In re M. S. Fersko, Inc.

250 F. 357 | 2d Cir. | 1918

LEARNED HAND, District Judge

(after stating the facts as above). We think it beyond question that Pezenik had no knowledge of the debt incurred by Eersko, assuming that there was any such debt at all, as to which we do not find it necessary to come to any conclusion. Fersko was certainly a most unreliable witness, and there is no inherent improbability in his having kept the matter from Pezenik. It was no proper part of the business to buy jewelry, for Pezenik had employed Eersko only to dispose of the stock. Pezenik had his own affairs to attend to, and seldom came to the shop; there was no antecedent probability that he should know of the transaction. It is true that Sass swears that he spoke to him about it, and of course Eersko also swears to the same effect, and it is perhaps also true that Pezenik did not directly deny the conversation with Sass. But he was not questioned about it, and the interview of February 29th is so well corroborated as to leave no .doubt in our minds that it took place as stated. At that time Eersko said that there was no substantial indebtedness and at other times he made statements to two other persons inconsistent with the idea that he had bought the mélée.

It is hardly possible that both Eersko and Pezenik were at that time engaged in a plan tó defraud the creditors of the corporation — the only conceivable theory which could account for the interview of P'ebruary 29, 1916. Sass and Eersko did not quarrel at any time, but throughout appear in dose and harmonious relations, if nothing more. Moreover, Pezenik’s disposition of the fund is wholly inconsistent with any such fraudulent plan; if he had intended to defraud Sass or the B. W. Jewelry Company, he would have secreted the funds more effectively than by simply depositing them in his bank account. The corporation was solvent three times over and more, and there would have been no possible purpose in trying to evade payment by such futile scheme. We conclude, therefore, with the District Judge, that the evidence shows beyond question that Pezenik had no knowledge of any indebtedness, other than as Fersko stated it on the 29th of February, and that his purpose was to close out the business honestly and put the proceeds out of Fersko’s power.

[1] The question, then, resolves itself into one of law. Was the conveyance, innocent in itself, a fraud, regardless of Pezenik’s intent, because his transfer to himself was voluntary? and second, if it was not fraudulent as matter of- law, may Fersko’s knowledge of the debt be imputed to the corporation in such wise as to make the conveyance fraudulent, irrespective of Pezenik’s own personal knowledge? The District Judge thought that the transfer from the corporation’s account to Pezenik’s was not a transfer within the statute of Elizabeth at all. We pass the consideration of that point, because we are satisfied that, even though it be regarded as a sufficient transfer, there was not the requisite intent. It is quite true that the interpretation of the statute of Elizabeth has not been in strict accordance with its wording. The creditor need not show a specific intent in the same sense that it must be shown in prosecution for murder or larceny. And so, for example, it is generally held that the voluntary transfer of enough property to leave the donor insolvent is within the statute, no matter what his specific or personal intent may be (Cole v. Tyler, 65 N. Y. 74), even though a voluntary transfer is not void ipso facto when the donor be indebted (Lloyd v. Fulton, 91 U. S. 479, 23 L. Ed. 363; Seward v. Jackson, 8 Cow. [N. Y.] 406). Indeed the last has long been the statutory law in New York. Personal Property Law (Consol. Laws, c. 41) i§ 38.

Yet, however little the courts may observe the requirement of a specific intent, they do require some intent to be proved as a fact (Coder v. Arts, 213 U. S. 223, 29 Sup.. Ct. 436, 53 L. Ed. 772, 16 Ann. Cas. 1008), and by the greatest extension it cannot be supposed that a man intends to hinder creditors of whose existence he is. in ignorance. The strictest rule can go no further than the usual rule of civil liability, under which an actor is charged with such consequences only as would reasonably be thought to follow upon his act. Here Pezenik had heard Tisch inquire of Fersko, the only person who could be expected to know, and Fersko had assured him that there were no debts beyond what the respondent could easily pay with what was left. By no1 possible test can Pezenik be charged with an intent under the statute.

[2] In order to charge the respondent, we must therefore resort to Fersko’s own knowledge. It is urged that, since he was the treasurer, his knowledge must be imputed to the respondent, and that with that knowledge the transfer was necessarily fraudulent. Fersko’s knowledge would, of course, be chargeable to the respondent in all matters performed by him over which his authority extended; but he had no authority to transfér the assets, and did not assume to do so. His knowledge acquired independently cannot be tacked to Pezenik’s in an enterprise with which he had nothing whatever to do and Pezenik everything. Blackburn v. Vigors, L. R. 12 App. Cas. 531; Irvine v. Grady, 85 Tex. 120, 19 S. W. 1028; Allen v. Rostain, 11 Serg. & R. 362, seems in fact to depend upon the same principle, though it is not clear that the court so intended. General Ins. Co. v. Ruggles, 12 Wheat. 408, 418, 6 L. Ed. 674, contains languagé to the same effect, though perhaps the court meant to go chiefly upon the theory that the master’s authority ended with the loss of the ship.

13ut, regardless of this, Eersko, at the time when Tisch asked him whether there were any debts, for some private purpose saw fit deceitfully to suppress the facts. His knowledge while in the execution of that purpose may not be imputed to the respondent by well-settled rules. American Nat. Bank v. Miller, 229 U. S. 517, 33 Sup. Ct. 883, 57 L. Ed. 1310.

The result of our decision does not, of course, involve the conclusion that the transfer is valid as against any creditor, should Pezenik later change his mind as to his offer upon these proceedings to pay all debts lawfully proved. The payment was made under a mistake of fact, if Sass has any claim at all, which is open to doubt, and it could be recovered by the respondent, or by its creditors after judgment. Besides this, the statutes of New York, such as section 28 of the Stock Corporation Raw (Consol. Raws, c. 59), may give independent relief. These considerations are irrelevant to a case necessarily depending upon a fraudulent conveyance. The only fraud which we can find was that of Fersko, whose whole connection with these proceedings was at best open to the gravest suspicion, and who certainly instigated Sass to file the petition.

The decree dismissing the petitions is affirmed, with costs.