{
  "id": 8658699,
  "name": "NEY McNEELEY, Trustee, v. W. H. MILES SHOE COMPANY",
  "name_abbreviation": "McNeeley v. W. H. Miles Shoe Co.",
  "decision_date": "1915-12-01",
  "docket_number": "",
  "first_page": "278",
  "last_page": "281",
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    "name_abbreviation": "N.C.",
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    "name": "Supreme Court of North Carolina"
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    "name_long": "North Carolina",
    "name": "N.C."
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    {
      "cite": "84 N. C., 41",
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  "last_updated": "2023-07-14T16:19:17.272665+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
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  "casebody": {
    "judges": [],
    "parties": [
      "NEY McNEELEY, Trustee, v. W. H. MILES SHOE COMPANY."
    ],
    "opinions": [
      {
        "text": "Drown, J.\nPlaintiff, as trustee in bankruptcy of the Smith-Eoberts Company, a partnership composed of Jacob Smith and J. W. Eoberts, sues to recover the value of certain shoes delivered to defendant by the bankrupts and constituting an unlawful preference within the terms of the bankrupt law.\nThe act of Congress, known as the Bankrupt Law, among other things, provides as follows: \u201cThat a person shall be deemed to have given a preference if, being insolvent, he has within four months before the filing of the petition, or after filing the petition, and before the adjudication, suffered or let a judgment be entered against him, or made a transfer of any of his property, and the effect of the enforcement of such transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other such creditors of the same class. If a bankrupt shall have given a preference and the person receiving it or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe it was intended thereby to give a preference, such shall be void by the trustee, and he may recover the sum of such preference.\u201d\nIt is admitted that the Smith-Eoberts Company, Jacob Smith and J. W. Eoberts, were duly adjudged bankrupts, and that the plaintiff was elected trustee of their estates. It is also admitted that the $100 was paid and the shoes turned over to the defendant within four months prior to the adjudication. It is also admitted that the value of the shoes is $582.\nThe first assignment of error is to the failure of the court to submit an issue as to the insolvency of the bankrupts at the time of the alleged preference. We do not think the failure to submit such issue constitutes reversible error, although it would have been better to have submitted a separate and distinct issue as to insolvency.\nThere are three essential elements necessary to constitute an unlawful preference: (1) the insolvency of the bankrupts at the time the preference is given; (2) that it shall be given within four months before the filing of the petition in bankruptcy; and (3) that the person receiving such preference shall have had reasonable cause to believe that a preference was intended.\nThe second essential is admitted, and we think the first and third essentials fully covered by the charge of the court, which was as follows:\n\u201cIt is admitted here that the payment of the $100 in cash and the transfer of the shoes both took place within four months before the filing of the petition in bankruptcy, so that if you find from the evidence that at the time of such transfers, that is, the payment of the $100 in cash and the transfer of the shoes, the Smith-Roberts Company and Jacob Smith and J. W. Roberts were insolvent, and you further find that the effect of such transfer was to enable the Miles Shoe Company to obtain a greater percentage of its debt than any other creditor, then you will direct your inquiry to the issue which is submitted to you, \u2018Did the defendant at the time it received the cash or shoes, or both, have reasonable cause to believe that it was intended thereby to give a preference?\u2019 \u201d\nAfter charging the jury that the burden of proof was on the plaintiff, the court said: \u201cIt is not necessary, in order to answer this issue in the affirmative, that you find there was an intent to defraud the creditors, but an intent to prefer and constitute a preference. Mere knowledge on the part of the creditor that the debtor could not pay all his debts unless he could collect his accounts would not be sufficient, but it would be necessary not only to appear that the firm, but each individual composing the firm, was insolvent, because each individual would be liable for the debts.\u201d\nAgain: \u201cIf the creditor knew facts which would put a reasonably prudent man on inquiry, and that such inquiry would have shown that the transfer was preferable in its effect; that the debtor was insolvent and the transfer was to give greater percentage to one creditor over another, it would be a preference.