11 Abb. Pr. 283 | New York Court of Common Pleas | 1860
After a careful examination of this case, we are of opinion that the charge of fraud upon which, the defendants have been arrested, is sustained. We think that no other conclusion can be arrived at but that, either the de
On the 31st of October they induced the plaintiffs to make the loan by representing that their difficulty was but of a temporary nature; that they had then in their store, stock the value of which was over $20,000, and that with this loan of $10,000 they would be enabled to meet all their liabilities as they matured. The plaintiff, Humbert, urged them to examine their books carefully, and ascertain with certainty whether the loan would enable them to meet all their liabilities, for that the plaintiffs would not make it unless the defendants were certain that their failure would be averted by means of it, as the plaintiffs did not wish to create a new liability to be secured as a preferred debt in an assignment. The defendants reiterated their former statement, assuring the plaintiffs that $10,000 would make them completely safe, and that they would be able to meet all their liabilities, and repay the loan in the month of January following. Upon this assurance, the plaintiffs agreed to advance $10,000, taking the defendants’ notes, payable in December, January, and February, and gave the defendants a check for $9,834.15, deducting the interest for the time which the defendants’ notes had to run. A portion of the defendants’ outstanding liabilities consisted of notes held by the plaintiffs, maturing within sixty days, and it was agreed that these notes should be discounted by the defendants, and paid out of the loan, which was done. After this positive assurance as to the state of their affairs, and of their ability to get through with the aid afforded them, the defendants, in fifteen days afterwards, came to the plaintiffs to ask a further loan of $3,000, which was very naturally refused after the statement they had made, and the positive knowledge which they professed to have of their financial condition. In ten days after, they failed.
On the 6th of January following, they transferred to the plaintiffs the stock then in their store, representing it to be of the value of $9,000. It was appraised by a clerk of the plaintiffs. He says that no invoice was shown him by the defend
The defendants swear that their stock in the month of October was of the value, at cost prices, of $24,000. If this was true, it was for them to show what had become of $20,000 within two months, or valuing what they transferred to the plaintiffs at their own estimate of $9,000, of at least $15,000 worth. They have put in a voluminous affidavit of over eighty folios, which is minutely particular in the elaboration of matters of little importance; but in respect to what became of the stock, a point upon which explanation was imperatively demanded to repel the charge upon which they have been arrested, they content themselves with the brief and summary statement, that from the time of their failure they sold large portions of their stock for cash, which cash they used in making their payments; that they paid all the paper falling due before their failure except about $1,500, on which they got an extension; but not a single creditor to whom any payment was made is named. From the time of their failure until the 11th of January, they say that they paid off some judgments obtained against them, and compounded for some of their debts by paying a percentage in cash, and that they gave a small portion of their stock to one Walsh, in part payment of an indebtedness of $7,993. A search, instituted by the plaintiffs, shows judgment against them to the amount of $3,157, and the list of their creditors shows an indebtedness to the extent of $91,287.33. About one-third of their creditors, and to whom more than one-half of the amount was due, were called upon at the instance of the plaintiffs, that is, all that could be seen up to the time of the hearing of the motion, and the answers obtained were that they had received nothing, except in one instance, of a payment of $500. A statement could have been readily made from the defendants’ books, and annexed to their affidavit, showing the creditors whom they paid, and the amount respectively paid to each, which would
Up to the time of their arrest they did nothing towards providing for the creditors. They proposed to pay fifty cents on the dollar, which their creditors were generally willing to accept, but afterwards declined because some of their creditors, whom they do not name, would not take it, and because the value of their assets had depreciated by delay, and they did not think they could pay over twenty-five cents. They then offered that amount, but nothing came of it. They were .asked to make an assignment for the benefit of creditors, and have not done so, giving as a reason that their counsel advised them not to do it, and that they believed that it would be better for their
The order made at special term is affirmed.