Page images
PDF
EPUB

during last season, and prior to last, and knew themselves so to be, and had no idea by continuing in business they could pull through.

That his copartner had taken about dollars worth of goods lately from the copartnership stock, and sold the same, and kept the proceeds to himself, so that the same could not be found or discovered by the firm's creditors, and had also lately taken moneys from the firm's assets, with like intent, and that the firm had attempted to sell goods at low prices, so as to realize on the same, and hold the same to their individual use in such a way, that in case of their failure, which they shortly apprehended, they would have some means which their creditors could not reach.

[And another as follows:] That said Y. Z. stated this day to deponent that their firm was about to fail, and were insolvent at the time they purchased the goods from plaintiff; that they had been sued by his brother to protect himself; that his partner had pocketed over dollars, and the creditors would not get a cent, and that goods had been and were being removed by his partner, and he was afraid the creditors would get very little.

erty he could, not enough. Sill Stove Works v. Scott, 62 App. Div. 566, 71 N. Y. Supp. 181.

Transfer of a portion of his property without consideration, but without showing insolvency at the time of the transfer, or that the property transferred constituted so much of the defendant's property that insolvency resulted, insufficient. Parrott r. Mayer, 31 Misc. 50, 64 N. Y. Supp. 649.

Transfer of all firm assets to the wife of a partner for an inconsiderable debt, though not consummated, held enough. Seckendorf v. Ketcham, 67 How. Pr. 526.

Payment of an honest debt, while insolvent and in violation of the statute of another State, insufficient. Casola v. Vasquez, 147 N. Y. 258.

Executing, and withholding from record, transfers, until just before judgment, and continuing to act as owner meanwhile, held enough. Allen r. Meyer, 7 Daly, 229.

Buying without disclosing insolvency, and sale in the ordinary course of business, followed by a general assignment, not enough. Freeman v. Campbell, 1 N. Y. St. Rep. 728.

Preferring in a general assignment particular creditors who gave credit

on the defendant's agreement to prefer them in case of failure, not a fraud on other creditors. National Park Bank v. Whitmore, 104 N. Y. 297, 6 Cent. Rep. 361 (overruling, on this point, 40 Hun, 499). Contra, Smith v. Craft, 11 Biss. 340.

Omitting in general assignment to prefer wages as required by statute, held not enough. Blackington v. Goldsmith, 3 How. Pr. (N. S.) 77.

Though an assignment be a general one in trust for creditors, yet fraud in fact as against the creditors of the assignor furnishes the right to an attachment. Skinner v. Oettinger, 14 Abb. Pr. 109; Buhl v. Ball, 41 Hun, 61, and cases cited.

Mere fact of assignment with pref. erences, and that the goods which plaintiff had just sold to defendant could not be found in his store, held not enough. Struthers r. Hoffstadt, 19 Wkly. Dig. 242.

Assignment, with fraudulent preference of a dormant partner, held enough. Claflin r. Hirsch, 19 Wkly. Dig. 249.

Large drafts by individual mem bers of a firm on the firm moneys just before assigning, held sufficient. Vietor v. Henlein, 34 Hun, 562 (compare a previous decision in 33 id. 549);

FORM No. 833.

Allegation of fraud in contracting debt and disposing of property.12

[Insert in Form 828.] III. That the defendant has been guilty of a fraud in contracting said indebtedness, as deponent verily believes, and has assigned, disposed of and secreted his property, with intent to defraud his creditors.

Before the purchase of said goods to wit, on or about the day of

[ocr errors]

19

the defendant, in order to induce plaintiff to sell and deliver to him the goods in question on credit, stated to deponent that he was doing a good and lucrative business; that he was worth fully dollars over all his debts and liabilities; that he did not owe anything at all to his relatives; and that even if he should be in need of money he would rather go to any of his creditors than to his relatives, and that rather than ask his relatives for any money he would go to strangers. Relying upon

Globe Woolen Co. v. Carhart, 67 How. Pr. 403.

Transfer of interest by one partner to another, held sufficient. Hirsch v. Hutchison, 3 Civ. Pro. R. (Browne), 106.

Making general assignment for benefit of creditors, which is constructively fraudulent by reason of powers conferred on the assignee which may delay creditors, but there being no actual fraudulent intent, is not enough. Milliken v. Dart, 26 Hun, 24.

But an assignment which appropriates partnership or individual property, contrary to the respective rights of individual or partnership creditors, is sufficient ground as against a creditor aggrieved. Friend v. Michaelis, 15 Abb. N. C. 354.

Partnership assignment, giving preference to debts of a firm composed of part of the partners, held not fraudulent within the rule. Peckham r. Mattison, 15 Abb. N. C. 367, note (reviewing cases on question whether partnership assignment is fraudulent).

