Case ID: ny-st-rep_35/html/0247-01.html
Source: Caselaw Access Project
Author: {"author": "Brady, J. Daniels, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Herman Cantor, as assignee, etc., Resp’t, v. H. B. Claflin & Co., Impl’d., App’lt.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed December 29, 1890.)
    
    1. Assignment for creditors—Fraud—Charge.
    In November, 1887, S. made a general assignment to plaintiff which is attacked by Claflin & Co. upon the ground that some of the merchandise was obtained of them by S. through fraud. After the court had charged, at defendant’s request, several propositions upon the question of fraud, defendant asked the following charge: “ That if at the time of the purchase S. knew he was so insolvent that he could not pay all his liabilities, including these purchases, then without regard to previous statements made by him, the purchase was a fraud upon Claflin & Co.” Held, properly refused.
    
      2. Same.
    Defendant, also, requested a charge that in case the jury find that S. made a statement to Bradstreet's agency prior to this purchase that was knowingly false, then the purchase of all goods made thereafter on the strength of the statements of the agency can he avoided hy the creditors on the ground of fraud. Held, properly refused, as it did not embrace th e proposition that Olaflin & Oo. relied on the statement believing it to be true.
    3. Same.
    Also that the making of knowingly false statements to a commercial agency with the intention thereby to secure credit in the market is a fraud on the part of the person sufficient in itself to warrant the jury in finding subsequent purchases made on the strength of those statements fraudulent. Held, properly refused, because it was too general and because Olaflin & Co. are not alleged to have relied on the statements.
    Appeal from judgment in favor of the plaintiff, entered upon the verdict of a jury.
    
      S. F. Kneeland, for applt; Blumenstiel & Hirsch, for resp’t.
   Brady, J.

It appears that on the 16th of November, 1887, one Isaac Sickle made a general assignment, without preferences, to the plaintiff, under which he came into possession of a stock of merchandise and other assets belonging to the assignor, including the property involved in this action. On the day following, the sheriff of this county, by virtue of process duly issued, took the property in controversy from the assignee, and a few days after the firm of H. B. Olaflin & Co. brought an action of claim and delivery against the sheriff asserting title to the merchandise in dispute upon the ground that it had been obtained from them by Sickle fraudulently. In that suit the assignee was not made a party; the sheriff alone was the defendant. Thereupon the assignee, under the provisions of § 1709 of the Code, sought to obtain a return of the property, which being refused he brought this action against the coroner and H. B. Glaflin & Co., who had indemnified the former, for the value of the merchandise taken by them.

Upon the trial the defendants sought to establish the charge of fraud already suggested and made some proof on that subject, which, had it not been successfully answered, might have resulted in the establishment of the charge; but Sickle, the assignor, was examined in his own behalf and sought to explain or qualify or disprove the various facts and circumstances bearing upon the averment of fraud against him; and the issue which that charge created was submitted to the jury upon the evidence thus given and received, and with proper and unassailable rules of law by which they were to be governed in the consideration of the facts and circumstances established in the effort to prove the fraudulent conduct, and of the response made to it.

The jury found in favor of the plaintiff. The learned counsel for the appellant complains of the judgment for several reasons, his theories all resting, however, upon the charge of fraudulent design, fraudulent intent, frudulent representation and fraudulent conduct, which, as we have seen, was not sustained by the verdict of the jury.

The learned judge presiding submitted the case to the jury with great clearness and with great fairness, and if any criticism can be justly indulged in upon his charge it must be that it was more favorable to the defendants than they could demand. After having stated in a general way the facts and circumstances distinguishing the defendants’ case and of those in response, upon which the plaintiff insisted that the transactions of Sickle complained of were fair, just and honorable and without fraudulent intent, the learned judge said:

“ If you believe that Mr. Sickle’s proceedings in regard to this matter were upright and honest, fair and honorable, the plaintiff would be entitled to your verdict. If, on the contrary, you conclude from the proofs that these purchases were made with a fraudulent intent existing at the time, an intent not to pay for them, then Mr. Sickle by those purchases acquired no title to the goods, and his assignee, under the general assignment, acquired no title, and Claflin & Co. were justified in reclaiming their property through means of legal proceedings, and under these circumstances the defendants would be entitled to your verdict.”

