BANKRUPTCY--ACT OF BANKRUPTCY BY TRANSFER WITH INTENT TO DEFRAUD A CREDITOR WITH A NON-PROVABLE CLAIM

Authors

Abstract

Petitioner as surety executed a bond to secure the payment of any judgment that might be entered against the principal. The defendant agreed to indemnify the petitioner against any claim or liability arising on the bond. After a verdict was obtained against the principal, but before judgment was entered, the defendant transferred all her estate without consideration and with specific intent on her part to hinder, delay, and defraud petitioner, her only creditor. The petitioner was forced to pay the judgment. Within four months after the fraudulent transfer he filed a bill seeking to have defendant ad judged a bankrupt. The Circuit Court of Appeals held that since the petitioner's claim was not a provable claim at the time of the transfer, being contingent, the defendant had committed no act of bankruptcy. On appeal to the United States Supreme Court it was held that the creditor need not have a provable claim at the time of the transfer. The words "shall include" in sec. 1, subsec. 9, of the Federal Bankruptcy Act 2 are used as an extension or enlargement rather than words of limitation or enumeration. American Surety Co. v. Marotta, 53 Sup. Ct. 260, 77 L. ed. 340 (1933).

Recommended Citation

BANKRUPTCY--ACT OF BANKRUPTCY BY TRANSFER WITH INTENT TO DEFRAUD A CREDITOR WITH A NON-PROVABLE CLAIM, 31 Mich. L. Rev. 1151 (1933).
Available at: https://repository.law.umich.edu/mlr/vol31/iss8/12