Straus v. Vogt

•"The defendant, in several of the conversations referred to, told deponent that he never figured his machinery, which he claimed to be very valuable, as a part of his assets, or took it into consideration in figuring his liabilities on merchandise account, for the reason that it was paid for out of the profits of the business; and also frequently said that the profit of a manufacturer in his line of business ought never to be less than one-third, and that, if all •manufacturers would figure that way in that particular line of merchandise which he was manufacturing, that every one in the trade would do well, and make plenty of money. That on March 7th last deponent met defendant at the Mechanics’ and Traders’ Bank, of which deponent is a director, and where defendant keeps his bank account, and in conversation again asked him how his business was, and how he was getting along, to which the defendant replied: T am doing my share of business, and am doing as wetf as any one else in my line. I have sustained no loss of any account in a long time.’ Deponent then jokingly said: ‘The braid people, Mr. Vogt, have been getting rich. Some of them did not have anything when they went in business two •or three years ago, but it seems they have been making a great deal of money lately;’ to which defendant replied, ‘Well, I have got my share of the business, and I am not poor by any means.’ That the defendant continued to purchase goods until the day after the date of the circular above referred to, .¡dthough the merchandise which he purchased on the morning of the 24th of March, and for which he sent an order, a copy of which is hereto annexed, was returned by him late in the afternoon of that day, and at about the time that the notice above mentioned was received by mail. Deponent thereupon .immediately sent the notice to his counsel, Charles A. Hess, and requested him to ascertain of the defendant’s attorney the financial condition of the defendant, which, as deponent has been informed and believes, said Hess did, and ascertained from said Pomeroy that the defendant’s liabilities were about $31,000.00, and his assets about $20,000.00 or $21,000.00. That his assets were mad.e up as follows: Book accounts considered good, $12,000.00; cash on hand, $3,000.00; merchandise on hand, $3,000.00; and machinery, about $3,000.00. The deponent was also informed by his counsel that the defendant had contemplated making an assignment for the benefit of his creditors, in which it was his intention to make preferences to some of his (defendant’s) •children for money alleged to have been loaned to the defendant by them, and which it was said they inherited from their mother; but by the advice of Mr. Pomeroy this was not done, and that the notice aforementioned was sent instead. Deponent was informed by his said counsel that Mr. Pomeroy had informed him that the defendant would only be able to pay twenty or twenty-five cents on the dollar of his indebtedness, but deponent verily believes that the said defendant is well able to pay in full all his liabilities, for the reason that in the past few months he purchased merchandise in large quantities, and for a

very large amount. That he has a number of merchandise creditors, no less than fifteen or twenty, of whom he constantly purchased goods up to within a recent date. That the credit which the defendant gave his customers was of but short duration, as he had been informed by the defendant himself; and his indebtedness to deponent and the firm of Messrs. Abig & Rusche amounts to about nine thousand dollars. That his indebtedness to other merchandise creditors'in all probability will exceed twenty thousand dollars, all of which goods were purchased by the defendant within a brief period of time. That his cash on hand and in bank on Saturday last was about eleven hundred dollars. That the payments made by him within the past three weeks, judging from the checks which deponent has seen and examined in the Mechanics’ and Traders’ Bank, are very small; and that, if the defendant now has but three thousand dollars in value or merchandise on hand, he must have secretly disposed of or sold the same, and, if so, he has failed to pay the money therefor into the business. That the defendant undoubtedly has been doing a good and prosperous business, for the reason that within a period of less than one year or thereabouts he has leased the premises adjoining his lots on the Bowery and fronting on Elizabeth street for the purpose of enabling him to enlarge his business, and to manufacture to a greater extent. That the machinery necessary to be used in the business carried on by the defendant is intricate and expensive, and is worth far in excess of the amount of three thousand dollars, as stated by defendant’s attorney to Mr. Hess. That the defendant frequently told deponent that the goods which he purchased were immediately made up and manufactured by him in braids and trimmings, to be sold at regular seasons during the year; and if the profits which the defendant claims to have made were one-third or 25 per cent., and doing a ‘fairly good’ and prosperous business, his assets should exceed his liabilities by at least twenty-five per cent. That the defendant continued to purchase and did receive merchandise from deponent up to and including the 21st day of March last past. That from the facts within the personal knowledge of deponent, as hereinbefore stated, and the reports made to him by his counsel, he verily believes that the defendant fcas secreted much of his property' and assets for the purpose of hindering, delaying, and cheating his creditors. That deponent knows of no unusual losses which the defendant could have suffered in his business or otherwise, or by fire, and, if he has, he did so knowingly, by persistently denying and refusing to tell deponent the true facts as to his financial standing, and made representations which were false and untrue. That if he was unable to pay his creditors in full he must have had knowledge of the fact long before this, in which event he must have concealed the truth; otherwise deponent would not have sold him the merchandise referred to, or given him the credit which he has. That deponent is about to commence an action, and the annexed or accompanying, summons has been issued. Wherefore deponent asks that a warrant of attachment may issue against the property of the defendant. That no previous application has been made for such warrant.” “Lionel F. Straus, being duly sworn, deposes and says that he is a clerk and salesman in the business of the plaintiff. That he has frequently seen the defendant at the place of business of the plaintiff, and overheard many of the conversations referred to in the affidavit of the plaintiff, all of which were held in the German language. That the' defendant repeatedly said in deponent’s presence that his business was ‘fairly good’ or ‘good,’ and that he was getting his share of the business, and he distinctly remembers the occasion of the conversation referred to by the plaintiff in his affidavit when the defendant informed the plaintiff in his presence that business was ‘good,’ and that he had purchased a house in Brooklyn, where he intended to reside. That on the 24th day of March last past, after the receipt of the notice calling a meeting of the creditors of the defendant, referred to in the affidavit of Mr. Straus, he called upon the firm of Messrs. Moeller & Litauer, who do business at No. 109 Green street, New York city, who are one of the creditors of the defendant, and they informed deponent that they had written to the defendant in the early part of last week, asking for payment of their account, to which the defendant replied by letter, saying that he would pay shortly, but accounts were coming in slowly, and that by the first of the

