Court Opinion

ID: 5274686
Source: CourtListenerOpinion
Date Created: 2022-01-06 21:35:26.592675+00
Date Added: 2024-06-11T08:27:46.773311
License: Public Domain

McAvoy, J.:
The summons in this case without a written complaint was served on the 10th day of January, 1923; defendants on the 12th day of January, 1923, served their notice of appearance. The plaintiff did not serve his complaint until 281 days thereafter, which was on the 20th day of October, 1923. The defendants accepted a notice of trial before issue was joined, thus consenting that the cause go on the calendar in advance of the joinder of issue. The plaintiff’s motion to prefer the cause was not opposed.
The case is at issue only since February 8, 1924. The defendants moved for an order allowing an amendment of the answer before the cause came on the day calendar, and consented to try the case when reached on the day calendar and asked for no delay. The plaintiff, who had theretofore received extension of time to serve his complaint for a period of 281 days, opposed the application because, among other things, he claimed the service of an amended answer would delay the trial of the action. This in face of the express stipulation contained in defendants’ moving affidavit to go to trial on the amended answer when the cause was reached on the day calendar.
On these facts the court below denied the defendants’ leave to amend.
The trustee in bankruptcy of the Premier Clothing Corporation brings this action to recover $16,990 from the defendants. The bankrupt corporation was organized in May, 1922. The petition in bankruptcy was filed two months later. On June 1, 1922, the defendants, who are woolen merchants, sold to the Premier Clothing Corporation on terms of credit overcoating clothes of the agreed price of $11,486. At the time of the sale of the merchandise to the defendants the corporation’s officers represented that the concern was solvent in all respects. The defendants accepted notes of the corporation in payment for the merchandise. These notes were indorsed by Morris Levitón and Samuel Goldberg. The officers of the corporation represented that these indorsers were financially responsible.
The indorser Morris Levitón was petitioned into bankruptcy *572in the middle of July, 1922; this caused the defendants to make inquiry. Shortly thereafter the indorser Samuel Goldberg was likewise thrown into bankruptcy. It was at this time that defendants discovered that they had been defrauded. The defendants at once rescinded the sale and disaffirmed on the ground of the fraud in obtaining the goods by misrepresentation. Threatening legal action, defendants immediately demanded the return of the merchandise. On July 28, 1922, the corporation gave up the goods delivered in June and as yet unpaid for. Three days later a petition in bankruptcy was filed against the Premier Clothing Corporation.
The trustee now sues for this merchandise on two theories: (1) That the defendants received a voidable preference under subdivision b of section 60 of the National Bankruptcy Act; (2) that the defendants have been guilty of conversion.
After the application to prefer the case was granted, the case was taken up in order to prepare for trial, and it was thereupon discovered that the facts and matters constituting the defense were not affirmatively alleged. The attorney who had charge of preparing the pleadings had interposed merely a general denial and the defense that the plaintiff had an adequate remedy at law. Thereupon a proposed amended answer was prepared, and affidavits and an order to show cause were served on plaintiff’s attorney. The cause at that time had not reached the day calendar.
We think that no cause was shown for denying defendants the relief asked. The amendment of the answer in the manner proposed was necessary to bring about a full disclosure of the parties’ relations at the time of the alleged conversion, or to indicate that no unlawful preference was allowed in returning the goods said to have been fraudulently obtained. To deny amendment here would be to shut the door upon defendants’ right to exhibit their defense.
The order should be reversed, without costs, and the motion granted, with ten dollars costs, the case to retain its place on the calendar upon defendants’ paying plaintiff’s costs tó date, except costs of this appeal.
Clarke, P. J., Dowling, Smith and Martin, JJ., concur.
Order reversed, without costs, and motion granted, with ten dollars costs.