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Claflin v. Smith

13 Abb. N. Cas. 205 Court N. Y. Supreme Court, First Department ; Special Term, English

Delivered by Lawrence, J.

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p. 205
CLAFLIN v. SMITH.
N. Y. Supreme Court, First Department ; Special Term,
December, 1883.

Headnote

Action to reach Equitable assets and to set aside Assignment for Creditors.—Bill of Particulars.
In an. action brought to set aside aside an assignment for creditors on the general ground, that it was made in fraud of creditors, the plaintiff may be compelled to furnish a bill of particulars of the
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time and place of the acts or things which he intends to prove as showing the fraudulent intent. When it is alleged in the moving affidavits and not denied, that the plaintiffs intend to prove on the trial that the assignor shortly prior to his assignment transferred some portions of his estate to others than the assignee, so as not to have it pass under the deed of assignment, the plaintiff may be compelled to furnish the names and occasions of such transfers, at least where it is uncontradicted that the defendants have no knowledge of such fact other than communicated by rumor and are likely to be surprised at the trial unless informed by a bill of particulars thereof.
Motion, for a bill of particulars.
The action was brought by Horace B. Claflin and others, judgment creditors, having executions returned unsatisfied, to set aside a preferential assignment by the judgment debtors. The averment of the complaint was in general language, “ Plaintiffs further allege on information and belief that said assignment was made, executed, and delivered with intent to hinder, delay, and defraud the creditors of the assignor, including these plaintiffs.”
The preferred creditors being impleaded with the assignee and assignor by order of the court, then moved for a bill of particulars, on an affidavit, setting; out among other things the facts mentioned in the; opinion, which were not traversed or denied. The further facts appear in the opinion.
Robert Ludlow Fowler, for the creditors, impleaded, for the motion.
I. The complaint is a mere general and vague reference to the statute against fraudulent' transfers (Kinder v. Macy, 7 Cal. 209 ; Meeker v. Harris, 19 Id. 278 ; Mott v. Dunn, 10 How. Pr. 225 ; Harris v. Taylor, 15 Cal. 349 ); yet fraudulent intent is gathered from facts (Purkitt v. Polack, 17 Cal. 332 .
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II. The Code (§ 481) requires facts to be pleaded ( 9 Barb. 158 ).
III. The complaint is not obnoxious to a motion to make it more definite and certain (Hastings v. Thurston, 10 Abb. Pr. 418 ), and the defendant’s only remedy, therefore, is by a motion for a bill of particulars.
IV". Bills of particulars are the remedy wherever a general form of pleading is allowed (Tilton v. Beecher, 59 N. Y. 176 , 184).
V. It is now competent to prove the debtor’s fraudulent subtractions of property on the eve of his assignment, and such subtractions are evidence of fraud (Schultz v. Hoagland, 85 N. Y. 464 ). Justice demands that defendants be apprised of the character of such intended proofs, so that they may be met on the trial.
Otto Horwitz, opposed.

The defendants who make this motion are judgment creditors of Clinton H. Smith, and this action is brought by the plaintiff to set aside a general assignment made by him to the defendant, John Gf. Smith, for the benefit of creditors. It appears that executions have been issued on the judgments recovered by the moving defendants against Clinton H. Smith, and that said executions have been returned wholly unsatisfied.

By an order granted by Mr. Justice Potter, the moving defendants were allowed to intervene and to be made parties defendant in this action, and they now ask that as the assignment in question is alleged in the complaint in general terms to have been made, executed and delivered with intent to hinder, delay and defraud the creditors of said Clinton H. Smith, the plaintiffs may be ordered to deliver to them a statement in writing of the times and places at which the plaintiffs

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expect or intend to prove any acts or things which serve to show that the assignment named in the complaint was done with fraudulent intent, as charged in the complaint, and particularly to what persons and at what times and places the plaintiffs will claim or offer to prove that the assignor, Clinton H. Smith, made secret or other assignments of his estate. In other words, they ask for the particulars of the grounds on which the plaintiff will claim upon the trial that the assignment in question was made with intent to hinder,' delay or defraud the creditors of the assignor.

In the case of Dwight v. Germania Ins. Co. ( 84 N. Y. 493 ), the court of appeals held that the power of the supreme court to order bills of particulars extends to all descriptions of actions, and that it may be exercised as well in behalf of the plaintiff as of the defendant.

(See also Tilton v. Beecher, 59 N. Y. 156 .)

In this case, there is nothing in the complaint which apprises the defendants of the ground on which the plaintiffs will claim that the assignment was executed with the intent to hinder, delay and defraud the creditors of the assignor. The defendants show that they, as well as the plaintiffs, are creditors of the assignor ; that they are greatly interested in the proper defense of the action, and that the indebtedness to them, which is very large, was for merchandise sold by them to the assignor ; that the assignee is thought by the creditors to be disaffected to the said assignment; that they are informed and believe that the plaintiffs give out that the assignor shortly prior to his insolvency transferred the estate, or some part thereof/ so as not to have it. passed by the deed of assignment; and that they thus intend to prove the fraudulent intent alleged; but that the defendants impleaded

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have no other or further knowledge of such assertion .an that communicated by rumor, etc., etc. They also allege that they do not know what witnesses will be necessary, or what facts will be probative under the vague and general allegations of the complaint, and that unless they are furnished with a bill of particulars of the times and places at which the assignor is said to have transferred his estate with a view to subtract it from the assignor, they may be entrapped into a trial without due, legal and complete notice of the matters and things affecting their rights under the deed of assignment referred to in the complaint.

My examination of the complaint leads me to the conclusion that the motion should be granted. The moving defendants, as has been before observed, are judgment creditors of Clinton H. Smith, the assignor, and the assignment is alleged to be a preferential assignment. It is not before me, but I infer, from what was said on the argument, that this controversy has in some measure arisen from those preferences. The moving defendants are interested as much in sustaining the assignment as the plaintiffs are in attacking it, and they are entitled, I think, to know precisely on what ground it is claimed to be fraudulent (see particularly the remarks of Foeger, Ch. J., in Dwight v. Germania Life Ins. Co., before cited, 84 N. Y. 505 ; also, McCreight v. Stevens, 1 H. & E. 454; Pitts v. Chambers, 1 F. & F. 684 ; West v. West, 4 S. & T. 22; Jones v. Bervicke, Law Reports, 5 C. P. 32; Kinder v. Macy, 7 Cal. 206 ; Meeker v. Harris, 19 Cal. 289 .

Let an order be entered in conformity with these views.

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