10 N.Y. St. Rep. 818 | N.Y. Sup. Ct. | 1887
The proposition in controversy at the trial was whether Sterrett had any interest in the certificates in question at the time the attachment was levied, which depended upon the question of fact submitted to the jury whether the plaintiffs’ firm was solvent or insolvent. Because the copartnership as such had rights and interests distinct-from-■those-of the 'several members, -and they severally had no individual interest except in a surplus that should remain after adjustment and settlement of the partnership affairs. And if the firm was insolvent, the member Sterrett had no interest in the firm property. (Staats v. Bistow, 78 N. Y., 264; Menagh v. Whitwell, 52 id., 146; Morss v. Gleason, 64 id., 204; Tarbell v. West, 86 id., 280.) And the right of property for the purpose of paying the partnership debts, as against-the appropriation of it to
The financial situation of the plaintiffs depended upon the price of oil. On December eighth the highest price was $1.17j- and the lowest $1.12. On December eleventh the price was $1.12 and
Solvency imports adequate means of a party to pay. his debts, which embraces within its meaning the opportunity by reasonable diligence to convert and apply to such purpose. In other words a person is deemed insolvent who at the time in question is unable to pay his debts in the ordinary course of business. {Shone v. Lucas 3 Dow. & Ry., 218; Thompson v. Thompson, 4 Cush., 127; Lee v. Kilburn, 3 Gray, 594, 600; Herrick v. Borst, 4 Hill, 650.)
The situation of the plaintiffs’ property did not enable them to put it into market on the day the attachment was levied or the two
The defendant’s counsel requested the court to charge “ that if the jury are convinced that this conveyance to the Second National Bank of Titusville was made for the purpose of hindering, delaying and defrauding the creditors of the firm or the creditors of Mr. Sterrett in collecting their debts, they wei’e at libei’ty to consider that property at what they deem its fair valuation as assets of the firm on the 8th day of December, 1882, for the purpose of ascertaining whether it was solvent or insolvent,” and to the refusal of the court to so charge, excepted. The court, in the charge in referring to that subject, did not distinctly affirm or negative that proposition. While the direct evidence tends to prove that the sale was in good faith, there are some circumstances which may have given the opportunity to parties, situated so as to permit them so to do, to raise the question of the bonafides of the sale. But we do not see how that question is available to the defendant in this action. When property subject to original levy and sale by execution has been ti’ansferred by the debtor in fraud of his creditors, the officer subsequently levying an attachment upon the property, the attaching creditor or the purchaser at the sale finally made on the execution, may, in defense of the attachment lien or the title derived from its execution, defeat such transfer by showing that it was fraudulent as against the creditors of such debtor. (Rinchey v. Stryker, 28 N. Y., 45; Frost v. Mott, 34 id., 253.) This rule is not applicable to dioses in action upon which attachment is levied, after a transfer of them, when no intérest as between the parties to it remains to the debtor. (Anthony v. Wood, 96 N. Y., 180.) Ti’eating the certificates as in the nature of certificates of deposit and embracing an undertaking of the Pipe Line Company to deliver the oil to the holder of them on demand, they would seem to be choses in action merely. This may not be important because no such transfer of them is in this case. The sale and conveyance referred to were absolute in terms and as between the bank and the plaintiffs, the
This case is somewhat novel in this State. And we have proceeded to the conclusion on the merits upon the acquiescent theory of the parties, upon which the action was tried at the circuit and has been argued here, that if the firm was shown to have been insolvent on December 8, 1882, the plaintiffs -were entitled to recover, otherwise not, without expressing what views may otherwise have been entertained in respect to the remedy sought by the action. But - it is proper to say that, for the purposes of an action like this one, and in its support, the question is not satisfactorily settled by authority. There is a conflict of adjudication in the different States in respect to the right of the officer making the levy and sale in such case to take the property and to deliver it into the possession of - the purchaser. In Phillips v. Cook (24 Wend., 389) it was held that the property may be delivered to the purchaser who takes the place and relation of a tenant in common, may have an accounting of the partnership matters to ascertain the debtor partner’s interest in the surplus, if any, of the partnership assets, and in the meantime, and subject to the accounting, retain the possession of the property. This has the support of other cases in this State. ( Walsh v. Adams, 3 Denio,
The doctrine which permits the delivery of the property to the purchaser enables the creditor of a single partner to place the partners not sued in a worse condition than the partner could place them, which is one of the reasons against it given by the courts in denying the right to delivery of such possession. By the application of that doctrine, there would seem to be nothing in the way of the maintenance of an action to recover the firm property, or as for its conversion, when so taken from its possession on account of the individual debt of a partner, without reference to the question of solvency or insolvency of the firm. But, as we have seen, such is not the rule hitherto adopted in this State. Farther than this it is not necessary to express any opinion for the purposes of this case other than that embraced in the views already given.
The several exceptions taken to the reception of evidence we have examined, and think no error was committed in the rulings to the prejudice of the defendant; and that none of the other exceptions were well taken.
The order should be affirmed.
Order affirmed.