The learned justice was asked to charge the jury, and so charged, that if they should find that Mr. Sickle at the time of making these purchases, knew that he was absolutely insolvent and could not pay in full for the goods purchased from H. B. Claflin & Co., then the withholding of the fact of that insolvency from H. B. Claflin & Co. was such a fraud as to warrant the maintaining of this defense. And also to charge them, that if they should believe that Sickle knowingly made false and fraudulent statements to the Commercial Agency, that that fact is a fraud which they must take into consideration in their finding in this case; to which the court replied: “Substantially that That is a fact which the jury must take into consideration upon the subject of fraud.”

To this no exception was taken. The defendants’ counsel also asked the court to charge, and the court did charge, that if Mr. Sickle, at the time of the purchase of these goods, so purchased them with the intent to defraud the creditors, H. B. Claflin & Co., out of a portion of the money, that intent being founded on the fact that he hadn’t goods enough to pay his honest debts, then that was a fraud, and they must award a verdict for the defendants.

These requests, thus granted, presented all the elements which, under any circumstances, properly grew out of the evidence and the facts and circumstances which it established, regarded as true, but they do not seem to- have been entirely satisfactory, for the reason that the defendants’ counsel having asked the court to charge the three following requests:

First. That if at the time of the purchase in October, 1887, Mr. Sickle knew that he was so insolvent that he could not pay all his liabilities, including the purchases in question, then without regard to previous statements made by him, the purchase was a fraud upon the rights of H. B. Claflin & Co.

Second. That in case they find that Sickles made a statement to Bradstreet’s prior to this purchase, that was knowingly false, then the purchase of all goods made thereafter on the strength of the statements to the agency can be avoided by the creditors on the ground of fraud.

Third. That the making of knowingly false statements to a commercial agency with the intention thereby to secure credit in the market is a fraud on the part of the person, sufficient in itself to warrant the jury in finding subsequent purchases made on the strength of those statements fraudulent; which were denied and exception taken to each, insists here that he was entitled to them.

The first of these has no support upon the authorities, Morris v. Talcott, 96 N. Y., 100; the second is subject to the criticism, and justly so, particularly when examined with reference to the charge actually made, that it does not embrace the proposition that H. B. Claflin & Co. relied upon the statement believing it to be true and altogether too general, and the same criticism applies to the third request The question involved was, what claim the defendants had arising from the alleged fraud, and not what others might or could do under the circumstances detailed. None of them, therefore, is available to the defendants. So far as they were applicable to the facts and circumstances disclosed by the whole of the testimony, and which the jury were to consider on the question of fraud charged, the conduct of the assignor in its varied legal aspects, his statements, his intention and his insolvency at the time the purchase was made, and the suppression of it, were all.the subject of legal formula and the jury instructed in regard to them as fully, as elaborately and as comprehensively for the defendants as the rules governing such transactions would allow. They have in reality nothing to ■ complain of except the verdict, which may have been a very great disappointment to them, but which nevertheless destroyed all hope of success for them in this action.

The array of facts and circumstances made against the integrity of the assignor as to the purchases complained of was impressive, and if unexplained or not overcome would doubtless have led to results prejudicial to the asserted title of the plaintiff as assignor; but the response made, seems to have been entirely satisfactory to the jury, and they so declared by their verdict.

The investigation of questions of fraud, as said 'in another case decided at this term, is peculiarly within the province of a jury, and unless the verdict is palpably wrong upon the facts it should not be disturbed. The charge of fraud is criminal in its character, and he who assertsi it must sustain it by proof, either direct or circumstantial, as the case may be, and by a reasonable preponderance relating thereto.

The judgment must be affirmed, with costs.

Daniels, J.

The requests to charge which were refused were too broad and not made applicable to the point on which this action depended. By the first of them, the court was asked to charge that if Sickle made a knowingly false statement to Bradstreet’s Agency, then the purchase of all goods made thereafter on the strength of the statements of the agency can be avoided by the creditors on the ground of fraud. This request was not confined to any statement which the evidence in this case related to. But any statement knowingly false was what was mentioned. And it would not follow that a statement falsely made without something indicating its nature, extent or materiality, could be followed with this effect. Neither could it be held to render all purchases afterwards made voidable on the ground of fraud whether made from the defendants or others. The proposition was an abstraction, not sustained, and therefore properly denied. The second request which the court denied was still broader, not confined to statements of this purchaser, but it included all persons purchasing goods after a false statement made to a commercial agency, and that too without qualification as to the nature or materiality of the statement. The court could not with any propriety make the charge. And the exceptions to the refusals are destitute of foundation.

The judgment and order should, therefore, be affirmed.

Van Brunt, P. J., concurs.