"Uliarles A. Hess, being duly sworn, deposes and says that he is a member of the firm of Hess, Townsend and McClelland, attorneys at law, and is counsel for the plaintiff above named, and has been for several years last past. That on the evening of the 24th instant plaintiff called at the residence of deponent for the purpose of consulting him in reference to the circular, a copy of which is made a part of the affidavit of the plaintiff, and requested him to call to see Mr. Pomeroy, the defendant’s attorney, for the purpose of ascertaining the purpose and object of the meeting referred to, and, if possible, to secure a statement of the defendant’s financial condition. This deponent proceeded to do, and on Saturday afternoon, the 25th instant, he called at the office of Mr. Pomeroy, No. 156 Broadway, New York city, and informed him of the subject of his visit That said Pomeroy unhesitatingly and without reserve informed deponent that the defendant had been in a bad way financially for a year or more last past; that his financial matters were in a bad shape; that he was only able to pay twenty or twenty-five per cent, of his indebtedness; and further said that when the defendant called to consult him in reference to his affairs he thought it advisable for the defendant to make a general assignment for the benefit of the creditors, preferring his (defendant’s) children for moneys which they had loaned their father, which they had received from their mother’s estate. Said Pomeroy also informed deponent that the liabilities of the defendant were about $31,-600.00, and that his assets were about $20,000.00 or $21,000.00, which were made up as follows: Book accounts considered good, $12,000.00; cash on hand, $3,000.00; merchandise on hand, $3.000.00; and value of machinery, $3,000.00. That the conversation so had was without reservation, and deponent repeated the same to his client, as near as he could remember it, and as above stated. That said Pomeroy also informed deponent that two of the largest creditors of the defendant were the plaintiff and the firm of Abig & Kusche, whose accounts would amount to about nine thousand dollars, and that there were many other creditors. Deponent asked said Pomeroy to select the plaintiff as assignee for the benefit of the creditors if a general assignment was to be made, which he said he could not do, be-i cause, if a general assignment had to be made, a certain individual, whose • name deponent cannot now recall, would be selected as the assignee, and,1 if he declined to serve, then one Thomas was to be selected, and, if he declined to act in that capacity, he thought there would be no trouble in their agreeing upon the selection of the plaintiff as such assignee. Deponent was Thereupon instructed by the plaintiff to commence legal proceedings for his protection. That at the time of the delivery to deponent of the notice referred to the plaintiff informed deponent in substance of the material facts alleged in his affidavit.”

“The affidavit of Egelu, the former bookkeeper of the defendant, makes out a strong case for the plaintiff. The defendant’s stock in July, 1892, was estimated at from $28,000 to $30,000; collectible accounts, $8,000- to $12,000; and machinery at cost price, $20,000. Egelu swears that from his knowledge and observation the assets were about the same on March 1, 1893. He asserts that the defendant’s business was fairly good, while Straus testifies that it was prosperous. The latter also states that late in March the defendant told him his stock was worth $3,000 only, and that this is all the creditors would get in that line. The question naturally suggests itself, what has become of the difference between $28,000 and $3,000? The missing $25,000 worth of stock is unaccounted for,' and its disappearance unexplained. The evidence and inferences to be drawn therefrom sufficiently sustain the plaintiff’s right to the attachment, and the motion to vacate it will be denied, with costs. See Wilmerding v. Mooney, 11 Abb. Pr. 283 ; Wilmerding v. Cohen, 8 Abb. Pr. (N. S.) 141.”

Hess, Townsend & McClelland, for appellant.

E. H. Pomeroy, for respondent.