20 N.Y.S. 780 | N.Y. Sup. Ct. | 1892
There is presented on this appeal a sole question of law, upon the following admitted facts, from which it appears that in the spring of 1888, Frederick D. Blake and Charles Waterman were partners, engaged in the dry goods business under the firm name of F. D. Blake & Co. They were deeply indebted to various creditors, including the plaintiff, and, becoming insolvent, executed a general assignment of all their property to James H. Thorp on the 24th of April, 1888. On the 4th of June, 1888, the creditors of F. D. Blake & Co. signed a composition agreement, by which they agreed to take 40 per cent, of their respective claims, to be paid by four notes made by the members of the firm, each for 10 per cent, of the claim, two payable in 6 and 12 months, and two in 18 and 24 months, the latter two indorsed by Sarah F. Blake. The Hanover Bank, desiring to have the security of Mrs. Blake upon all the notes, asked that she indorse the first two as well as the last two, which she did. This was not known to the other creditors, and was a security additional to that provided by the terms of the composition agreement. The note in suit is the .third of the series, payable in 18 months, and properly indorsed by Mrs. Blake in accordance with the composition agreement. Upon these undisputed- facts, both counsel at the trial moved for judgment, which the court directed for the defendant, to which exceptions were duly taken, thereby- raising the
In the absence, therefore, of authority, it remains for this court to determine which of these two contrary views finds most support in principle and reason. This note in suit was received as part of an agreement which was unquestionably fraudulent, and it is only upon a theory that the agreement is divisible that the note in suit could be unaffected by the taint of fraud imbuing the transaction. The giving of the four notes, however, was unquestionably the result of a single fraudulent"agreement; and, as fraud vitiated the agreement itself, it is difficult for us to determine upon what principle it could be