Lewin & Co. v. Thurber & Co.

Bleckley, Justice. 1. Only two of the grounds of the motion for a new trial were insisted upon in the argument — the third and the fourth. On the effect of composition upon a debt contracted by fraud, courts, as the citations by counsel in this case will show, have entertained conflicting views, and made conflicting decisions. We find our own minds agreeing with those rulings which treat composition and ordinary 29 discharge as equally sparing this class of debts. As composition, no less than ordinary discharge, could take place, under the late bankruptcy system, without the assent and contrary to the will of the defrauded creditor, the reason for leaving the debt unextinguished was as forcible in the one case as in the other. In this particular instance,' the other creditors were able to out-vote Thurber & Co., the defendants in error, and thus the composition was. effected in spite of their opposition. ¥e think, that though Thurber & Co. accepted their fro rata under the composition, the balance of their debt, if it was in fact contracted by the fraud of the debtor, remained open, and the composition would be no bar to a recovery. 2. But the court was in error in charging the jury that if they believed that suspicion was cast by the evidence on the truth of Lewin’s representations as to his solvency, the jury would have a right- to infer they were untrue, unless he relieved them from that suspicion by explanatory evidence. The burden of proving fraud was upon the creditors, and they could not discharge that burden by merely raising a suspicion. They had to generate belief, and suspicion falls short of belief — it is but a tendency or inclination to believe. Judgment reversed.