Kinney v. Hayman
Kinney v. Hayman
Opinion of the Court
Opinion by
This action has been heretofore in this court on the appeal of the creditors of the Caldwell brothers from a judgment determining that certain conveyances made to Kinney and others were made in contemplation of insolvencj'-, with a design to prefer creditors. The judgment directed a sale of the property for the benefit of creditors and provided that orders for distribution would be made on the coming in of the commissioner’s report. On the appeal to this court
This court also, by an argument on the facts as presented, attempted to show that the sales of the Newport lots to Kinney were within the statute. The act of insolvency by reason of the mortgage to Mary Caldwell on the 9th of May, 1866, operated to transfer the estate of the debtors to their creditors; but the effect of sales of property by the debtors, made to innocent purchasers without any notice of the act of insolvency and not in satisfaction of debts before any suit brought or claim made by any creditor, was left undisposed of by the judgment of this court. Counsel for Kinney, foreseeing the effect that the opinion of the court might have on the court below, or that portion of it in which the claim of Kinney was discussed, asked for a modification of the opinion that the question as to the claim of Kinney by reason of his being an innocent purchaser might be raised in the court below when the funds came to be distributed. The court modified the opinion by adding that “the question touching the distribution of the assets now in the hands of the circuit court, not having been passed on by that tribunal, can not be considered by this court.” This, therefore, left the question open and was a modification of the opinion at the instance of counsel for Kinney, and the question of distribution by reason of the act of insolvency committed on the 9th of May, 1866, was not before the court for decision; and if it was, the modification made enabled the creditor, Kinney, to be heard on the return of the cause of his claim for priority, when the distribution was required to be made. The lots were sold and purchased again by Kinney, the latter executing his notes for the purchase-money, and being required by rule to bring the money into court when his notes matured responded that
The court held that the question was res ad judicata and determined the response insufficient. Although this court gave an opinion by way of argument in regard to this claim of Kinney’s, the question of priority was not before the court; and according to the views expressed in the opinion the entire estate passed at any rate to creditors by reason of the mortgage of the 9th of May, 1866. But whether so or not, the question was saved for Kinney by the modification of the opinion already referred to. We are considering the sufficiency of the response alone, and whether the proof when fully heard will sustain it is a question for the court below. If the facts stated in the response are true it presents strong' grounds for giving to Kinney the relief sought, that is, priority over other creditors in .the distribution of the purchase-money from the sale of the lots originally purchased by him. In Southworth v. Casey, 78 Ky. 395, this court held where the debtor, after the act of insolvency, had sold fifty acres of land to a purchaser innocent of the act of insolvency, for cash and not in payment of a debt, the purchaser would hold the property itself, the conveyance having been made before suit brought at the instance of creditors. In the case of Fuqua v Ferrell, 80 Ky. 69, 3 Ky. L. 571, this court held the same doctrine; so it follows that if Kinney was an innocent purchaser his response was good, and the court erred in not permitting him to sustain it by proof if he could do so. The court might have required him to pay the money into court that it might be distributed, but upon the question raised by the response the court has adjudged that the question has already been determined, and he is therefore precluded by the judgment appealed from to assert any priority. He should be allowed to do so, and if the facts exist as alleged the proceeds of the lots should be paid to him in preference to other creditors to the extent of his claim.
The objection made to the judgment for uncertainty comes too
Case-law data current through December 31, 2025. Source: CourtListener bulk data.