Case ID: abb-pr-ns_12/html/0352-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Curtis, J.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

KERN against RACHOW.
    
      New York Superior Court;
    
    
      Special Term, January, 1872.
    Arrest. — Affidavit of Fraudulent Disposal of Property.
    Where a debtor, shortly before the maturity of his indebtedness, sold his property for less than its value.to a relative, to be paid for conditionally, and afterward refused to exhibit his books of account,— Held, that these facts were evidence of a disposal of his property with intent to defraud his creditors.'
    Appeal from an order.
    William Kern and Conrad Homel sued J. Rachow, in the superior court.
    The action was to recover the value of wood mouldings sold by the plaintiff to the defendant, between March 1, 187’0, and January 1, 1871, and for which defendant gave plaintiff his note, dated January 18, 1871, payable three months aftel date. An order of arrest was granted on the ground that the defendant had disposed of his property with intent to defraud his creditors.
    The affidavit, dated May 5, 1871, on which the order of arrest was granted, alleged that plaintiff held defendant’s note, payable April 21, 1871. That defendant, on March 18, 1871, was possessed of -stock in trade, &c., worth two thousand dollars, which he on that day sold to one Holstein, his brother-in-law, who had failed Several times, for five hundred dollars, to be paid on January 1, 1872, if the business was good, and if he was successful therein. That defendant had refused to exhibit his books of account to plaintiffs, although he had been frequently requested to do so. That the note held by plaintiffs had been protested, and no part thereof paid.
    An attachment against the property was also in existence for another debt of some creditor. Defendant moved at special term, on plaintiffs’ affidavits, to have the order of arrest vacated. The motion was granted, and plaintiffs appealed to the general term.
    
      David McAdam, for the plaintiffs, appellants.
    
      Henry Wehle, for the defendant, respondent.
   By the Court.—Curtis, J.

The plaintiff’s affidavit shows, that about one month before the defendant’s note fell due, the defendant sold his stock, business and articles contained in his place of business, which, with the outstanding claims, were worth two thousand dollars, to one Holstein, his brother-in-law, and who had failed several times, for the price of five hundred dollars, payable January 1, 1872, provided the business was good, and he was successful. That the defendant had refused to show his books, or give any satisfactory or full statement of his affairs. That he owes other debts, and that his property has been attached.

The defendant moves to vacate the order of arrest on the plaintiff’s own affidavit, and does not explain or deny any of the matters alleged in the plaintiff’s affidavit. If these allegations are not met by a denial, on a motion to discharge from arrest, they must be taken to be true (Wolfe v. Brower, 5 Pobt., 604; Union Bank v. Mott, 9 Abb. Pr., 108).

When a debtor, shortly' before the maturity of his indebtedness, sells his property for less than its value, to a relative, to be paid for conditionally, under the circumstances., and in the manner charged by' the plaintiffs, and makes no denial or explanation, a case arises where the creditor is entitled to the remedy afforded under subdivision 5 of section 179 of the Code. A contrary view of it would tend to withhold the relief and protection designed by the framers of the law, to be given to creditors, and serve substantially to promote the designs of knavish and fraudulent debtors.

The order appealed from should should be reversed, with costs to the plaintiff. 
      
       Present, McCunn, P. J., Curtis and Sedgwick, JJ.