creditor ■on his application, after the debtor contemplates an act of bankruptcy but before one is, in fact, committed, are to be upheld, I confess I have little difficulty.” And he cites Hartshorne and another v. Slodden, 2 B. and P. 586, to prove that where even the debt is not yet due, a preference thus obtained was valid, though the creditor knew the debtor was in failing circumstances, and that the motive of his com duct. Also, the case of Thompson v. Freeman, 1 T. R. 156.

Kent, Ch. J.,

was of the same opinion; Thompson and Tales absent.

Decree reversed unanimously.