Transfer of firm assets by one partner to the other, and assignment by the other, with preference of his individual debts, accompanied by his confession of judgment to his individual creditors, held not enough to entitle partnership creditor to attachment. Gutman v. McNulty, 22 Wkly, Dig. 241. (Compare 105 N. Y. 476.)

12 The authorities are not agreed as to how far fraud in contracting or incurring the liability is ground for attachment by reason of such fraud being "an injury to personal property." It is well settled that an efficient interference with the owner's dominion or control of his property, is an "injury to property," within the meaning of the statute; although the thing itself, or subject of property, be not injured. Thus the conversion or embezzlement of securities is an injury to the owner's property in them. There is no good reason why the same principle should not be applied to a case where one is induced to part with his money or goods by false representations; and upon this view, an action to recover a sum of money only, as damages for such a fraud, is within this section of the statute; and to this effect are Stewart v. Lyman, 62 App. Div. 182, 70 N. Y. Supp. 936 (purchase of worthless securities); Bogart v. Dart, 25 Hun, 395 (action to recover advances made on forged paper); Denedict v. Guardian T. Co., 58 App. Div. 302, 68 N. Y. Supp. 1082; Campion Card, etc., Co. v. Searing, 47 Hun, 237; Weiller r. Schreiber, 11 Abb. N. C. 175 (action for damages for inducing purchase or sale of goods by fraud). To the contrary is Wittner v. Von Minden, 27 Hun, 234 (holding that in an action for damages for fraud in obtaining goods, attachment could not

[ocr errors]

this and upon the faith thereof, and not otherwise, these plaintiffs through deponent allowed him to have said goods on credit. Deponent further says that said statements of the defendant were and are in all respects false and untrue when he made the same. On the day of 19 the said defendant made an assignment for the alleged benefit of creditors, dated on that day, and recorded on that day in the office of the clerk of the city and county of New York, in which [here were concisely stated leading provisions of the assignment, showing large preferences to wife and brothers for alleged borrowed money].

Deponent says that he is conversant with the stock of merchandise owned by the defendant at the time of such assignment, having seen it this morning; that deponent knows the value of the said stock, having been in that business for about ten years; that the said stock is not of greater value than about dollars; that

this morning defendant's bookkeeper stated to deponent that all the outstanding accounts of the defendant amounted to dollars, which includes good, bad and doubtful debts; that the defendant had about dollars in merchandise in

That the whole of said outstanding accounts and other assets will, in all probability, not realize more than sufficient to cover the two preferences of said [wife and brothers]; that all creditors will be left remediless.

issue); and Achelis v. Kalman, 60 How. Pr. 491 (holding apparently that in an action for conversion, founded on plaintiff's claim that he had rescinded the sale because induced by fraud, defendant's disposition of the property could not be ground for an attachment, although it might be for an arrest). These latter cases are probably over-ruled.

If the action is for the price of the goods sold an attachment is obtainable, although the complaint contains additional allegations charging fraud in inducing the contract. The action continues to be upon contract. Whitney v. Hirsh, 39 Hun, 325; Hoboken Beef Co. v. Loeffel, 23 Abb. N. C. 93, 4 N. Y. Supp. 798, 16 Civ. Pro. 394.

See

In some cases the doubt arising on these authorities may be avoided by framing the complaint for conversion. In cases where the fraud in contracting the debt and a fraudulent disposition of property are connected as part

of one scheme to defraud creditors, the fraud in contracting the debt, even on the view that it is not in itself a cause of action on which attachment may issue, is proper evidence of the intent to defraud creditors, which will sustain an attachment in an action founded on the contract, or for a conversion. For an instance, see Blake t. Bernhard, 3 Hun, 397.

If breach of contract is stated as the cause of action, additional allegations in the complaint, showing fraud in contracting the debt, inserted for the purpose of avoiding an anticipated defense such as unexpired credit, or a bankrupt's discharge-should not be deemed to render the action any the less an action on contract.

The above Form is adapted from an unreported case in which the attachment was sustained. For another form of affidavit to fraud in contracting debt and secreting property from creditors, see ARREST.

Deponent verily believes that defendant at the time he obtained said goods from plaintiff, was already insolvent and knew himself to be so, and fraudulently concealed that fact from these plaintiffs. That as far as deponent has been able to learn, his liabilities amount to upwards of dollars, and that the greater part

of them are for purchases of merchandise, consisting of which the defendant has bought within the last three or four months, and none of which are paid for. Deponent further says that as regards the dollars preference to the wife of the defendant, the defendant, in the presence of deponent, on or about March 19, stated to this plaintiff that he had received from [name], a brother of his wife, dollars to help him, the defendant, in business, and that the money was part of his business capital, and not his wife's money, and he distinctly said that the money was his own and in his business, which made his capital so much larger. Nevertheless he now prefers his wife for the amount in the assignment, falsely claiming it to be a loan by the wife to him.

