Case Name: TOWNSEND a. BOGART
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1860-02
Citations: 11 Abb. Pr. 355
Docket Number: 
Parties: TOWNSEND a. BOGART.
Judges: 
Reporter: Abbott's Practice Reports
Volume: 11
Pages: 355–370

Head Matter:
TOWNSEND a. BOGART.
New York Superior Court;
General Term, February, 1860.
Abbest.—Liability oe Paethers. .
In an action in the nature of an action on the case against partners, for obtaining goods from plaintiffs by fraud, a partner who did not participate personally in the fraud, is liable to arrest as well as those who did.
If the affidavits show such a cause of action, it is not to be inferred that the complaint will not state a cause of action of that nature, because the affidavits allege that the action is brought to recover the price of goods sold.
In an action against partners, to recover a debt of the copartnership, in contracting which some of the partners were guilty of a fraud, all the partners are liable to arrest.* Woodruei? and Bobebtson, JJ., dissented.
What facts will raise a presumption that a partner was cognizant of, and assenting to fraud committed by his copartners.
Appeal from order made at special term, denying motion to vacate order of arrest.
This action was brought against the three defendants, Bogart, Jefferis & Jackson, to recover for goods obtained from the plaintiffs upon fraudulent representations. Plaintiffs obtained an order of arrest upon affidavits which alleged that the action was brought to recover the price of certain goods, describing them, sold and delivered by the plaintiffs to the defendants on a day and for a price specified, the price whereof became, by the terms of sale, payable thirty days from the time of sale, but that defendants had not paid any part of it; that defendants compose the firm of Bogart, Jefferis & Co., and have been heretofore, and now profess to be engaged in the auction business ; that they occupied a spacious store on Broadway, and by conspicuous signs invited the confidence of the business community.
The affidavit then,set forth that on July 2, 1859, defendant Jefferis came to plaintiffs’ store and asked the price of Pennsylvania Knitting Company’s shirts and drawers; that he represented that they had a customer who would buy three hundred dozen of such goods. The plaintiffs refused to sell goods to be sold by defendants at auction, and Jefferis assured them they did not wish them to sell at auction, but had a customer who stood ready to take them at a price named. Upon the faith of these representations plaintiffs sold the goods, and delivered them to defendants.
When the bill became due it was not paid, and on several successive occasions one of the plaintiffs called at defendants’ place of business, and on each occasion Jefferis promised that they would make payment in a short time, but they did not do so. On one of these occasions Jefferis being asked whom the goods were sold to, said he could tell, but it would not do any good. He was responsible, but was not known. On further inquiry he acknowledged that he had sent the goods to Baltimore, to one Byerly. He said they were sold on credit, and he would try to get the buyer’s note for plaintiffs. Upon this promise plaintiffs gave further forbearance.
This promise being broken, Jefferis subsequently promised to pay cash, and when one of the plaintiffs accordingly called at defendants’ place of business, when he saw both Jefferis and Jackson, who both gave him to understand that they had been disappointed in remittances, and Jackson said that he would bring the money to the plaintiffs’ store on a specified day, and if it was not paid by that time they would take means to collect, adding that he would then explain why it was not paid before. On subsequent occasions Jackson assured, them that the money was perfectly safe, and there was no need of suing. In answer to an inquiry whether the goods which he had said were sold to Byerly, of Baltimore, were disposed of, Jackson said he did not know whether they were sold outright or not, or whether they could be got back or not, as Jefferis had managed the matter pretty much; and he then called Jefferis in to answer. In answer to the inquiry whether plaintiffs could get the goods back, Jefferis shook his head without saying any thing, and in answer to the question whether they were sold to Byerly, he said they were partly sold and partly not. In answer to an inquiry as to defendants’ solvency, he said they relied upon having every cent of their money. He said he could explain his transaction if he chose, but it would do no good. The affidavit also alleged, on information and belief, that the goods were not sold to Byerly.
