Case Name: Clark vs. Wise and Horton
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1870-04-05
Citations: 57 Barb. 416
Docket Number: 
Parties: Clark vs. Wise and Horton.
Judges: 
Reporter: Barbour's Supreme Court Reports
Volume: 57
Pages: 416–420

Head Matter:
Clark vs. Wise and Horton.
In deciding cases submitted under section 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. Morgan, J., dissented.
Cases may arise in which a sale, by an insolvent debtor, of all 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; the necessary effect of it being to hinder and delay creditors.
THIS was a case submitted to the court, without action, under section 372 of the Code of Procedure.
The defendant Peter A. Wise, manufacturer of hay elevators and forks at Stockbridge, H. 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 to 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 $1000. 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. Bisley, for the plaintiff.
Irving G. Vann, for the defendants.

Opinion:
Mullin, J.
In deciding cases submitted under section 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 all 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 o.f 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 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 sales 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 v. Shapely, cited by the 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 31st and 34th N. T. Beports merely hold that the question of fraud, in such cases, is one of fact for the jury, and not of law for the court. ¡Neither holds that if ti^e jury, on the evidence, had found the sale fraudulent, the finding 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.
Doolittle, J., concurred.