93 N.Y.S. 821 | N.Y. App. Div. | 1905
The action was brought to recover from the assignee for the benefit of the creditors of the defendants Clarke the proceeds of a check
If these findings of fact are sustained by the evidence the legal conclusion follows, and consequently the question is whether there is evidence to sustain these findings of fact. The evidence is undisputed that upon the deposit of this check with the defendants-Clarke they gave the plaintiff’s assignor credit for the amount of the check, the amount beirig entered in the' passbook of the plaintiff’s assignor, and that thereupon the defendants Clarke on the same day deposited the check with the Chatham National Bank, with which the Clarkes had an account; and it: was admitted that on the same day, December third, the check was collected from the bank upon which it was drawn. There, was thus received by the
.The mere fact of insolvency at the time the deposit was received is hot sufficient to, justify a finding of. fraud, but the insolvency must be of such a character that it was manifestly impossible for. the bankers to continue in business and meet their obligations,,and that fact must have been known to the bankers, só as to justify the. conclusion that the bankers accepted the depositor’s money know7 ing that they would not and could not respond when the depositor demanded it. It is fraud that must be proved:. An honest mistake as to the condition of the bank and an honest belief'in the solvency of the institution, if it exists, negative the conclusion of the fraud upon which the plaintiff’s cause of action must depend. Now, on the' afternoon of December third, at two o’clock, the plaintiff’s assignor deposited this check with the Clarke bank and received at that time a credit for the amount, and the Clarke bank proceeded to collect the check, and it is conceded that it was collected on the same day. It then appeared that on December fourth the defendants Clarke made a-general assignment for the benefit of creditors to the defendant, the Van Norden Trust Company, and' that such assignment was filed in the office of the clerk of the county of New York on the 5th day of December, 19.03, this assignment being admitted by the answer. There was then introduced in evidence by the plaintiff the inventory and schedules of the firm of James Clarke and Hudson Clarke, which contained a summary of the. assets, as follows:
“ Debts and "liabilities amount to.................. $54,497 81
' Assets nominally worth........'.>.....;.......... 55,850 77
■ Assets actually worth,.......................... 51,500 43.”
- . . . This left the. firm with a deficiency of assets of a little over $4,000. The inventory and schedules were not signed by the Clarkes* but were signed by an officer of the Van Norden Trust Company, the assignee. The defendant Hudson Clarke was then called as a witness" by the plaintiff and testified that he was a member of the firm of William Clarke & Sons; that he was engaged in a, banking business
Thus the only evidence of knowledge of insolvency by the bankers was the sworn statement of one of the firm of bankers called by. the plaintiff that they were not insolvent; that he believed that they were perfectly able to go on in business and pay all their debts,
I am- also of the opinion that the evidence fails to' establish that the proceeds of this check actually came into the hands of the . assignee. Assuming that there had been fraud and that the plain- ' tiff was entitled to rescind the transfer of the check to the bank, as against the assignee, the plaintiff cannot recover unless he can prove that the identical money realized from this check came into the possession of the assignee. Immediately after the check was deposited in Clarkes’ bank they deposited the check in the Chat-ham National Bank. At .the close of business on the 2d of December, 1903, the day before the deposit, the Clarkes had on deposit With.the Chatham National Bank a'balance of $4,678.34. On the third of December there were two deposits made, one of $4,432, and one of $1,793, one of which deposits probably included the check deposited by the plaintiff. During the third of Decern
I think the judgment appealed, from should be reversed and
Yak Brunt, P. J., O’Brien, McLaughlin and Hatch, JJ., concurred.
Judgment reversed, new trial ordered, costs to appellant to abide event.