Case ID: ny-st-rep_32/html/0250-01.html
Source: Caselaw Access Project
Author: {"author": "Corlett, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edward S. Jaffray et al., Resp’ts, v. Louis Nast et al., App’lts.
    
      (Supreme Court, General Term, Fifth Department
    
    
      Filed June 19, 1890.)
    
    Attachment — Affidavits.
    Affidavits stating that goods were sold on credit to defendants, who gave the impression that a wealthy brother was a member of the firm, when in fact he had withdrawn from it; that thereafter defendants gave a chattel mortgage to a bank, confessed judgment to it and rode twenty miles to confess judgment to said brother, and caused executions to be immediately issued and levied; that defendants requested time, and stated that all demands would be paid as they matured, but after the judgments were confessed refused to pay or secure plaintiffs’ claim; that they had made large purchases and had shipped large quantities to relatives; that the goods were found boxed in the morning and were immediately senl away, although all these facts are not stated in any one affidavit, are suffi cient to sustain an attachment, in the absence of explanations on the par of defendants.
    Appeal from an order denying motion to vacate assessment.
    Baker, Schwartz & Dake, for app’lts; D. Merville Page, for resp’ts
   Corlett, J.

On the 29th day of October, 1889, the count; judge of Allegany county granted an attachment against the de fendants’ property in this action. In December, 1889, the defend ants made a motion based upon the original papers to vacate th attachment. It was heard before Justice Macomber at the Mor roe special term, on the 30th day of December. The applicatio: was denied on the ground that the defendants were estoppec The court did not consider or determine the sufficiency of th affidavits upon which the attachment was granted. The defenc ants appeal from the order to this court.

The following stipulations were made in this action, which ai referred to in the order denying the application to vacate tl attachment:

“ It is hereby stipulated that on filing this stipulation with tl cleric of Steuben county an order may be entered by either part without notice to the other that this action be discontinued, wit! out costs to either party, and that the undertaking herein given 1 procure the injunction order be cancelled without any claim f< damages on the part of the defendants. That the injunction ordi herein granted November 2, 1889, by the Hon. William Eumse; and modified by him November 9, 1889, whereby the sheriff w; directed to pay $3,000 into court, to abide the event of this actio: be vacated without prejudice to any lien which the plaintiffs irn have under the attachment mentioned in the complaint herein.
“Dated Hornellsville, N. Y, November 20, 1889.
“ Beard & Griffin,
.Plaintiffs Attorneys.
“Dolson & Orcutt,
Attorneys for Citizens' National Bank.
“ Baker, Schwartz & Dake,
Attorneys for all other Defendants."
“ It is stipulated that the sheriff of Steuben county retain the sum of $2,250, part of the proceeds of the sale of the stock of goods formerly owned by Nast Bros., of Homellsville, N. Y.,.subject to the final determination of the within entitled action, wherein an attachment has heretofore been obtained by the plaintiffs herein, and under which a levy was made upon said stock. And it is further stipulated that said sheriff deposit said sum of $2,250 to his own order, and to the credit of this action in the Citizens’ National Bank of Hornellsville, N. Y., and hold said sum as aforesaid until the final determination of this action.
“ Dated Hornellsville, N. Y, November 20, 1889.
“ Beard k Griffin,
Plaintiffs' Attorneys.
“ Baker, Schwartz k Dake,
Defendants’ Attorneys."

After the attachment the plaintiffs commenced another action in its aid in enforcing their demand, and obtained a temporary injunction preventing. the sale of the defendants’ property on executions, which was afterwards modified by allowing the sale md directing the sum of $3,000 of the proceeds to be paid into ;he court to the credit of the action. Afterwards it was stipulated ;hat that action be discontinued.

The plaintiffs were merchants in the city of New York and the lefendants were retail dealers in Hornellsville, N. Y., doing busixess under the firm name of Nast Bros. Between the 10th day >f June, 1889, and the 24th day of September the plaintiffs sold he defendants dry goods of the value of $1,862.45 on credit, no >art of which has been paid. On the 28th day of October, 1889, he defendants Louis Nast and Samuel N. Nast confessed judgnents to their brother Philip N. Nast, Jr., for the sum of 111,622.75; also executed a chattel mortgage to the Citizens’ National Bank of Hornellsville to secure $4,032, and confessed a adgment to the said bank of $2,032 to secure a debt not then ue. Executions were delivered to the sheriff of Steuben county n the 28th day of October, by virtue of which the defendants’ ■took was levied upon. The application for the attachment is eased upon allegations of fraud under subd, 2 of § 636 of the ■ode. It was granted upon four affidavits ; one sworn to by the ■laintiff, Edward S. Jaffray, on the 28th day of October, 1889, which alleges, in substance, the sale of the amount of goods above Bated, and that no part was paid; that the amount due was the sum Biove stated over and above all counterclaims and discounts, ■he affidavit also alleges" that the plaintiff learned from the deBndants that the firm consisted of Philip and Louis Nast and was Borth from twenty to forty thousand dollars, most of which had wen contributed by Philip; that he was afterwards informed Bat Philip had withdrawn from the firm before the sale by the Baintiffs, and that the other members had little or no property B secure the plaintiffs. It also stated that during six weeks ■fore the affidavit the defendants had shipped various boxes of Bxods, weighing in all 4,000 pounds, to relatives in different parts of the state, and were thus disposing of and secreting their property ; that since the 1st of August the defendants had purchased on credit goods largely in excess of what was required in their business; that deponent’s information was derived from. Walter P. Kellogg, plaintiff’s agent

