Court Opinion

ID: 3610610
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:54:52.113809+00
Date Added: 2024-06-11T14:24:08.203533
License: Public Domain

Assuming that this court has the power to review the merits of the order upon the facts, as I think it has, after a careful examination of all the facts, I am not satisfied that the defendant at the time he purchased the malt had an existing intention not to pay for it.
When no representations are made, and no acts or devices resorted to, to deceive the vendor, the circumstances should point with great clearness to a want of good faith, to justify a finding of a corrupt intent. In this case it is conceded, that no representations, acts or devices were resorted to, and, in addition to this, it appears that the defendant was solicited to purchase the property, and urged to increase the amount beyond what he at first desired to purchase. It also appears that the property was purchased upon the usual terms, and was needed for use in the defendant's brewery, and although the quantity was somewhat large it was not an unusual quantity *Page 8 
to purchase, and from the fact that it would stock the brewery but two months, we can see that it was not an improper quantity to purchase. The circumstances attending the sale do not furnish any evidence of bad faith, and they go far in repelling any suspicion of an improper intent.
It is said that his pecuniary condition was so embarrassing that he must have known that he could not continue in business, and could not pay for the barley. To my mind the facts fall far short of establishing this conclusion. The debt to his wife of about $75,000, was considerably more than to all others, and so long as he continued in business, we may presume that he had no fear of interference from her. Of his other debts amounting in all to about $55,000, it is true, that two of them, one for $12,000, and one of $3,000, had been sued and defences had been put in, and one of about $1,800 was about being sued. As to the balance it does not appear that he was crowded, nor but that he could meet them at maturity. The action for $12,000 was in demands incurred by an English firm, of which he had been a member, and if his evidence is to be believed, he supposed until the eleventh of January, after the purchase, that he had a good defence. The defence in substance was that the action was prosecuted by a nominal plaintiff, but really for the benefit of his former partner in England, and that such partner was indebted to him in the sum of $19,000, and the defendant says, that not until the eleventh of January, when he examined the evidence taken on commission in England, did he ascertain that his defence could not be sustained, and also that his demand for $19,000 was not then available. And he also states that notwithstanding this disappointment, he believed he could still continue in business, and on the fourteenth he borrowed $9,000 of his brother, and $4,500 upon 5,000 bushels of the malt purchased which he used in his business, but that his illness became so severe that he was unable to do business and became discouraged, and on the eighteenth sold out.
If these statements are true, and they are neither incredible *Page 9 
nor improbable, the allegation that he must have known that he could not continue in business when he purchased the malt, which was about the twenty-third of December, has very little foundation. A prosperous business of $200,000 for the past year, the obligations incident to which to that amount had been promptly met, would not, ordinarily, be closed by a judgment of $3,000, nor even by judgments of $15,000. It would not require an over sanguine man to attempt to overcome such an amount of pressing demands, so, that aside from the supposed alleged defence to $12,000, it is very far from clear that the defendant did not believe, on the twenty-third of December that he would be able to weather the storm. Many a business man has bridged over a worse situation than that with a business apparently so prosperous. The proximity of events, the purchase of the malt, and the failure and final selling out is a circumstance entitled to consideration upon the point, but it is not conclusive nor inconsistent with a purchase in good faith. Every failure has its accumulation of embarrassments and its final culmination, but the explanation of the defendant is not unreasonable; he may have struggled on in the belief that he could go through; and the increasing illness which incapacitated him from doing business, may have rendered the failure inevitable. In Nichols v.Pinner (18 N.Y., 295) PRATT, J., held, that upon a question of fraudulent purchase, in April, the fact that the purchaser made an assignment of all his property for the benefit of creditors, in August, did not tend to prove that he did not intend to pay for the property purchased; and, although the case was decided upon another point, there was no dissent from this position. In this case the intervening time was nearly a month, and the fact is far from being decisive under the circumstances developed. A person embarrassed often struggles along in the hope of being able to continue business, under very adverse circumstances, and if he finally fails it would be a harsh judgment to attribute to him, during this period of uncertainty and perhaps delusive hope, a fraudulent intent in transacting his business and in buying *Page 10 
and selling in the ordinary way. Nor is the circumstance that the sale of the personal property was made to the wife, and the consideration applied upon her debt, decisive. The continuance of the business was important to its success. A temporary suspension would have been fatal, without benefiting any one; the price paid by the wife for the property was its full value; nothing appears to impeach her position as a bona fide creditor. While her husband was doing business she was, doubtless, a lenient creditor, but she had the same legal right to purchase this property as any other creditor. A wife, as a bona fide creditor of her husband, occupies the same legal position as any other creditor. In this case she owned the real estate and purchased the personal property, subject to the mortgage of $9,000, and the affidavits state, paid its full value, and more than any one else would pay for it. The fact that the sale was made to the wife instead of another, is of slight moment upon the question of original fraudulent intent. As to the sale of 5,000 bushels of the malt purchased to the wife, the sale was not made until the eighth of February, and then was made subject to the loan upon it of $4,500, leaving only $1,100 purchase-money. As a matter of equity, considering the recent purchase, this balance of $1,100 might have been paid to the plaintiffs. The defendant might have done this; and, as it was the avails of the identical property purchased, perhaps a nice sense of honor would have caused this application of it. But the question is not whether the actual disposition made was the most just or equitable, but what should be its effect in establishing an original fraudulent intent. It was a legal sale and is not controlling upon the point. The fact is as consistent with innocence as guilt in the original purchase. On the whole, I think the plaintiff failed to establish so clear a case of fraudulent intent in purchasing the property as the law requires, especially in a case where no representations were made, and no acts or devices resorted to by the defendant, and when the property was not purchased until after repeated and urgent solicitation, and was needed in the prosecution of defendant's business. The *Page 11 
defendant may have been over sanguine and too hopeful, and may have indulged in delusive expectations. In the language of PRATT, J., in 18 New York (supra), "This is an every-day experience in the commercial world, and it would be hard, indeed, if the unfortunate victim of hopes, that looked to him at the time as reasonable, must, in his misfortunes, be judged by the actual instead of the possible results." It is a circumstance in the defendant's favor, not conclusive, but competent to be considered, that he and his wife, his son, who was conversant with the business, and his book-keeper, testify that, at the time this malt was purchased, the defendant expected to go on with business, and they believed that he could do so successfully, and could pay for the malt and all other obligations, and the broker who sold the malt states that he believes the defendant made the purchase in good faith, intending to pay for it.
The order of the General and Special Term should be reversed, and the motion to vacate the order of arrest granted.
All concur for affirmance, except CHURCH, Ch. J., ANDREWS and EARL, JJ., dissenting.
Order affirmed.