Amsden v. Fitch & Enright

TAFT, J. The court excluded testimony offered by the plaintiff. If it was material and pertinent, tending to support the plaintiff’s cause of action; such exclusion was error, notwithstanding the court ordered a verdict for the defendants. I. The amount of the property of Whitcomb, the insolv [524] ent, was a material fact. That he was insolvent was conceded. Whether the amount of the accounts due him in his business was large or small-might be an important factor in determining whether one taking a conveyance of any of his property had reasonable cause to believe him insolvent, and in determining the intent with which he took the conveyance. It was error to exclude the-testimony to show that the amount of the accounts due the insolvent was two hundred and five dollars. II. At the time Enright and Fitch took the conveyance of the property of the insolvent, Enright knew of the latter’s indebtedness upon the Rix note; the testimony tending to show that an arrangement was immediately thereafter made, by which the Rix note was to be paid out of the proceeeds of the sale to the defendant, was excluded. We are of opinion that the testimony tending to show the disposition of the proceeds of the sale, in this respect, was material, and it was error to exclude it. What became of the property, or proceeds of it, after it went into the defendants’ hands might throw some light upon the intent with which they took the conveyance, and whether the conveyance was taken in fraud of the insolvent laws. III. As bearing upon the intent with which the defendant, Fitch, took the conveyance we think it was legitimate for him to state he had no reason to doubt but that Whitcomb would pay his debts in full. It was not the question that the jury were trying. The question before them was whether he had reasonable cause to believe Whitcomb was insolvent. He may, in fact, have believed Whitcomb could pay his debts, but at the same time been chargeable with reasonable cause to believe him insolvent. A person may have property enough to pay his debts in full and still be an insolvent, i. e., unable to meet his obligations in the usual way, when they mature. There was no error in permitting him to answer [525] this question. These are the only questions of evidence made by the brief for the plaintiff. IV. Holding that the testimony offered by the plaintiff was improperly excluded requires a reversal of the judgment, but in ordering a verdict we think the court erred. R. L. s. 1861 provides that the sale of property by a person being insolvent or in contemplation of insolvency not made in the usual and ordinary course of business shall be prima facie evidence of fraud. The sale by a retail dealer of his entire stock in trade is not made in the ordinary course 01 business. Read v. Moody, 60 Vt. 668. As the sale to the defendants was of the insolvent’s entire stock in trade, the case could not have properly been taken from the jury, since a prima facie case was made out. What rights of the defendants, under their chattel mortgage, if any, they could avail themselves of, in this action, or what damages the plaintiff is entitled to, if he recovers, are questions not mooted upon the trial below. We therefore do not consider them. Judgment reversed and cause remanded.