\u201d\nIn this case, defendant tendered no issue and did not except to the one submitted. It is the duty of counsel to prepare and submit such issues as he thinks arise from the pleadings, 'and if he fails to do so, then it becomes the duty of the court to prepare and submit the issues. Tho court having submitted the issue and the defendant having failed to except to same, then he consents to the issue submitted, and cannot, after the case is disposed of, be heard to complain that other issues were not submitted. Where counsel does not tender such issues as he may desire in the court below and show their pertinency, he cannot complain here that those issues were not framed by the court and submitted on tbe trial. Curtis v. Cash, 84 N. C., 41; Kidder v. McIlhenny, 81 N. C., 123.\nTbe issue submitted, takeu iu connection with tbe explicit instruction \u25a0of tbe court, as answered by 'tbe jury, determines tbe question of insolvency as clearly as if a separate issue bad been submitted. Every phase of tbe ease was presented for tbe determination of tbe jury under tbe one issue submitted, and if one issue fulfills tbe purpose of affording a fair opportunity to each party of developing bis case, it is sufficient. Wilson v. Taylor, 154 N. C., 211; Zollicoffer v. Zollicoffer, 168 N. C., 330.\nThe remaining assignments- of error are directed to tbe charge of tbe court and need not be discussed. Tbe charge as a whole is a very lucid and correct presentation of tbe case. Tbe entire evidence fully justifies tbe finding of tbe jury that there was an unlawful preference, and that defendants bad reason to know it.\nNo error.",
        "type": "majority",
        "author": "Drown, J."
      }
    ],
    "attorneys": [
      "W. B. Love for plaintiff.",
      "McNinch & Justice for defendant."
    ],
    "corrections": "",
    "head_matter": "NEY McNEELEY, Trustee, v. W. H. MILES SHOE COMPANY.\n(Filed 1 December, 1915.)\n1. Bankruptcy \u2014 Unlawful Preference \u2014 Insolvency\u2014Issues.\nTo constitute an unlawful preference given to a creditor under the bankrupt act, it requires tbat the bankrupt be insolvent at the time the preference was given; that it was given within four months before the filing of the petition in bankruptcy, and that the person receiving such preference shall have had reasonable cause to believe that a preference was intended; and while, in a trustee\u2019s action to establish that such preference had been given by the bankrupt to one of his creditors, it is better for the court to submit a separate issue as to the insolvency of the bankrupt at the time of the alleged transaction, it is held, in this case, that the jury\u2019s answer to the issue submitted is determinative of the controversy in all of its essential elements, under a clear and comprehensive charge of the court.\n2. Bankruptcy \u2014 Burden of Proof \u2014 Unlawful Preference \u2014 Insolvency\u2014Partnership.\nThe trustee in bankruptcy has the burden of proving that a transaction between the bankrupt and his creditor was an unlawful preference under the act, not that there was an intent to defraud, but an intent to prefer; and where the bankrupts are partners in business the bankruptcy of one at the time of the transaction is not sufficient, for, as each partner is liable for the firm\u2019s debts, the insolvency of all must be shown.\n3. Bankruptcy \u2014 Unlawful Preference \u2014 Insolvency\u2014Imputed Knowledge \u2014 Inquiry.\nIt is not necessary that a creditor dealing with the bankrupt should have known of his insolvency at the time of receiving a preference, for it is sufficient if he knew of such facts which would have put a reasonably prudent man upon inquiry which would have reve.aled to him that tbe transfer by the bankrupt was unlawfully preferable in its effect.\n4. Issues Tendered \u2014 Duty of Counsel \u2014 Issues Submitted \u2014 Sufficiency.\nCounsel should prepare such issues as he thinks arise from the pleadings and are proper to be submitted, and he may not object to those prepared and submitted by the court, when they are sufficient, under his charge, to a proper determination by the jury of all the matters relative to the inquiry.\nAppeal by defendant from Devin, J., at May Term, 1915, of UNION.\nCivil action tried upon tbis issue:\n1. Did the defendant, at the time it received the check or shoes, or both, have reasonable cause to believe that it was intended thereby to give a preference? Answer: As to the $100 cash payment, No. As to the $582, Yes.\nFrom the judgment rendered defendant appealed.\nW. B. Love for plaintiff.\nMcNinch & Justice for defendant."
  },
  "file_name": "0278-01",
  "first_page_order": 340,
  "last_page_order": 343
}