[Corroborating affidavits were added.]

FORM No. 834.

Undertaking on attachment.13

[Title of court and action.]

Whereas, the above-named plaintiff has applied, or is about to apply in the above entitled action, for a warrant of attachment against the property of the above-named defendant, Y. Z., in one of the cases provided by law:14

Now, THEREFORE,* we, the undersigned, 15 C. D., of No.

street, in the city of

State of New York, and E. F., of No. town of

and county of

hereby jointly and severally undertake,

and county of

street, in the

, and State aforesaid, do pursuant to the statute,

that if the above-named defendant Y. Z. [or, defendants, or either

13 Deposit cannot be accepted instead. Bate v. McDowell, 48 N. Y. Super. Ct. 219.

14 It is not essential to recite the ground of the application; and since the enactment of § 642 of the Code of Civil Procedure, which declares that it is no defense to an action on an undertaking, that a warrant was granted improperly, it may be better to omit any detailed recital as super

fluous, and, possibly, embarrassing. The advantage of inserting any recital is to constitute conclusive evidence of the fact recited.

15 It is not essential that plaintiff sign this undertaking, nor that there be more than one surety. if the court or judge accepts it without. N. Y. Code Civ. Pro., § 811: S. P., as to plaintiff, Pierse . Miles, 5 Mont. 549; 6 Pac. Rep. 347. In the first department,

of them], recovers judgment,16 or if the warrant is vacated,17 the plaintiff will pay all costs, 18 which may be awarded to said defendant [or, defendants—or, either of them], and all damages which he [or, they] may sustain by reason of the attachment, not exceeding the sum of [at least two hundred and fifty] dollars.19 [Date.] [Signature.] [Acknowledgment, as in Form 822, of this volume; Affidavits of sufficiency as in Forms 823; Approval, as in Form 824.] [Justification if required, as in volume I, Chap. I, Art. XXV, on UNDERTAKINGS, pp. 480, etc.]

SECTION II.

THE WARRANT AND ITS ENFORCEMENT.

FORMS.

I. THE WARRANT.

835. Warrant of attachment.

836. Notice of motion or order to show cause upon application to amend warrant.

837. Order amending warrant by reducing amount.

838. Warrant of attachment on the ground of wrongful conversion of public moneys.

the judge should always require two sureties, or a surety company. Goldmark v. Magnolia Metal Co., 28 App. Div. 264, 51 N. Y. Supp. 68.

16 This includes final judgment on appeal. Bennett v. Brown, 20 N. Y. 99.

17 This clause would not be implied if not expressed. Waterfield v. Wilber, 7 West. Rep. 864.

If the action is discontinued before defendant's appearance, the sureties are liable. Straus v. Gilhou, 80 App. Div. 50, 80 N. Y. Supp. 180.

Partial vacating not a breach. Sheldon v. Sabin, 4 Civ. Pro. Rep. 4; Lee v. Homer, 37 Hun, 634 (holding that the sureties are liable for costs where the complaint has been dismissed upon motion of the defendants, although the warrant has not been vacated).

18 Baere v. Armstrong, 26 Hun, 19, 20 (holding that in no event can the

II. LEVY AND CUSTODY.

839. Inventory of property attached.
840. Oath of appraisers.

841. Return to attachment.
842. Order requiring sheriff to return
an inventory.

843. Appointment of keeper.
844. Order permitting plaintiff to ex-
amine defendant's books of ac-
count in the hands of the
sheriff.

sureties be held liable for more than the difference between the amount paid by the principal for costs or damages and the sum specified in the undertaking).

As to what costs and expenses will be allowed as against the sureties, see Northrup v. Garrett, 17 Hun, 497; Tyng v. Am. Surety Co., 69 App. Div. 137, 74 N. Y. Supp. 502; aff'd, 174 N. Y. 166.

19 The court has power to require further security. Manda v. Etienne, 13 App. Div. 237, 43 N. Y. Supp. 194; Whitney v. Deniston, 2 Supm. Ct. (T. & C.) 471; and volume I of this work, p. 476. One-tenth the amount of the demand is sometimes required, in analogy to the rule as to arrest. Bamberger v. Duden, 9 N. Y. St. Rep. 986. See, also, Guest v. Lowther, 84 App. Div. 462, 82 N. Y. Supp. 1015.

« PreviousContinue »