exandria Bay, and had in the business contracted debts, four of which, to the amount of $271.83, are the subject of this controversy. On the 1st February, 1891, he sold an undivided one-half interest in the business to the defendant Bussell, who took it subject to the indebtedness, and upon the agreement (which was part of the consideration of the transfer) that the new firm, at that time formed of Hemenway and Bussell, should become liable for the debts referred to. The business was continued by the firm of Hemenway & Bussell to July 22, 1891, at which date the plaintiff sold his interest to the defendant Keeler," with consent of Bussell, and thereafter the business was conducted by the defendants under the firm name of Keeler & Bussell. At the time of this transfer, and as a part of its consideration, it was mutually agreed between plaintiff and Keeler, with the assent of Bussell, that Keeler should take the place of plaintiff in the partnership, and that the new firm of Keeler & Bussell should assume and pay all the debts and liabilities which the partnership of Hemenway & Bussell had incurred, or for which they were liable. Thereafter the business was continued by the firm of Keeler & Bus-sell, until March, 1892, when Keeler bought out Bussell. The debts in question were not paid, and in January, 1892, the plaintiff was compelled to and did pay them, taking assignments thereof to himself. This action was commenced April 12, 1892, to recover of the firm of Keeler & Bussell the amount so paid," and the plaintiff has succeeded before the referee. Bussell does not defend. The defendant Keeler, in his answer, after denying some of the allegations in the complaint, sets up as a defense that at the time of the transfer to him, in July, 1891, the plaintiff, with the intent to cheat and defraud him, and for the purpose of inducing him to purchase the interest of plaintiff, falsely and fraudulently represented to him that the debts of the firm did not exceed $500, when in fact they exceeded $2,000; and that Keeler, relying on these representations, purchased plaintiff’s interest in the stock and business, and gave in exchange or payment therefor the stage route or line between Alexandria Bay and Bedwood, and a number of horses, wagons, sleighs, harnesses, and a United States mail contract, and assumed and agreed to pay $250, and no more, of the debts of the firm; and that he has already paid more than that amount. The same facts are set up as a counterclaim, together with the allegation that he has paid $818.25 of the debts of the firm in excess of the amount assumed. The main question at the trial was over this defense and counterclaim, and the referee in effect found that they were not sustained by the proof. The appellant claims that this conclusion is against the weight of the evidence.
The burden was on-the defendant to establish the fraud. It was necessary for him not only to show that the representations were made, but also that they were made with a knowledge that they were false and for the purpose of deceiving the defendant, and that they had that effect. Pryor v. Foster, 130 N. Y. 171 , 29 N.