Court Opinion

ID: 7342878
Source: CourtListenerOpinion
Date Created: 2022-07-26 00:10:34.792938+00
Date Added: 2024-06-11T16:20:16.762940
License: Public Domain

RUMSEY, J.
(dissenting).
I cannot concur in the affirmance of so much of this judgment as charges the Bolton Shoe Company with the value of the assets received by Mrs. Bolton from her husband in 1893. It is an established fact in the case that Herman Behn had *911no notice of the fraud claimed to have been perpetrated by Thomas Bolton upon his creditors by the transfer of his property to his wife until August 19,1893. Before that time he had purchased the assets which had been sold by Sherwood, had formed a partnership with Mrs. Bolton, had assumed liabilities towards her, and had put all his own assets into the firm of the Thomas Bolton Shoe Company. When he received that notice, no actions had been begun against Thomas Bolton by the plaintiffs in the creditors’ suits, and no effort was made by those creditors until November, 1893. So that the Thomas Bolton Shoe Company, winch had bought these assets, had dealt with them until November, 1893, and no effort had been made on the part of the plaintiffs, or any one else, to establish a lien on them, so that they could be applied to the payment of the plaintiffs’ debts. If a lien can be said to be established by the mere commencement of a creditors’ action,—which I do not accede to,—it is quite clear that there was no lien until November, 1893. What was the value of the assets at that time does not appear. The Thomas Bolton Shoe Company dealt with the property until January, 1895. What was the condition of it at that time, how much had been used, how much had become useless, and of what value, does not appear. It went into the hands of the Bolton Shoe Company on the 1st of January, 1895. The persons who constituted that company had notice, as is found by the referee, that the original transfer to Mrs. Bolton was made in fraud of the creditors of Thomas Bolton, and it must be assumed, I suppose, that, so far as they took those original assets, they took them with notice of the right of the creditors to pursue them wherever they might be. But they certainly did not have any further right than that; and, if Mrs. Bolton had disposed of those assets to bona fide purchasers before that time, and had received money for them, which she had put in her pocket, the Bolton Shoe Company would not be called upon, as I look at it, to suppose that the property which she still held at that time was a portion of that which she had received from her husband in fraud of his creditors, or that it was chargeable with her husband’s debts.
I cannot accede to the proposition that one who takes property from an insolvent in fraud of his creditors is precluded for all time from dealing with that property, or any other, just because the creditors are seeking to pursue it. I think that the Bolton Shoe Company should only be made liable, at the outside, for the value of the property which Mrs. Bolton received from her husband, and which was actually transferred to that corporation. There was not one particle of evidence in the case to show what was the value of that property, either when it was transferred by Bolton to his wife, or by Mrs. Bolton to the Thomas Bolton Shoe Company, or by that firm to the corporation. All that is in evidence with respect to it is that, when the corporation was organized, Mrs. Bolton received stock to the amount of $10,975.40, less the sum of $2,024, paid out' to her. Clearly, the Bolton Shoe Company never received that $2,024, or one penny of it; and there is no claim that it did, but it *912is charged by the referee with that sum, just as if it had received it. The only evidence as to the value of the property is that the corporation paid Mrs. Bolton for her interest in the assets of the firm the sum of $10,975.40. That those assets of the firm were the same property that was transferred to Mrs. Bolton by her husband is not made to appear. All that is said about it by the referee is that it was the same property covered by the bill of sale, or property substituted by her and her partner in place thereof, and proceeds of sale of property so conveyed and substituted. Certainly, the Bolton Shoe Company is not responsible for the proceeds of property which Mrs. Bolton had received from her husband, and sold, and which she had put into the firm, and in no event is it responsible for more than the actual value of the property which it received; and, as I have said, there is no evidence of that value. The value put upon it by the firm was ten thousand and some odd dollars, but that is no evidence of the actual value, and the corporation is not required to account to any one else for that amount. This court has just held, as I understand it, in Sebring v. Wellington, 71 N. Y. Supp. 788, that evidence of what is paid for a thing is not competent as bearing upon its value. If that rule be applied here, evidence of what was paid by the company for Mrs. Bolton’s share of the assets of the firm is clearly no evidence of its value.
I think the judgment should be modified at least by charging the Bolton Shoe Company with the amount only of the value of the assets which it received from Mrs. Bolton at the time of the organ’zation of the company, if, indeed, it can be said to be chargeable with anything at all.
WILLIAMS, J., concurs.