Case ID: nys_15/html/0900-01.html
Source: Caselaw Access Project
Author: {"author": "Daniels, J. Ingraham, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ladew et al. v. Hudson River Boot & Shoe Manuf’g Co.
    
      (Supreme Court, General Term, First Department.
    
    October 16, 1891.)
    Attachment—Fraudulent Conveyance—Sufficiency of Affidavit.
    .An affidavit in attachment proceedings alleging a fraudulent disposition of its property by defendant, which shows no other fact in support of the charge than that defendant, an insolvent corporation, had transferred all of its property for the purpose of Raising money to pay its debts, is insufficient to justify an attachment issued thereon.
    Appeal from special term, Ff.ew York county.
    Action by Edward R. Ladew and Joseph II. Ladew against the Hudson River Boot & Slice Manufacturing Company. From an order denying a motion to vacate an attachment, William M. Ketcliam, who had been appointed a temporary receiver of defendant’s property, appeals.
    Argued before Van Brunt, P. J., and Ingraham and Daniels, JJ.
    
      Hastings & Gleason, (George S. Hastings, of counsel,) for appellant. Martin & Smith, (Geo. A. Strong, of counsel,) for respondents.
   Daniels, J.

The attachment was issued on the ground that the defendant had assigned, disposed of, and secreted, and was about to assign, dispose of, and secrete, property with intent to defraud its creditors. The attachment was issued on the 23d clay of July, 1891, and the temporary receiver of its property was appointed on the 29th of the same month, in a proceeding for the voluntary dissolution of the corporation. The charge that the company had or was about to dispose of its property to defraud its creditors depended on the facts that, within a week prior to the issuing of the attachment, its president represented to one of the plaintiffs that “it had, at its store in the city of New York, merchandise of the value of twenty-five thousand dollars; that attachments were issued against it in the city court, because of its residence in Dutchess county, on the 22d day of the month; and the sheriff had been prevented from serving the attachments by the statement that the merchandise in the store had all been sold to A. J. Bates, who then claimed to be its owner.” It was also stated in another affidavit that the attorney of the company had admitted that it had transferred all its property in the city of New York to A. J. Bates for the purpose of raising money. And it was on these facts that the averment was made that the company had disposed of, or was about to dispose of, or secrete, its properly, to defraud its creditors. But it is quite clear that the facts disclosed do not support the inference which the plaintiffs endeavored to deduce from them. The sale to Bates was not shown to be dishonest or fraudulent, or for a consideration in any respect inadequate. • It was to raise money, and the company was at liberty to make the sale for that object. Even if the company was insolvent, as it may be inferred it was from the proceedings taken to secure its voluntary dissolution, it still had the right to sell its property to raise money, which is, in fact, all that it was made to appear that it had done. The conclusion sworn to, that the sale was induced by a fraudulent intent, can only support an attachment when it appears to be warranted by the facts; and the sale mentioned did not warrant it. There was, on the contrary, nothing to indicate that the sale was fraudulent, or made for any other than a lawful object. Fraud is never to be presumed, in the absence of facts supporting the presumption that it exists; and, when its existence is asserted, that assertion must be supported by the facts, before a case on that ground will be made for an attachment. Stow v. Stacy, (Sup.) 9 N. Y. Supp. 1; Bennett v. Edwards, 27 Hun, 352. The evidence to establish a fraudulent intent in the sale of the merchandise wholly failed to prove it; and the order should be reversed, with $10 costs and the disbursements, and the attachment set aside.

Ingraham, J.,

(concurring.) The fraudulent disposition of property must appear from the affidavits upon which the attachment was granted, and we cannot consider on the appeal from this order the proceedings to dissolve the corporation commenced after the attachment was granted. The fact that the defendant had sold its property to Bates, for the purpose of raising money, did not, of itself, justify an inference of fraudulent intent. There is nothing to show what was paid by Bates for the property, or that the amount paid by him was not properly applied by the defendants. I concur, therefore, in reversing the order and vacating the attachment.

Van Brunt, P. J., concurs in result.