Kellogg also made an affidavit, sworn to on the 29th day of October, which alleges in substance the shipping within six weeks of 4,000 pounds of goods in packages to relatives. It then alleges the confession of the judgments above mentioned and the making of the chattel mortgage, and that when the goods were purchased from the plaintiffs the defendants were insolvent and knew it, and failed to inform the plaintiffs; that the Citizens’ Bank did not require the confession of the judgment or the making of the mortgage; that on the 28th day of October the defendants received several boxes of goods which they had purchased; that the plaintiffs, through deponent, demanded from the defendants that they deliver to the plaintiffs the goods which had been sold by them to the defendants on credit, and shipped on the 19th day oi October; that they refused to deliver the same; that executions had been issued on all the judgments and the defendants’ property levied upon, which executions were delivered to the sheriff immedi ately, by the defendants, upon the confession of the judgments.

That on the 25th day of October deponent requested the de fendants to secure the plaintiffs’ claim ; they requested time unti October 29th, and stated that all demands would be paid as they matured; that on the 28th day of October the defendants statec to deponent that they would not pay or secure the plaintiffs’ de mand, and refused to do so; that the defendants stored goodi in their cellar, which they would not have done if they were in tended for use in their business; that two of the defendants, Louii and Samuel N. Nast, on the 28th day of October, went twenty miles to confess said judgments and hired the deputy sheriff t< take them that distance; that immediately after tire delivery o the executions they caused goods to be taken to their store whicl they had purchased on credit about the 26th day of October; tho the judgments were confessed to defraud creditors.

Mayer Hoffman, in his affidavit sworn to on the 29th day o October, states that on the 24th of the same month the defendant bought considerable goods in New York.

Irwin Wright, by affidavit sworn to on the same day, states h was in the employ of the defendants, Louis Nast and Samuel IS Nast; that when he would leave the store no goods would b packed, but in the morning he would find goods packed in boxe three feet square, and they would be setit away by a cartman.

The stipulation places the money secured by the attachmer under the control of the court, so that practically the rights c the parties to the moneys are not involved in this appeal; but th learned counsel for the appellant insists that, inasmuch as th attachment is based upon fraud, the defendants have a right to I vindicated from the imputations involved in this charge by se ting aside the attachment, if the affidavits were insufficient, an that the stipulations are no estoppel.

As the facts in each case materially differ, the numerous decisions shed but little light on this controversy. Each case must be disposed of upon its own facts interpreted by the general rule of law on the subject

In White v. Reichert, 14 N. Y. Wk. Dig., 285, it was held that an affidavit made by one partner of a firm stating that a certain sum was due on a contract, together with an affidavit of the other partner stating that the defendant’s stock had decreased at a more rapid rate than could be accounted for by his legitimate business, was sufficient to uphold a warrant of attachment granted on the ground that the defendant was disposing of his property with intent to defraud his creditors, in the absence of opposing affidavits on the part of the defendant.

The above case is quoted with approval and the rule re-affirmed in this department in Frankel v. Hays, 20 N. Y. Wk. Dig., 417. To the same effect in Hamburger v. Moeller, 4 N. Y. State Rep., 447.

The affidavits upon which the attachment was issued show circumstances strongly tending to establish fraud, in the absence of any explanation on the part of the defendants. All the facts were peculiarly within their knowledge, and when, instead of basing the motion to vacate upon affidavits, they saw fit to rest on those upon which the attachment was granted, all legitimate deductions and inferences must be construed against' them.

The large purchases on credit just before the confession of I judgment, and the making of the chattel mortgage; the confession of judgments to a brother; the causing of executions to be issued by the defendants; the distance they traveled to aecomI plish that result; the promise a few days before to pay all obliI gations as they matured, with a change of front as soon as they I had effectually placed the property out of the reach of creditors,, (including a storing of goods in the cellar, and the mysterious and junbusiness-like manner in which goods were boxed and sent away, | in connection with the other circumstances stated in the affidavits, in (the absence of explanations on the part of the defendant, furnishIcogent evidence of intent to defraud. The impression conveyed by Ithe defendants of there being a strong member of the firm, in connection with the subsequent assertion that he had ceased to be apartIner before the plaintiff’s goods were purchased, is also suggestive. Blake v. Siegel, 3 Hun, 397.

A fraudulent disposition of property avoids the credit upon vhick the goods are purchased. Arnold v. Shapiro, 29 Hun, 478.

But in this case it does not appear that the credit had not ex-oired when the attachment was issued. Newton v. Wales, 3 Rob., 153; Jones v. Fowler, 37 How., 104; American Exchange Nat'l Bank v. Voisin, 44 Hun, 85; 7 N. Y. State Rep., 381.

A confession of judgment upon a joint indebtedness by a part of the members of the firm would operate as a fraud upon the partnership creditors. Menagh v. Whitwell, 52 N. Y., 146.

The proof authorized the issuing of the attachment. It is unnecessary to consider the question of estoppel.

The order Appealed from must be affirmed.

Dwight, P. J., concurs; Macomber, J., not sitting.