Case Name: The Victoria Paper Mills Co., Respondent, v. The New York & Pennsylvania Co., Appellant
Court: New York City Court
Jurisdiction: New York
Decision Date: 1899-04
Citations: 27 Misc. 179
Docket Number: 
Parties: The Victoria Paper Mills Co., Respondent, v. The New York & Pennsylvania Co., Appellant.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 27
Pages: 179–180

Head Matter:
The Victoria Paper Mills Co., Respondent, v. The New York & Pennsylvania Co., Appellant.
(City Court of New York, General Term,
April, 1899.)
Sales — Bona fide purchaser — Fraud.
Where goods have been obtained by fraud, a transferee which has paid for them only an antecedent debt and. $50, not paid for the value of the goods but merely in order to protect the sale from attack, is not a tona fide purchaser and the defrauded vendor may recover the goods.
Appeal from a judgment in favor of plaintiff.
James H. Fay (Georgé Walter Green, of counsel), for appellant.
Joseph A. Arnold, for respondent.

Opinion:
Fitzsimons, Ch. J.
We think that the evidence shows a sale and delivery of the goods in question to Cashriel & Co., and, by that firm, a delivery of said goods to the defendant. We also think that the evidence shows- that the sale of the plaintiff to Oashriel & Co. was induced by fraudulent representations made by said'firm to the plaintiff and that such sale was duly rescinded. .
Thé only consideration advanced by the defendant upon the sale to it of said- goods, was an antecedent indebtedness,- amounting to about $1,600, and $50 paid at the time of the sale.
In view of the fact that Oashriel & Co. obtained the goods by. fraud from the plaintiff the duty rested upon the defendant to establish that- it was a bona fide, purchaser. 79 N. Y. 254.
The transfer to it by said fraudulent purchaser as,security for, or in payment of, an antecedent debt, does not make it a bona fide purchaser so as to enable it to hold the goods against the original vendor (79 N. Y. 254), nor does the payment of the $50 mentioned make it a bona fide purchaser, because the testimony of the defendant's main witness, a Mr. Sloat, shows that, said $50 was, not advanced for the purpose of purchasing said, goods or to pay value for the same; but was paid for the. purpose (as. he- testified), of-making the salé absolutely valid against any. person who -might claim the goods mentioned ih the bill of! sale to the defendant.
It WáSj -as he further testified, suggested by the-lawyers engaged! in the .transaction, that'such further consideration should be made so that there might be no question as to the validity, of thé bill qf sale. Also that the lawyers stated that there might be á question as to the validity of said bill of sale if there was only the pre-existing debt to maintain it as- a. consideration, and that unless, the new consideration ($50) was given,, the transfer might be questioned.
This testimony shows that the defendant-- regarded the sale to it as a questionable transaction. The new consideration was not advanced for the purpose of paying, as before stated, a considerar tiófi for the. goods, or for the purpose of becoming an honest purchaser, thereof, but Was clearly intended as a legal, guard against the claim of any person, situated like, the plaintiff, who was induced to sell goods to Oashriel & Co. by fraudulent representations. Under the circumstances we think that it cannot be claimed by -the defendant that it was an innocent and honest purchaser in good faith, and the payment of said $50, in our judgment, does not make it so. This precaution used by it shows that it Was. not a bona fide purchaser. •
The judgment must be affirmed, with costs*'
McOasthy and Hascall, JJ., concur.
Judgment affirmed, with costs.