The affidavits further stated a very similar transaction by the defendants with the house of Britton & Co. at about the same time, in which transaction Jefferis and Jackson were the actors.
On the plaintiffs’ affidavits, the defendant Bogart movéd to vacate the order of arrest as against himself.
The motion was denied at special term, and the defendant appealed.
Wm. H. Scott, for the appellant.
I. The affidavits upon which the order of arrest was granted, not only failed to show a cause of arrest, but do not even make out a cause of action against the defendant Bogart. 1. The only cause of action set forth in the affidavits is one against the firm of Bogart, Jefferis & Co., on an alleged purchase of goods by the firm. 2. Ho personal participation by the defendant Bogart in the purchase in question is alleged in the affidavits; on the contrary, his individual name is not mentioned in the affidavits in connection, either with the purchase or with any of the subsequent matters alleged therein. 3. The only ground, therefore, upon which the defendant Bogart can be held liable, in any manner, upon the purchase in question, is that of direct and expressed, or implied and constructive authority on the part of the defendants, Jet- fens and Jackson, to bring him thereby. 4. There is nothing in the affidavits showing that Bogart in any manner expressly authorized, or was even cognizant of, the purchase at the time it was made, or at any time after. 5. Bor is any constructive authority on his part shown as to the purchase by the allegation as to partnership. The partnership alleged was for the prosecution of the “ auction” business. The legitimate scope and object of the auction business is to sell for others, and not to purchase on individual account. The action being against the defendants upon a firm, and not an individual, purchase; and the only ground upon which the defendant Bogart can be held liable, being that of constructive or partnership authorization thereof, it must appear affirmatively by the affidavits, that the purchase was within the legitimate scope and object of the firm-business. Instead of which it not only appears that the purchase was not within the scope of the business of the firm, but that the plaintiffs were fully cognizant of the nature of that business.
II. But conceding that the affidavits disclose a cause of action, they still fail to show a cause of arrest against the defendant Bogart. 1. The arrest being founded, not upon the mere liability upon the purchase, but upon the fraudulent representations alleged in the affidavit, the defendant Bogart was not liable to arrest, even admitting that he participated in, and was bound by the purchase as a partner, if he did not also participate either directly or by adoption in the fraud of his copartners. 2. There is nothing in the affidavits showing that Bogart, even conceding his knowledge of the purchase, either made, or authorized, or was cognizant of a single one of the representations alleged in the affidavits; on the contrary, his name is not even mentioned in the affidavits in connection with any part of the transaction. 3. Bor can Bogart be held a constructive, if not an actual participant in the fraud by virtue of the partnership merely, there being no implied authority on the part of a partner or other agent to commit a fraud on behalf of his partner or principal, or to bind such partner or principal in any manner thereby. 4. Bor was section 179 of the Code intended to apply to constructive as contra-distinguished from actual fraud. 5. There is nothing in the affidavits showing that Bogart ever adopted the fraud of Jefferis and Jackson in any
way or shape. There is nothing in the affidavits showing that Bogart knew of the fraud practised upon the plaintiffs by the defendants Jefferis and Jackson; or even of the purchase. Nor would adoption of the fraud follow from a knowledge of the purchase, unless accompanied by a knowledge of the fraud. There is nothing in the affidavits showing that the defendants as a firm, or that Bogart as a member of the firm, or otherwise, ever received the goods themselves, or the proceeds thereof, or any benefit therefrom.
John J. Townsend, for the respondents.
I. The appellant admits the truth of all the allegations upon which the order of arrest was granted.
II. The papers clearly show that the defendants were guilty of a fraud in contracting the debt, for the recovery of which this action is brought. It cannot be necessary for the respondent to establish that each one of the three confederates participated actively in each one of the numerous incidents which characterize this fraudulent transaction. It is evident from the whole case, that the defendants purchased these goods with the preconceived design not to pay for them. They used an artifice to deceive and entrap the plaintiffs. They were not merely insolvent, they had no means whatever, or any expectation of any. They shipped the merchandise immediately to Baltimore, and sold or pledged it for half its value. They imposed upon the plaintiffs and the community by the magnificence of their exterior and interior at 157 Broadway. The same fraudulent practices they resorted to with Messrs. Britton & Co. See the affidavits. (Hall a. Naylor, 18 N. Y, 588.)
