Romero v. Segura

Mathews, J.,

delivered the opinion of the court.

In this case suit was brought by the plaintiffs as assignees of a debt transferred to them by one Louis Segura, on St. Yago Segura, the defendant. The evidence of the debt consisted in certain promissory notes held by the transferor, made payable to him in negotiable form by his debtor. Soon after the transfer, indeed so soon as to raise suspicions of the fairness of his conduct, Louis Segura made a cession of his property, in pursuance of our laws relating to insolvents, anc[ a syndic was appointed to manage the ceded property, % J r r j j who intervened m the present suit, claiming a rescission of the contract by which the plaintiffs became proprietors of the noteg jn question for the benefit of the mass of creditors of the u .... insolvent, and particularly m favor of a judgment creditor, who had seized, under execution, these notes.

The original plaintiffs having prevailed in the court below, the intervenor appealed from a judgment which was rendered . , . • _ in txl61T iclVOr.

The facts of the case show that the creditor had sold to the plaintiffs, the notes on which they commenced the present 1 ' * 1 action, at a discount of twenty per cent. The contract of transfer was a sale of them, not a regular transfer by endorsement, leaving the endorser responsible as such. The pur- ’ ° 1 J chasers seem to have taken the risk of the solvency of the *311maker, without recourse on the transferor. The contract was in its nature aleatory, consequently not usurious. There was a mistake in the seizure under execution attempted to be made by the judgment creditor. The sheriff’s return shows that he seized notes of an amount different from those transferred to the plaintiffs; the privilege which the creditor might have acquired in consequence of having made the seizure before notice of the transfer, did therefore not attach. The sale having been made for one-fifth less than the amount promised on the face of the notes would probably authorise the creditors of the insolvent to cause it to be annulled, in pursuance of the 1976th article of the Code. But on claiming a rescission, they would be bound to refund to the purchasers the sums paid by them to the insolvent, as there is no evidence of fraud or bad faith on their part. The syndic has not asked a j udgment of this kind in the present instance, and it is not shown that the creditors would be willing to take on themselves the responsibility of refunding.

Where the sale of a promissory note by the payee in insolvent circumstances, has been made for one-jiflh less than the amount promised on the face of it, such sale may be rescinded by .the creditors of the insolvent; butthey would be bound first to refund the purchase money, when there is no evidence of fraud on the part of the purchaseiv

It is, therefore, ordered, adjudged and decreed, that the judgment of the District Court be affirmed, with costs. -