Case ID: nys_8/html/0218-01.html
Source: Caselaw Access Project
Author: {"author": "Macomber, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Davis et al. v. Harrington et al.
    
    
      (Supreme Court, General Term, Fifth Department.
    
    December 30, 1889.)
    Assignment for the Benefit of Creditors—Preferences.
    Where a debtor, immediately before executing a general assignment, disposes of the bulk of his property, in fraud of creditors, the two transactions will be considered together, as in violation of Laws N. Y. 1887, c. 503, prohibiting preferences.
    Appeal from special term, Monroe county.
    Action by Benjamin H. Davis and others against James D. Harrington and another, to set aside a general assignment for the benefit of creditors made by defendant Harrington to the defendant Yost, on the ground of fraud. Judgment for plaintiffs, and defendants appealed.
    Argued before Barker, P. J., and Dwight and Macomber, JJ.
    
      Henry M. Hill, for appellants. David Hays, for respondents.
   Macomber, J.

The principal contention in behalf of the appellants is that the findings of the learned trial judge Hos. 6, 7, and 8 are unsupported by the evidence. These findings are, in brief, that shortly previous to the making of the assignment by the defendant Harrington to the defendant Yost, and in preparation thereof, Harrington bought a large quantity of diamonds, which he pledged for money borrowed to various persons at much less than their value; that Harrington also, just before making the assignment, disposed of large quantities of his stock of goods to one Myers, in payment of a pretended but fictitious debt from Harrington to Myers; that the assignment was made by the defendant Harrington, and was received by the defendant Yost, with the intent to hinder, delay, and defraud Harrington’s creditors. In respect to the sixth finding, the argument is that the evidence does not show, as such finding alleges, that in preparation of such assignment Harrington bought, from other persons than the parties to this action, about $7,000 worth of diamonds. This finding, as contained in the printed record, is incorrectly given, the result, doubtless, of careless copying. On examination of the original judgment roll, which we have caused to be produced, it is ascertained that the gross amount of $7,000 includes the purchases from the plaintiff Davis, and is correct. This technical error in the finding, as printed in the case, is wholly unimportant, because, even if it was so contained in the decision as filed, it was not excepted to by the appellants, nor was there any request to the learned judge to find differently upon the testimony. We have made a protracted examination of the printed record, and are not able to say that the learned judge at the trial has failed to follow a clear preponderance of the evidence adduced upon the main questions. A discussion of the evidence in detail Avould require more space than is commonly allotted to an opinion upon appeal from this class of cases. The plaintiffs assumed from the beginning the duty of satisfying the judicial mind, by a fair preponderance of the evidence, though not by demonstration, that fraud on the part of the assignor was designed and was actually perpetrated in his scheme to make large purchases of diamonds, and to realize upon the same such moneys as he could.obtain therefor, and then turn over to his assignee the mere shell of his property. The claim that the assignor cannot be proceeded against by defrauded creditors, for the reason that whatever fraud had been accomplished was not in the assignment, but outside of it and preceding it, thus bringing himself within the imaginary protection of the case of Loos v. Wilkinson, 110 N. Y. 195, 18 N. E. Rep. 99, is not tenable. The defendant Harrington made a voluntary surrender of all of his tangible property, and then resorted to the device of making an assignment for the benefit of creditors, so that his fraud could not be unearthed. This, as we held in the case of Manning v. Beck, 7 N. Y. Supp. 215, was a fraud upon the act, (chapter 503, Laws 1887,) and could be defeated by judgment creditors. The evidence before us establishes, with reasonable certainty, the assignor’s fraudulent intent at the time of making the assignment. The well-ascertained facts established at the trial are inconsistent with an honest intent on the part of the debtor to devote his property at the time of the assignment to a fair distribution among his honest creditors. The acts immediately preceding and necessarily leading up to the assignment are inseparable from the execution of the assignment itself, and must be deemed a part of the general fraudulent purpose of the' assignor. The judgment appealed from should be affirmed, with costs. All concur.