83 N.Y.S. 193 | N.Y. App. Div. | 1903
The appellant contends that the findings of the learned trial court to the effect that the bill of sale was intended as an absolute transfer of the plaintiff’s interest in the- business, are against the weight of evidence, and that competent material evidence upon that issue was erroneously excluded. The substance of the testimony and evidence which we deem material is stated in the statement of facts. There is also evidence tending to impeach the credibility of the respective parties and of other witnesses, and there are many other items of evidence shedding more or less light on the litigated questions, which cannot be stated within the reasonable bounds of an opinion; but it has all been .given due weight. The credibility of the appellant is so shaken by his own. cross-examination that we would place but little reliance upon his testimony standing alone. The probabilities of the case, however, support the contention that this instrument was given to secure the firm’s indebtedness to respondent, and that it was executed in the form of a bill of sale in order that he would have absolute control of conducting the business in case of the firm’s financial embarrassment or of liquidating the business, unhampered by any interference on the "part of appellant.
The appellant does not seek relief from, the bill of sale on the ground of fraud or mistake. He merely claims the right to show, under a doctrine well established and looked upon with favor by the courts (Horn v. Keteltas, 46 N. Y. 605 ; Mooney v. Byrne, 163 id. 86 ; Barry v. Colville, 129 id. 302), that though absolute in form it was intended as security. No burden of showing fraud or mistake rested upon him. Of course, in so far as the instrument is in' conflict with his present claim, he has the burden of adducing evi
The respondent claims that the appellant’s interest, was of no value, and that the bill of sale was executed upon that under-, standing,. Appellant claims it was of great value; and if so, he-being in charge of the business and thoroughly familiar with the assets and liabilities,, he knew the fact and would not likely make a gift of the only property he had tb his brother-in-law, who was well to do financially, • If the firm had been dissolved and there was to be an accounting, he suggests that there would be no necessity for a bill' of sale as security. On the other hand, if appellant’s interest was of no value and respondent intended, as he represented, to close out the business, there would be no necessity for his taking a bill of sale, and the only office it would serve would be to obviate an accounting or dissolution proceedings. ■ This is scarcely an adequate explanation, when it is remembered that he intended to allow the business to be closed out by appellant, who fixed the selling prices,. as it was doubtless contemplated that he should. The relations of the parties continued friendly, and it is not probable that in these circumstances there would have been any difficulty over an accounting. The respondent did not. assume or agree to pay the debts of the firm. There were no negotiations for a purchase and sale. There was no inventory of stock, or examination of books, to ascertain the firm’s financial condition. It is quite- significant also that, according to the testimony of the respondent, there was no express
Upon the trial, the appellant, for the purpose of corroborating his statement that the bill of sale was merely intended to secure respondent on account of the firm’s indebtedness to him, on his main case offered evidence tending to show, not only that the firm was solvent, but that the assets exceeded the liabilities in a considerable amount, so that he had a substantial interest in the business. This evidence was objected to and excluded on the ground that the court would not go into an accounting in determining the main issues, and appellant excepted. Subsequently appellant was permitted to show from his personal knowledge and examination of the stock what he thought was the value of the assets^ the amount of the firm’s indebtedness to the respondent and to- others, separately and in gross. His evidence tended to -show that there was a surplus of assets over indebtedness cf $107,947.17. The respondent was permitted to controvert this by the testimony of an expert accountant, who- testified to the condition of the firm affairs as, shown by its books, from which he assumed that the liabilities exceeded the assets by $7,844.48. It appeared that there were transactions that were not entered in these books at all, and in some instances only the sales of certain commodities were entered, there being no entry- of the purchase or of the amount on hand. The expert testified that his calculations were made exclusively from' the books, and lie-deducted ten per cent of the stock shown to be on hand by the books, “ for lost, stolen and different things, as a matter of custom,” and computed the price from the average of all the purchases entered on the books for the entire period - of the copartnership down to the execution of the bill of sale. The appellant claims that there was other stock on hand in large quantities, not shown by the books, and that the price assumed by the expert was not the current market price at the time of the execution of the
It follows that the judgment should be reversed and a new trial granted, with costs to appellant to abide the event.
O’Brien and Hatch, JJ., concurred; Patterson and McLaughlin, JJ., concurred in result.
Judgment reversed, new trial ordered, costs to appellant to abide event.