Compare Anonymous (6 Ante, 319, note); Hanover Co. a. Sheldon (9 Ib., 240); Claflin a. Frank (8 Ib., 412).

Opinion:
By the Court.*—Bosworth, Ch. J.
These goods were sold to the defendants and delivered to them, and the firm has disposed of them. As they were obtained by fraud, an action of trover, or an action on the case for the deceit and fraud, will lie against all, although Bogart, as a matter of fact, was ignorant of the fraud. (Hawkins a. Appleby, 2 Sandf., 421-429 ; Locke a. Stearns, 1 Metc. (Mass.), 560.)
Cary a. Hotailing (1 Hill, 311) is an authority that trover will lie for the value of the goods on such a state of facts as the evidence establishes.
Affidavits establishing such a cause of action, of themselves authorize an order to arrest and hold to bail. (Code, § 179, subd. 1.)
Such a rule as applied to the partner not guilty of actual fraud, is no more severe than the one in force prior to the Code. In an action of trover a defendant was held to bail as a matter of course, without any order of the court-or of a judge authorizing it. (2 Rev. Stat., 3 ed., 48, § 8, subd. 4.)
I do not think that the allegation in Yale's affidavit, that this action is brought to recover the price of goods sold, justifies the inference that the plaintiffs' complaint does or will state merely a contract of sale, a delivery, expiration of the term of credit, and non-payment of the-price; even if it be assumed, or would be true, that in an action in that form, Bogart could not be held to bail for a debt fraudulently contracted by his partners, he not being a party to the fraud.
These affidavits detail the whole transaction, and I find nothing in the allegations referred to inconsistent with a purpose to declare in such form of action as will secure the right to hold all the defendants to bail. ¡Neither the contents of the summons nor those of the complaint are stated; the affidavits show that the price agreed to be paid is the sum sought to be recovered. "
But I think the affidavits should be liberally construed in this respect in favor of the plaintiffs, as they state facts enough to establish a cause of action which of itself gives a right to hold to bail; and as it does not appear that the plaintiffs have not stated or will not state such a cause of action in their complaint, nor that they are precluded by the form of their summons from doing so.
But I am not satisfied that the defendant Bogart cannot rightly be held to bail under subdivision 4 of section 179 of the Oode.
I think all the defendants were guilty of a fraud, within the meaning of that section, in contracting the present obligation.
It is well settled that the fraud of one member- of a firm in obtaining goods which have gone to the firm's use, is, in judg ment of law, the fraud of all, in such sense that an action will lie against all of them for it, and that all are liable for the damages- caused by it.
Bogart, as well as his copartners, contracted the debt; and he, as well as the others, was guilty of a fraud in contracting it, for the purpose of every civil remedy to obtain redress for such fraud (unless he be entitled to exemption from being held to bail for it). In the nature of things, he can claim no other exemption, and the question is, Is that secured to him by the Code?
I cannot understand how it is that, on the same state of facts, the judgment of law is, that in an action based solely on the fraud, and to recover the damages caused by it, it is his fraud; but so far as his liability to be held to bail is concerned, he is guiltless of all fraud, and has neither committed nor assented to it. The Code does not, in terms nor by any fair intendment, make any such distinction.
I think the language, " when the defendant has been guilty of a fraud," must be deemed to have been used in subd. 4, § 179, to designate and include all those who, by settled law upon a given state of facts as to the contracting of debt, are the persons contracting it, and who also have been guilty of fraud in contracting it.
It is under this rule of construction that it has been held that a defendant in an action of orim. con., or for seduction, may be held to bail at the suit of the husband or father, as one who has done an injury "to the person" of the plaintiff. (Code, § 179, subd. 1; 4 How. Pr., 234; 3 Code, 9.)
