Court Opinion

ID: 3585646
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:35:42.403476+00
Date Added: 2024-06-11T07:41:47.779275
License: Public Domain

The appellant's counsel states that insolvency alone is not urged as evidence of intention not to pay, for a man may be insolvent, that is, he may owe more than he has assets to pay, and yet honestly expect to tide over and finally make up the deficiency.
We here have insolvency, coupled with a condition of affairs that is unique in the history of business.
Feiock was transacting business on the proceeds of forged paper and renewals of the same which he had discounted at the defendant bank.
When it was discovered that certain of this paper was forged, the bank compelled Feiock to give his demand note for the full amount of his indebtedness, and at once commenced suit on the note, taking judgment under an offer, and *Page 392 
appropriated by sale all the assets of the debtor except certain notes turned over to his wife.
Feiock's indebtedness to the bank was about $25,000. This amount was represented by some $20,000 of forged paper which Feiock destroyed when it was taken up and $4,600 in notes, said to have been genuine, turned over to his wife.
It is conceded that the basis on which Feiock transacted his business was the proceeds of these felonies and that he could only hope to continue in trade so long as he was not discovered.
It also appears that this is the second time he had been compelled to close out business by reason of similar methods, carried on with another Rochester bank.
The defendant bank discovered these forgeries about the 10th of June, 1896, the plaintiffs sold their goods to Feiock in the months of March and May, 1896, and they were taken under the bank's levy.
It is now urged that Feiock, doing business under these conditions, could purchase goods, having an honest intention to pay for them, and that the transaction is free from fraud.
It was stated by counsel on the argument that no case could be found in the books holding that such a purchase of goods was fraudulent.
The statement may be true, as it is quite probable that this is the first time the court has been confronted by such a proposition.
We are of opinion that a man conducting business, the sole basis of which is the floating of forged paper and its renewals in his bank, is in a situation where he cannot entertain the honest intention to pay his debts, and that all his purchases of goods are fraudulent.
PARKER, Ch. J., MARTIN, CULLEN and WERNER, JJ., concur with GRAY, J., for affirmance.
BARTLETT and VANN, JJ., dissent in memorandum.
Judgment affirmed. *Page 393