Case Name: Erastus W. Clark agt. Peter A. Wise and Henry Horton
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1870-04-07
Citations: 39 How. Pr. 97
Docket Number: 
Parties: Erastus W. Clark agt. Peter A. Wise and Henry Horton.
Judges: 
Reporter: Howard's Practice Reports
Volume: 39
Pages: 97–101

Head Matter:
SUPREME COURT.
Erastus W. Clark agt. Peter A. Wise and Henry Horton.
In deciding cases submitted under § 372 of the Oode, the court is to draw from the facts stated, such conclusions as a jury would be warranted in drawing, if the case was on trial before them. ( Morgan. J., dissenting.—Holding that the submission under this section should present only questions of laxo; xmd xuhere the submission involves simply a question of fact, the court is not authorized to decide it.) '
There may be cases in which a sale by an insolvent debtor, of all his property, real and personal, may not be fraudulent. But; as a general proposition, such a sale to a purchaser, cognizant of the vendor's insolvency, is fraudulent, as the necessary effect of it is to hinder and delay creditors.
Decided at the general term of the Fifth Judicial District, April 7th, 1870.
Mullin, Morgan and Doolittle, Justices.
Case submitted under § 372 of the Code of Procedure.
The defendant, Peter A. Wise, a manufacturer of hay elevators and forks at Stockbridge, N. Y., having become insolvent and unable to pay his debts, sold all his stock in trade and real estate and personal property, except such as is exempt from execution, to the defendant Henry Horton, for the consideration of $10,962.21, that being its full value. Horton was liable, as first indorser on two of Wise’s notes, for $892.53. In the transaction, Wise handed over $859 in money, to enable Horton to pay the notes, and Horton, after deducting the amount of his indorsement, gave back Wise his own notes for the remainder of the purchase price; one third payable in six months, one third in twelve months, and the residue in eighteen months, without interest. The real estate amounted in value to $1,000. Horton’s notes were perfectly good, and it was admitted that he had no actual intent on his own part to defraud the creditors of Wise.
This sale was on the 20th day of July, 1869, and on the 6th day of August, 1869, the plaintiff, Erastus W. Clark, obtained a judgment against Wise,'in the supreme court, for $369.02, upon a cause of action which,accrued May 5th, 1869, and upon which an execution was duly issued and returned wholly unsatisfied. Horton knew of Wise’s insolvency when he made the purchase. It was also admitted that Wise afterwards fraudulently concealed and misappropriated a portion of the notes to his own use. The question submitted was whether the sale by Wise was fraudulent and void as against the plaintiff and the other creditors of Wise-, .within the meaning of the statute.
Edwin T. Risley, for the plaintiff,
Irving G-. Vann, for the defendants.

Opinion:
By the court, Mullin, J.
In deciding cases submitted mnder § 372 of the Code, the court is to draw from the facts (Stated, such conclusions as a jury would be warranted in < drawing, if the case was on trial before them.
(Cases may arise in which a sale by an insolvent debtor of call his property, upon credit, may not be fraudulent. But, as a general proposition, such a sale, to a purchaser cognizant of the vendor's insolvency, is fraudulent, as the necessary- effect of it is to hinder and delay creditors.
If a failing debtor may sell on a credit of one, two, or three years, why not on a credit of four, six or eight years?
Who "is to say that the one term of credit is honest and' fair, and the other fraudulent. Who shall draw the line between sales on credit that do, and such as do not, hinder and delay creditors.
If any term of credit is allowed, the parties must in every case go before a court and jury, in order to have its validity determined. Aside altogether from authority, the public interest is promoted by declaring all such fraudulent.
There seems to be a conflict of opinion in the supreme court on the question. But I think the weight of authority in that court is against the validity of such sales.
It would seem that the court of appeals have decided the very question in Mott agt. Shapley, cited by plaintiff's counsel. If that case holds, as it is said by counsel that it does, it is decisive of the question.
The cases in the 31 and 34 N. T., merely hold that the question of frand, in such cases, is one of fact for the jury, and not of law for the court. Neither holds that if the jury on the evidence, had found the sale fraudulent, it would have been disturbed by the court.
The plaintiff should have judgment declaring the sale fraudulent, appointing a receiver, and for payment of the judgment from the proceeds of the goods