11 N.Y.S. 471 | N.Y. Sup. Ct. | 1890
The plaintiff, as the assignee of his own firm and of six other parlies, brought this action to recover the possession of personal property sold and delivered to Ephraim M. Kantrowitz. The sales were made partly in May, but mainly in June, 1888, and they consisted generally of furniture and carpetings. On the 29th of June, 1888, Kantrowitz, the purchaser, sold and transferred to the firm of H. B. Claflin & Co. “the stock, fixtures, store and office furniture, good-will, trade-marks, horse, harness, and truck, and another property connected with or pertaining to the store of the party of the first part, situated at No. 1 Fourth avenue in the city of New York; also the goods on storage, or contained in the basement at No. 212 Bowery, belonging to the said party of the first part.” Claflin & Co., on the same day, sold the property to Miles O’Brien, who placed it in the possession of the appellants, as auctioneers, for sale. The parties from whom Kantrowitz had purchased the furniture and carpetings claimed to have been induced to make the sales by means of fraudulent representations made by him concerning his pecuniary condition, and that he made this transfer afterwards to the firm of Claflin & Co. to defraud his creditors, and that they received the transfer understanding that to be at the time his intention, and, to carry that more completely into effect, that they transferred the property to Miles O’Brien. The referee adopted this view of the case, and held the plaintiff to be entitled to recover the goods in controversy, or their value. At the time of the commencement of the action, the goods were in form taken by the sheriff under-process of claim and delivery, but, upon an undertaking executed on. behalf of the appellants, the goods were restored to them; and, by the final conclusion of the referee, it was determined that the plaintiff was entitled to the possession of the property, and, if possession could not be obtained, to the value thereof, with interest, amounting to the sum of $2,406.82.
The conclusions of the referee concerning the nature of the purchases made by Kantrowitz and the subsequent sales of the goods have been criticised with uncommon severity by the counsel for the appellants. It has been urged that these conclusions were devoid of evidence, and that the judgment accordingly is very clearly erroneous. But very direct proof was given that the sales made by Elliott & Cougle, Otto Denecke, and the Anderson & Blatt Folding-Bed Company were procured by means of direct misrepresentations; for Kantrowitz is shown to have represented to the persons acting on behalf of these vendors, shortly prior to the time of the sales, that he had the sum of $18,000, which he had received from his .preceding firm, and put into tire business
The defendant Kantrowitz was examined as a witness on behalf of the plaintiff, and from his testimony, which certainly may be assumed to be credible so far as it was against himself, it was shown that he was aware of his own insolvency as early as the 15th of June, 1888, and probably as early as the commencement of his business; for he does not appear to have encountered any substantial loss in his business from the 17th of February, when he made the statement to the Lyon Furniture Association, to the time of his sale to Olaflin & Co., and this condition of his affairs exhibits the fact to be thai when he made the representations they were untruthful, and designed to deceive the persons to whom they were made. For, notwithstanding the concession made by himself that he was aware of his owrn insolvency as early as the middle of June, 1888, he still continued to purchase goods from persons who sold him under the evident impression that his representations were truthful. From Elliott ¿kCougle he purchased a folding-bed for the price of $72, on the 29th of June, which, in compliance with his order, was sent to the city of Chicago. On the 26th of June he purchased goods amounting to the sum of $51 of the firm of Blanek & Co., which were delivered on the 29th; and on the 29th of June he also purchased bedding of Otto Denecke. These last purchases were made on the same day and the day preceding the sale of his entire stock to H. B. Claflin & Co., and after he had become, from his own evidence, entirely aware of his insolvent condition and inability to continue his business, and they, together with the other evidence, supply unmistakable proof that he was actuated with a fraudulent intention in making his purchases; and that is further confirmed by the fact that no part of the moneys received, by him from the sale of his stock was appropriated to the payment of these creditors. As to him, therefore, the plaintiff, as the assignee of "these parties, was entitled to recover the articles sold after they went into the possession of the appellants, and they had been demanded from them, and they had refused to deliver them.
