Smith v. Van Olinda

Headnote

One who furnishes the credit, and in whose name a business is earned on, is the legal owner of the property' purchased upon his credit and employed in the business, although the beneficial interest in the business is in another.

In an action for conversion of personal property, defendants justified under a judgment and execution against a third person who carried on business in plaintiff’s name, as her agent, and with materials and labor purchased and procured upon her credit. The property levied upon was thus manufactured. Upon the trial defendants offered to prove that plaintiff allowed the execution debtor to use her name and credit to carry on business for his sole benefit. The court excluded the evidence. The court also refused to submit to the jury the question whether such an arrangement was fraudulent and void as to creditors.

Held, no error; that no fraud could be deduced therefrom. {Booth v. Bunco, 24 H. Y., 592, distinguished.)

Appeal from judgment of the General Term of the Supreme Court in the fourth judicial district, affirming a judgment in favor of plaintiff entered upon a verdict.

The action was to recover for the alleged wrongful conversion of a wagon by the defendants.

The defendants denied the allegations of the complaint, and alleged the recovery of a judgment in the Supreme Court, in favor of Van Olinda against James H. Smith and George Smith, in 1862'; an execution issued thereon, and delivered to the defendant Davis, as a deputy sheriff, under which the wagon was levied on and sold as the property of James H. Smith.

At the trial, it appeared that the plaintiff rented a shop, and purchased the necessary tools and stock to carry on the business of wagon making, on her own credit, in 1860, giving her notes for the amount, which were afterward paid out of the income and earnings of the business. James H. Smith was employed as the agent of the plaintiff, to superintend and carry on the business, under an agreement with the plaintiff, who was his step-mother, that he should have for his services a good living out of the business. He made all the purchases, employed workmen and collected the debts due, as the agent of his mother, and in her name, and applied the income to the payment of her liabilities contracted in the said business. She was possessed of property and credit. The wagon levied on was built at the shop, with stock and materials so purchased. On the part of the defendants it appeared in evidence that said James had been engaged in the same business on his own account, prior to 1860, and failed; that thp debt due to the plaintiff was contracted prior to that date; that the plaintiff had put into the business no money except the sum of fifteen dollars, which the said James had obtained from her to make up a sum when he went to Albany to make some purchases for the business; that sh'e had not received anything from the business; that no account was kept of the money received in it, and none was rendered to the plaintiff; that the business amounted to $1,000 or $2,000 a year; nothing was said as to what was to be done with the income over and above the living of the said James; that he had paid out all

that had been received for labor employed, rent of the shopy and the tools and stock purchased, and his own expenses.

It also appeared on the part of the plaintiff, that the entire earnings did not exceed the amount of her liabilities.

■ The recovery of the judgment, the issuing of the execution, and the levy thereunder were admitted. It was also admitted that the defendant Davis was deputy sheriff, and acted under the said execution, and that Van Olinda was the plaintiff therein and directed the said levy.

The defendants then offered to prove that the plaintiff gave James H. Smith the right to carry on the business of wagon making and blacksmithing, in her name, and on her credit, for his sole benefit, and claimed that its effect was to hinder, delay and defraud the creditors of said Smith. The court sustained an objection thereto by the plaintiff, and the defendants excepted.

The defendants asked to have the question submitted to the jury, whether the arrangement between the plaintiff and James H. Smith was not fraudulent and void as against his creditors. The court denied this request, and the defendants excepted.

The jury rendered a verdict for the plaintiff for $125, for which sum, with costs, judgment was entered against the defendants.