Case Name: DETMER WOOLEN CO. v. VAN HORN
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1908-05-15
Citations: 110 N.Y.S. 312
Docket Number: 
Parties: DETMER WOOLEN CO. v. VAN HORN.
Judges: 
Reporter: West's New York Supplement
Volume: 110
Pages: 312–314

Head Matter:
DETMER WOOLEN CO. v. VAN HORN.
(Supreme Court, Appellate Term.
May 15, 1908.)
Partnership—Purchase of Firm Business—Assumption of Debts.
Where defendant purchased a tailoring business and stock of goods from a firm agreeing to assume all the firm’s indebtedness, the right of a creditor of the firm to recover on defendant’s promise was subject to the equities between the original parties to the contract, and, in an action by such creditor, evidence that a considerable part of the goods had not been transferred to defendant, together with evidence of a failure of consideration for the promise, was admissible, although defendant had entered into possession of and continued the business so transferred for about a year, and bad compromised with all the firm's creditors except plaintiff.
Appeal from Municipal Court, Borough of Manhattan, Fourth District.
Action by the Detmer Woolen Company against Herbert F. Van Horn. From a judgment for plaintiff, defendant appeals.
Reversed.
Argued before GILDERSBEEVE, P. J., and GIEGERICH and GREENBAUM, JJ.
Reno R. Billington, for appellant.
Samuel Hoffman, for respondent.

Opinion:
GIEGERICH, J.
Gilmartin & Dewell, by an instrument in writing dated July 21, 1906, transferred to the defendant their tailoring establishment, "together with all the stock of goods belonging to said firm wherever situated, and all accounts now due or to grow due to said firm, together with the good will of said business," in consideration of which transfer the defendant assumed all the indebtedness of that firm. The plaintiff seeks to recover Upon such assumption agreement on the defendant's part. The defense is a failure of' consideration. Upon the trial, the defendant attempted to prove that a considerable part of the stock of goods belonging to the firm had not been transferred, but had, in fact, been appropriated by one of the members of said firm, "but such evidence, as well as all testimony tending to show a failure of consideration of the promise in suit, was excluded upon the objection of the plaintiff, and the defendant duly excepted. The plaintiff's right to recover upon the promise in question is subject to the equities between the original parties thereto (Merrill v. Green, 55 N. Y. 270; Hinman v. Bowen, 3 Hun, 192; Dunning v. Leavitt, 85 N. Y. 30, 39 Am. Rep. 617; Wheat v. Rice, 97 N. Y. 296; Loeb v. Willis, 100 N. Y. 231, 3 N. E. 177; Arnold v. Nichols, 64 N. Y. 117; 7 Am. & Eng. Enc. Law [2d Ed.] 109), and it was therefore the defendant's right to prove, if he could, either an entire or partial failure of consideration for such promise (Hinman v. Bowen, supra; Dunning v. Leavitt, supra; Loeb v. Willis, supra; 6 Am. & Eng. Enc. Law [2d Ed.] 792, 795).
It is urged by the plaintiff that the defendant got all he bargained for by the bill of sale; but this court in November, 1907, in construing this instrument upon the facts then before it, held otherwise. Gilmartin v. Van Horn (Sup.) 107 N. Y. Supp. 131.
Another point advanced by the plaintiff is that the defendant entered into possession of and continued the business so transferred for about one year and compromised with all the firm's creditors, except the plaintiff, and that consequently it is too late now to assert that some of the firm's property was not turned over to him; but, under the rule above stated, the facts which the defendant sought to establish, if true, tended to show that the defendant had, to some extent at least, a defense to the plaintiff's action.
It was therefore error to exclude the evidence upon the points referred to; and the judgment should therefore be reversed and a new trial ordered, with costs to the appellant to abide the event.
GILDERSLEEVE, P. J., concurs.