So long as the law imputes the fraud to him, and for the purposes of the civil remedy of the party defrauded declares it to be his fraud, I think he is as liable to be arrested and held to bail as if he had committed it in intent and in fact. This conclusion finds some analogy in the rule, that although an infant is not liable upon his contracts, yet an action for assumpsit will lie against him for money embezzled, as the court, in furtherance of justice, will look through the form of the action to the tortious nature of the transaction. (1 Esp., 172; 3 Pick., 492; 5 Hill, 391.)
On another view, I think he may rightly be held to bail under subdivision 4. I think these affidavits show enough to justify the inference, that he knew a fraud had been committed, and assented to it.
The affidavit of Britton shows that the goods bought of his firm were sent to the defendants' store, part on the 27th, and the rest on the 28th of July; they were bought for cash, to be paid on delivery of the goods, and that a bill for the price was sent with them, headed, in writing, "prompt cash;" that these goods were sent to Baltimore by the defendants immediately, and an advance of $2,000 obtained on them.
The purchase of the plaintiffs was made, and the goods were delivered, on the 2d July, 25 days prior to the purchase from the Brittons. I think the inference a just one, that Bogart, being a partner, and nominally, the actual head of the firm, knew that these purchases had been made, and that the goods had been disposed of by the firm; that they had not been paid for, and that the firm had no means with which to pay for them, and could have had no intention of paying for them at the time they were bought.
It requires great credulity to believe that he was ignorant of the repeated applications for payment made at the store through a period of six weeks, and did not learn, if he did not know when the goods were bought, that they were procured by fraud.
And I think it a just conclusion, from the affidavits respecting the nature of the business which the defendants professed to transact, and that during this period they were not visibly doing any business in that line, that he was aware of and was expecting gains from the fraudulent operations in which all the other partners are shown to have been actively engaged. Jackson, and Jefferis were both asked on the 20th of September, if the plaintiffs could not in some way get the goods back. Jackson referred to Jefferis to give the answer, and Jefferis " shook his head without saying any thing." He was then asked if the goods were sold to Byerly. He said, "Tes, partly so and partly not." This is some evidence of a demand of the goods and of a refusal to restore them. The effect of that is not doubtful. (Holbrook a. Wright, 24 Wend., 178.)
Bogart does not choose to make any affidavit, or attempt to repel any one inference which would naturally be drawn from the character of these transactions and the fact of his being the head of the firm.
Under any view suggested, I think the defendant Bogart was rightly held to bail.
The fancied severity of such a rule will find a perfect analogy in many other cases.
Common carriers are liable in an action for an injury to the persons of individuals who may be injured by the negligence of their servants. (Bostwick a. Champion, 11 Wend., 571; 18 Ib., 175 ; Cotter a. Bettner, 1 Bosw., 490.)
In such an action the defendant may be held to bail by § 179 of the Code.
Whether the negligence was that of one of the parties only, or is that of a servant hired and paid by one partner only, as in Bostwick a. Champion, all the partners may be held to bail, although in the one case one partner alone did the wrong; and in the other, neither actually did it or assented to it. They, as well as the parties actually guilty, are held to bail, because in law they are all guilty of the wrong, on the same principle and in the same sense that in the present case are all guilty of the fraud practised on the plaintiffs.
I think the order should be affirmed.
Moncrief, J.
In my opinion the arrest can be sustained on the affidavits, as establishing a case of trover and conversion, and that the complaint thus formed would be consistent with the affidavits.
Moreover, a case is presumptively made out of adoption, acquiescence, and participation in the fruits of the fraud. I think a partnership raises of itself such a presumption, and the facts here stated strengthen such presumption.
Hence, without saying that a copartner may not be free from liability to arrest in a plain case of entire innocence, and attempt or disposition to redress the fraud, I am of opinion that the arrest should in this case be sustained and the order affirmed.
Present, Bosworth, Ch. J., and Hoffman, Woodruff, Moncrief, and Robertson, JJ.