Swarthout v. Merchant — 16 N.Y. St. Rep. 551

Majority

p. 551

Losie A. Swarthout, et al., App’lts, v. Morris R. Merchant, et al., Resp’ts.

(Supreme Court, General Term, Fourth Department,

Filed January, 1888.)

Headnote

1. Fraud—What evidence is insufficient to warrant finding of.

An intent to defraud cannot be imputed to the purchaser of property on credit, merely from the facts that he was insolvent at the time of the purchase, and that he omitted to disclose such condition to the vendor.

2. Same—What must be proven to establish a charge of.

A party seeking to establish a cause of action against another, based upon an alleged fraud, must show affirmatively facts and circumstances necessarily tending to establish a probability of guilt. If the evidence is equally consistent with innocence as with guilt it will not support the charge.

3. Same—Question of fact—When verdict may be directed for defendant.

The question of the existence of fraud is ordinarily for the consideration of the jury ; but when the evidence is insufficient to raise a question of fact, the court may properly direct a verdict in favor of the defendant.

This is an appeal from an order denying a motion for a new trial and to set aside a verdict.

Tousley & Bailey, for app’lts; D. S. Richards, for resp’ ts.

This action was replevin. By it the plaintiff sought to recover certain goods sold by them to the defendant, Morris E. Merchant, about August 21, 1884. The plaintiffs attempted to avoid the sale on the ground of fraud. Their claim was that the defendant Morris E. Merchant purchased these goods with the intent and preconceived design of not paying for them. There was neither claim nor proof that he was guilty of any other fraud or false representation that would justify a recovery in this action.

On the trial a verdict was directed for the defendants. This direction was based on the theory, that the evidence was insufficient to justify the submission of the question of fraud to the jury. The correctness of that determination is the question involved on this appeal.

Fraud is a question of fact and should generally be submitted to the jury. But it should be submitted to them upon competent and sufficient proof. Where there is no evidence to justify a finding of fraud, the question is not for the jury but for the court, and a non-suit or direction of a verdict is proper. MacCullar v. McKinley, 99 N. Y., 353 , 357. An intent to defraud cannot be imputed to a purchaser of property on credit, merely from the facts that he was to his knowledge insolvent at the time of the purchase, and that he omitted to disclose such condition to his vendor. These must be accompanied by facts disclosing an intent to ac

p. 552

quire the property without paying for it. “ The intention not to pay can no more be inferred from the mere-fact of insolvency than the fact of insolvency can be inferred from the existence of an intention not to pay.” A party seeking to establish a cause of action against another based upon an alleged fraud, must, show affirmatively facts and circumstances necessarily tending to establish a probability of guilt. If the evidence is capable of an interpretation equally consistent with innocence as with guilt, the former meaning must be given to it. Morris v. Talcott, 96 N. Y., 100 , 107, 108; People’s Bank v. Bogart, 81 id., 101, 108 ; Shultz v. Hoagland, 85 id., 464.

The evidence in this case discloses the fact that the goods-were purchased by the defendant, Morris R. Merchant, at the earnest and persistent solicitations of the plaintiff; that such defendant did not desire to make the purchase; that-the goods were urged upon him after a “good deal of holding off.” The evidence wholly fails to show any fact or circumstance attending the sale, which evinces or tends to show any intent or preconceived design, on the part of such defendant, to purchase and not to pay for the goods in controversy.

But it is said that the defendant, Morris R. Merchant, was insolvent at the time; that he must have known of his insolvency, and that the evidence tended to show that the-defendant named was engaged, at or about the same time, in other frauds similar to that charged against him in this-action. If it were conceded that such defendant was insolvent at the time of the purchase of the goods in question, and that it was known to him, still as we have already seen an intent to defraud could not be imputed to him from those facts. Moreover, an examination of the evidence fails to-show either that the defendant was engaged in the commission of other frauds similar to that charged in this action, or that such defendant made the purchase in question with an intent or preconceived design of not paying for the goods: purchased. The evidence was, we think, insufficient to present a question of fact for the jury, and the court properly directed a verdict for the defendants.

The order appealed from should be affirmed, with costs.

Hardin, P. J., and Follett, J., concur.

Judgment and order affirmed, with costs.