Case Name: Edward R. Ladew et al., Resp'ts, v. The Hudson River Boot & Shoe Manufacturing Co., Def't
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1891-10-16
Citations: 40 N.Y. St. Rep. 725
Docket Number: 
Parties: Edward R. Ladew et al., Resp’ts, v. The Hudson River Boot & Shoe Manufacturing Co., Def't
Judges: 
Reporter: New York State Reporter
Volume: 40
Pages: 725–727

Head Matter:
Edward R. Ladew et al., Resp’ts, v. The Hudson River Boot & Shoe Manufacturing Co., Def't
(Supreme Court, General Term, First Department,
Filed October 16, 1891.)
Attachment—Fraud.
The mere fact that a corporation is insolvent and sells all of its property for the purpose bf raising money is not sufficient to authorize an attachment on the ground that it has disposed of, etc., its property to defraud its creditors.
Appeal taken .by the temporary receiver of the company from an order denying a motion to vacate an attachment
Geo. S. Hastings, for app’lt; Geo. A. Strong, for resp’ts.

Opinion:
Daniels, J.
The attachment was issued on the ground that the defendant had assigned, disposed of and secreted, and was about to assign, dispose of and secrete property with intent to defraud its creditors. The attachment was issued on the 23d day of July, 1891. And the temporary receiver of its property was appointed on the 29th of the same month, in a proceeding for the voluntary dissolution of the corporation.
The charge that the company had, or was about to, dispose of its property to defraud' its creditors, depended on the facts that within a week prior to the issuing of the attachment its president represented to one of the plaintiffs that " it had at its store in the city of New York merchandise of the value of $25,000, that attachments were issued against it in the city court because of its residence in Dutchess county, on the twenty-second day of the month, and the sheriff had been prevented from serving the attachments by the statement that the merchandise in the store had all been sold to J. A. Bates, who then claimed to be its owner. It was also stated in another affidavit that the attorney of the company-had admitted that it had transferred all its property in the city of New York to J. A. Bates for the purpose of raising money. And it was on these facts that the averment was made that the company had disposed of, or was about to dispose of, or secrete its property to defraud its creditors.
But it is quite clear that the facts disclosed do not support the inference which the plaintiffs endeavored to deduce from them. The sale to Bates was not shown to be dishonest or fraudulent, or for a consideration in any respect inadequate. It was to raise money, and the company was at liberty to make the sale for that object. Even if the cov.pany was insolvent, as it may be inferred it was from the proceedings taken to secure its voluntary dissolution, it still had the right to sell its property to raise money, which is, in fact, all that it was made to appear that it had done. The conclusion sworn to, that the sale was induced by a fraudulent intent, can only support an attachment when it appears to be warranted by the facts. And the sale mentioned did not warrant it There was, on the contrary, nothing to indicate that the sale was fraudulent, or made for any other than a' lawful object. Fraud is never to be presumed in the absence of facts supporting the presumption that it exists; and when its existence is asserted, that assertion must be supported by the facts before a case on that ground will be made for an attachment Stow v. Stacy, 9 N. Y. Supp., 1; 30 N. Y. State Rep., 308; Bennett v. Edwards, 27 Hun, 352. The evidence to establish a fraudulent intent in the sale of the merchandise wholly failed to prove it And the order should be reversed, with ten dollars costs and the disbursements, and the attachment set aside.
Ingraham, J.
The fraudulent disposition of property must appear from the affidavits upon which the attachment was granted, and we cannot consider on the appeal from this order the proceedings to dissolve the corporation commenced after the attachment was granted. The fact that the defendant had sold its property to Bates for the purpose of raising money did not of itself justify an inference of fraudulent intent.
There is nothing to show what was paid by Bates for the property, or that the amount paid by him was not properly applied by the defendants. I concur, therefore, in reversing the order and vacating the attachment.
Van Brunt, P. J., concurs in result