Durell v. Haley

1 Paige Ch. 492 | New York Court of Chancery | 1829

The Chancellor :—This is a clear and palpable case of fraud. It is not very material to inquire whether the judgment bond was given for a real debt or one which was entirely fictitious. If the cause turned on that question I should be inclined to believe the whole transaction was fraudulent from the beginning. But the purchase of the goods was a gross fraud, so that the title to them was not changed. Haley knew he was insolvent and unable to pay for these goods, and unquestionably purchased them with a view to subject them to the execution which had been previously issued; and to induce the complainants to sell, he paid up a small sum due upon his antecedent purchases. If a purchaser who is insolvent conceals that fact from the vendor, and thus obtains goods without intending to pay for them, it is a fraud, and the property is not changed in the hands of the vendee :^[1] but the goods would be protected in the hands of a bona fide purchaser from the fraudulent vendee, if he had purchased and paid for the same without notice of the fraud.^[2] In Sinclair v. Stevenson, (10 Moore’s R. 53,) Best, Ch. J., says if a person orders goods to be sent to him at night, and early the next morning commits an act of bankruptcy, he must be taken to have obtained possession of them by artifice or fraud. The case of Van Cleef v. Fleet, (15 John. Rep. 147,) is directly in point to show that the property was not liable to the execution of Turner. I have no doubt he was well acquainted with the fraud; but certainly he cannot be considered a dona fide purchaser, as he had enough at least to put bim on ^inquiry. There must be a decree that the goods be restored to the complainants, and that the defendants pay the costs of this suit. I shall also direct that the copies of the pleadings and proofs be delivered to the District Attorney of New York, that he may lay the case before the proper tribunal, to inquire whether the defendant Haley is not liable to be punished for obtaining these goods by false pretences.

[1] Cary v. Hotaling, Hill, (N Y.,) 311; Lloyd v. Brewster, 4 Paige, 537; Root v. French, 13 Wen. 570; Ash v. Putnam, 1 Hill, (N. Y.,) 302; Whitney v. Allaire, 4 Denio, 554; Olmstead v. Hotaling, 1 Hill, (N. Y.,) 317.

[2] Ash v. Putnam, 1 Hill, (N. Y.,) 302; Root v. French, 13 Wen. 570.