In this case, the substantial controversy was whether a transfer
made by the bankrupt to his wife of certain valuable certificates
of stock was made before or after insolvency, and, notwithstanding
doubts engendered by conflicting statements and questionable
circumstances and the different conclusion reached by the trial
court, this Court agrees with the conclusion reached by the circuit
court of appeals that the gift was made during the period of
solvency.
In California, where the bankrupt resided, title to stock may be
transferred by delivery of certificates, and the corporate books
are not for public information.
219 F. 17 affirmed.
The facts, which involve the legality of a transfer of assets
made by the bankrupt more than four months prior to the filing of
the petition, are stated in the opinion.
Page 241 U. S. 200
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
J. Downey Harvey of San Francisco was adjudged a bankrupt
November 17, 1911. Appellant, having become trustee of the estate,
instituted this proceeding to set aside a transfer by the bankrupt
to his wife, defendant in error, of certain stock in Shore Line
Investment Company, because made without consideration and with
intent to delay and defraud his creditors. The complaint alleges
that the gift was made and stock transferred in November, 1909,
when it is admitted Harvey was insolvent. Mrs. Harvey maintains
that her husband gave the stock and actually delivered the properly
indorsed certificate to her in 1905, during all of which year his
solvency is conceded. The substantial controversy throughout has
been upon the question of fact thus raised.
Having heard witnesses, the trial court held the transfer was
made in 1909, and rendered a decree in favor of the trustee. The
circuit court of appeals, after a careful review of the evidence,
reached a contrary conclusion. 219 F. 17. We are now asked to
reverse its decree and sustain the trial court.
Notwithstanding doubts necessarily engendered by some
conflicting statements and questionable circumstances, upon
consideration of the whole record, we think the decision of the
circuit court of appeals is correct.
Appellant also suggests (a) that the gift is void because Mrs.
Harvey permitted her husband for more than four years to retain
apparent title to the stock and hold himself out as its real owner,
and (b) that there was no actual and continuous change of
possession, as required by the state statute against fraudulent
conveyances. In reply to these suggestions, it seems only necessary
to cite
National Bank v. Western Pacific Ry. Co., 157 Cal.
573, 581, which announces as settled doctrine in California
Page 241 U. S. 201
that title to stock may be transferred by delivery of
certificates, and corporate books are not for public
information.
The judgment of the circuit court of appeals is affirmed.
MR. JUSTICE McKENNA took no part in the consideration or
decision of this case.
