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Wildman v. Van Gelder

14 N.Y.S. 914 Court N.Y. Gen. Term Decision date 1891-06-12 English

Delivered by Daniels, J.

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p. 914
Wildman v. Van Gelder.
(Supreme Court, General Term, First Department.
June 12, 1891.)

Headnote

Attachment—Fraudulent Diversion of Check.
Defendant, as a stockholder, agreed to pay plaintiff, as trustee of a company, an assessment on his stock, provided the company would deliver to him (plaintiff) its check for the same amount in payment of an indebtedness to him, which the company agreed to do. Defendant then delivered to plaintiff his check dated July 36, 1890, but requested that its presentment be delayed until the 39th of the following month, to enable him to meet it with the company’s check, which on that day was delivered to him to be used for that purpose. Instead of. so using it, plaintiff stopped payment of his own check, and applied the proceeds of the company’s check to other purposes. Held, that plaintiff was entitled to an attachment, defendant’s conduct being reconcilable with no other inference than that he intended to defraud the company by diversion of the check from its intended purpose.
Appeal from special term, New York county.
Action by Alfred H. Wildman against John Yan Gelder. From an order vacating an attachment plaintiff appeals.
Argued before Daniels and Lambert, JJ.
Davies, Short & Townsend, (Julien T. Davies and Edward Lyman Short, of counsel,) for appellant. John E. Eustis, for respondent.

The attachment was issued on the ground that the defendant had assigned and disposed of property, with the intent to defraud the plaintiff, Ms creditor. To establish this recital it was proved by the affidavits that the defendant, as a stockholder in the Hat-Sweat Manufacturing Company, had agreed to pay an assessment to the plaintiff as trustee for the company, amounting to the sum of $1,200, provided the company would deliver to him its check for the same amount upon an indebtedness of the company to him, and that the check of the company should be- used and applied by him to pay Ms own check delivered to the plaintiff as trustee, arid on the faith of which the latter agreed to and did pay the assessment for the defendant. He made and delivered his check to the plaintiff, dated July 28,1890, but at his request its presentment for payment was delayed 'until the 29th of the following month, to enable the defendant to meet and provide for the payment thereof by the check of the company, which on that day was made and delivered to iim, to be used in that manner by him; but instead of using the check re

p. 915
ceived by him for that object he stopped the payment of his own check, which he had made and delivered to the plaintiff, and otherwise appropriated and disposed of the check made and delivered by the company to him. These were substantially simultaneous transactions, resulting in a fraud upon the plaintiff. He had been induced by the defendant to hold his check until he received the company’s cheek for the same amount, which was delivered to him to be used only to meet hisown check delivered to the plaintiff; and when he received the company’s check he stopped payment to the plaintiff, and used the company’s check for another object. These facts create the presumption that the defendant all along, and when he received the company’s check, intended to defraud the plaintiff by inducing him to pay the assessment to the company, with the assurance that he would be reimbursed by the company’s check, but which, when it should be received, he would appropriate to a different object, and which he finally did. They warrant the conclusion that in the disposition of the check the defendant intended to defraud the plaintiff. It is undoubtedly the law that the intent to make a fraudulent disposition of the debtor’s property must not only be averred, but it must also be supported by the facts. Fleitmann v. Sickle, 13 N. Y. St. Rep. 399 ; Morris v. Talcott, 96 N. Y. 100 , 107; Bump v. Dehany, 12 N. Y. Supp. 901 . But these facts are reconcilable with no other inference than that the defendant did intend to defraud the plaintiff in the disposition which he made of the company’s check. It was received upon a disputed claim of indebtedness, to be used for a special object, and at once diverted by the defendant to another, which necessarily had the effect of defrauding the plaintiff out of the use to which the check had been specially devoted. To entitle the creditor to an attachment for this disposition of the debtor’s'property the law does not require the disposition of all the debtor’s property, or any particular portion of it, to defraud his creditors, but it has been provided in case it shall be made to appear that the debtor has assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete, property with the intent to defraud his creditors. Code Civil Proc. § 636, subd. 2; Taylor v. Myers, 34 Mo. 81 . The check delivered to him was property, and the intent to defraud the plaintiff by its disposition is very fully disclosed by the facts which the affidavits maintain. And he, as a creditor, is as much within the spirit of this provision as two or more or any other number of the debtor’s creditors would be, whom he intended to defraud by the disposition of any part of his property. Sherrill v. Bench, 37 Ark. 560 ; Correy v. Lake, Deady, 469. The order should be reversed, with $10 costs and the disbursements, and the motion denied.

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