A special objection has been taken to the right of the plaintiff to recover as the assignee of the Indiana Furniture Company, on the ground that the company was not induced to sell its furniture to Kantrowitz by means of any false representation made to that company. But the evidence of the agent Alexander C. Kelly deprives this objection of its support, for the representation was made by Kantrowitz directly to him, and was then communicated by him to the company in'Indiana, which ordered the sale of the goods; and the witness testified that after that the goods were shipped on the basis of the statement made to the witness. There was nothing, therefore, in this sale substantially distinguishing it from the others which have been referred to. The facts that the referee mistook'the time when the statement was made to the Lyons Furniture Association, or assumed the immaterial circumstance that
The firm of H. B. Claflin & Co. are chargeable with the information in this manner acquired by Jordan in the transaction of the business, and must be held to have been aware of the fact that Kantrowitz had reached the point where he could not continue in his business; but.that, of itself, would not prevent them from obtaining a valid title to the property sold, so far as the consideration paid for it was valuable, as it certainly was to the extent of the check given by them to Kantrowitz. But there were circumstances attending the sale and the conduct of their representative in procuring it that indicated the conviction on his part that Kantrowitz designed to dispose of this property in fraud of the rights of his other creditors. These circumstances consisted mainly of the important'fact that the property was purchased speedily, and without any inventory, or such careful examination as apparently would have been made in the exercise of good faith. It was taken at a round sum of $10,000, without any such investigation as would ordinarily be expected to be made by careful or discreet purchasers of that amount of property, not consisting generally of articles in which this firm was engaged in dealing. Then, under an evident consciousness, not denied by Jordan, that the purchase might not be capable of being sustained, a sale was immediately made, through the intervention of Jordan, to Miles O’Brien, another person in the employment of H. B. Claflin & Co. This sale was made for the sum of $500 less than the price for which the property was bought by Claflin & Co., and the reduction does not appear to have been caused by any observation or examination leading to the supposition that the firm had been mistaken as to the value of the property bought; but the object of this sale could very well by the referee be inferred to have been the confirmation of their purchase in such a manner that it should not be disaffirmed by the creditors of Kantrowitz. This probability is increased in its effect by the fact that O’Brien obtained from the cashier of the firm of Claflin & Co. the $3,000 he paid to J ordan upon his purchase. The residue, amounting to $6,500, was included in a promissory note of O’Brien given to the firm, due in three months afterwards. O’Brien did not require the property for any special purpose; neither was any inventory of it made apprising him of the articles, or the extent of the stock,
The referee found the value of the property in dispute at the time of the trial, and, while there was no direct evidence as to this value, there were circumstances from which the fact could be inferred, as he has stated it in his report; for the goods were sold to ICantrowitz at the prices which the referee has considered to be their value when the action was tried, and the sales which were made to H. B. Claflin & Co., and by them to O’Brien, and by the defendants as auctioneers, sustain the conclusion that this was the fair value of the goods in controversy; and, as no change in the market price or value of the goods was shown to have taken place between the time when they were sold and the trial of the action, the inference was fairly reasonable that the goods were of the same value at the time of the trial as they were when they were sold to ICantrowitz. The probabilities were all with the plaintiff, and the presumption, in the absence of any proof warranting a different conclusion, would be that the property continued to be of the value for which it had been sold by these different dealers.
Objections were taken to the introduction of the sworn statements of Kantrowitz, made upon his examination in supplementary proceedings, but these-statements were not introduced as evidence upon the trial of this action against these defendants, but they were introduced to bring the attention of the witness Kantrowitz to the statements which he had made in the course of his supplementary examination: and then the question was asked him whether those statements were true, and, so far as they had any importance or materiality in this litigation, he testified that they were. This was not
Other objections to these parts of the case have been presented upon the argument, but they are not of such a nature as to deserve special consideration, inasmuch as the leading facts upon which its disposition depended were established on the trial, and no legal difficulty stood in the way of maintaining the action against the auctioneers, who had the actual possession of the property. The case in that respect is quite distinguishable from McDougall v. Travis, 24 Hun, 590, where the possession was no other than that of a servant. Neither is there any defect in form in the decision of the referee, or the judgment entered upon it, for it lias fixed the value of the chattels in dispute, and the damages, by way of interest, the plaintiff was considered entitled to recover, as that has been required by section 1726 of the Code of Civil Procedure. But, if. there should; be held to be any formal mistake in this respect, the judgment cannot be reversed on account of it, for it can in no manner prejudice or injure the defendants, or those represented by them, in the least degree, and must, in comformity with sections 721-723 of the Code of Civil Procedure, be disregarded. The case contains no such defects as those in Wood v. Orser, 25 N. Y. 348, and that decision, therefore, has no application to the controversy. But it does appear that a larger amount of interest was allowed by the referee than could legally be computed for the time mentioned in the report. So, also, it appears from the evidence that the sales made by the firm of Theodore W. Bailey & Co. to Kantrowitz were not induced by means of fraudulent misrepresentations, as the others were. John W. Hoyt, the witness examined in behalf of that firm, testifies that he made the sales relying upon a statement obtained from Dunn & Co. concerning the financial condition of Kantrowitz; while it appears by the evidence of a person in the employment of Dunn & Co. that no statement was obtained from Kantrowitz by that firm, and Kantrowitz himself testifies that he made no statement of his affairs to that firm, and there was no proof in the case that he ever had made such a statement, and consequently he was not responsible for the information which Dunn & Co. may have given to the representative of Bailey & Co. Mr. Hoyt was recalled, and further examined as a witness, but he stated no more upon this subject than that Kantrowitz said: “I have money and stock enough to make a success of it.” This, however, was not made, in any form, the foundation of the referee’s decision as to the plaintiff’s right to recover for the goods sold by Bailey Jo Co. He has placed that upon the statement that Kantrowitz represented himself to be worth $15,000 which was $12,000 over his debts and liabilities, and that this firm sold the goods which they delivered to him relying upon the truth of that representation. This conclusion of the referee is unsupported by the evidence, and for the goods which they sold, amounting to the sum of $768.62, the plaintiff did not accordingly establish his right to maintain the action. As to this part of the case, the evidence was radically defective; but it does not follow that the judgment should be reversed on account of this error, for this was a separate and distinct sale from each of the others alleged as the ground of the sixth cause of action mentioned in the complaint, and, where that is the nature of the demand erroneously found to exist, the judgment may be corrected by its deduction, with the assent of the plaintiff. Crim v. Starkweather, 88 N. Y. 339, 341. On this account, and to correct the allowance of interest contained in the report of the referee and the judgment, the judgment should be reversed, anda new trial ordered,