Court Opinion

ID: 3624367
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:05:20.707675+00
Date Added: 2024-06-11T11:49:58.142051
License: Public Domain

If the judge was correct in his refusal to dismiss the complaint when requested, he was surely right in his charge to the jury. The whole case turns upon the question whether there was evidence sufficient to be submitted to the jury upon the question of fraudulent intent. It was settled by this court in the case of Nichols v. Pinner (18 N.Y., 300, and23 N.Y., 264), that the mere omission of a purchaser of goods for credit to disclose his insolvency to the vendee was not such a fraud as would avoid the sale: that when no inquiries are made and the vendee makes no false statements, nor resorts to any artifice to mislead the vendor, he may remain silent as to *Page 141 
his pecuniary condition without being guilty of fraud. In this view of the case, Kerr  Co. were not proven guilty of any fraudulent act.
It is, however, equally well settled that if a vendee obtain goods upon credit with a preconceived design not to pay for them, such act is fraudulent, and the defrauded party may, on discovering the fraud, repudiate the sale and reclaim the property. In fact, any dishonest intention executed, which produces injury or loss to another, is a fraud.
To establish this fraudulent intent, the plaintiffs proved the insolvency of the vendees at the time of their purchase of the goods in suit: their failure and assignment ten days afterwards: their full knowledge of their insolvency for a long time before their failure: that they were only kept from stopping payment by the daily aid of the defendant; that the assignors on the same day that they purchased from the plaintiffs, also purchased on a credit of four months two other bills of goods, amounting to over $2,000: and that there was a chattel mortgage on their goods to the defendant, which enabled him to close their business at any moment he saw fit. No explanation of these facts was offered by the defendant.
I accede to the proposition of the counsel for the defendant, that fraud must be proved. It can never be presumed, in the absence of all evidence on the subject. Nevertheless, the motive with which an act is done may be, and often is, ascertained and determined by inferences drawn from the proof of facts and circumstances connected with the transaction and the parties to it. KENT says: "a deduction of fraud may be made not only from deceptive assertions and false representations, but from facts, incidents and circumstances: such even as may be trivial in themselves, but in a given case, often decisive of a fraudulent design." In cases where there is no overt act of fraud, it is often very difficult to prove a dishonest purpose. In all such cases, instead of proving false representations or other fraudulent practices, resort is had to various incidents and circumstances which are calculated to exhibit the hidden purposes of the actor's mind. *Page 142 
So in this case: Kerr  Adams were not guilty of any overt act of fraud in the purchase of the goods sought to be recovered: nor did they make any representations one way or the other as to their pecuniary condition, and hence proof was made of their pecuniary situation, the facts and circumstances connected therewith, and their acts and conduct in relation to their other purchases, and as to this purchase, in order to determine the motive and intent with which it was made. This proof shows Kerr 
Adams, at the date of the purchase, badly insolvent: that such fact was well known to themselves: that there was a chattel mortgage of $15,000 on their stock of goods to the defendant, whereby their business could have been closed at any moment: that they had been helped by the defendant, the preferred creditor in the assignment, from day to day, for some time past, to keep them from failure: that they purchased of several persons large bills of goods, the plaintiffs among the rest, just on the eve of suspension: and their final suspension and assignment, transferring the goods thus bought, to the assignee. These facts, in the absence of any explanatory proof, were sufficient to carry the case to the jury and fully justified the court in its refusal to dismiss the complaint.
The charge of the court was entirely unexceptionable. The evidence being sufficient to carry the case to the jury, it was proper to instruct them that if they were satisfied the goods were purchased without any intent to pay for them, but with an intent to defraud the plaintiffs, their verdict should be for the plaintiffs.
All the judges concurring,
Judgment affirmed. *Page 143