Buhl v. Ball — 2 N.Y. St. Rep. 270

Majority

p. 270

Frederick Buhl and Walter Buhl, appellants, v. Michael Ball and Ellis Levy, respondents. Samuel Goodman and others, appellants, v. Michael Ball and Ellis Levy, respondents.

(Supreme Court, General Term, Fifth Department,

Filed June 1, 1886.)

Headnote

1. Attachment—Practice—Affidavit—Wiiat it should contain—Code

Civil Procedure, § 686.

Where an agent, or attorney makes the affidavit upon which a warrant ■ of attachment is to issue, unless his relations to his principal are such as to enable him to depose positively, he must state on information and belief derived from the requisite sources and means of information, which means and sources must be stated to justify granting the process. Code Civil Pro., § 636.

2. Same—Vacating—Additional affidavits not allowed—Code Civil

Procedure, § 683.

Where the application to vacate the attachment is made solely on the papers before the judge when he granted it, the question is jurisdictional and support wall not be allowed to the attachment by proofs nunc pro iunc. See Code Civil Pro., § 683. Motion for leave to amend affidavit will not be granted.

Appeals from orders of Erie special term vacating attachments and denying motions to amend affidavits upon which they were issued.

The attachments were granted upon the ground that the defendants had assigned their property with intent to defraud their creditors. And it appears by the affidavits that on the 12th day of November, 1885, they made a general assignment of their property in trust for the benefit of their creditors. The defendants were merchant tailors at the city of Buffalo; and on the 6th day of February, 1885, one of them was called upon by Mr. Marshall, a representative of R. G. Dun & Co.’s mercantile agency, to whom he represented that they had, on the 27th of January preceding, taken an inventory, and their stock then amounted to $15,771.55; that there was then owing to them accounts collectable, $7,402.33 and $1,356:56, worth fifty percent., and they had cash on hand, $90 to $100; .that their liabilities did not exceed $6,000, of which they had paid since the 27th January, $2,000, and the defendant then exhibited an inventory in support of his statement. This statement showed the defendants worth on the 6th of February, nearly $20,000. Their schedule, filed after making the assignment, showed that their nominal assets were $48,972.21, and their actual assets $13,499.39, and their liabilities $57,118.31, amongst which was due banks in Buffalo, $12,152.66; also liability on other paper at such banks,

p. 271

$3,345; to other parties in Buffalo, $657.47, and to persons outside of that city, for merchandise, $34,973.47. That by the assignment preference was given to their Buffalo creditors, and not given to any creditors elsewhere, except one to tíre amount of $356.31. The debts upon which these actions were brought were incurred for goods purchased by the defendants in September and October, 1885, on credit, which had not expired at the time of the assignment.

This is substantially the state of facts upon which the charge of fraudulent intent is founded. Upon the motion to vacate the attachments the sufficiency of the affidavits in other respects was challenged; and the plaintiffs, upon notices, moved for leave to amend the affidavits" in those respects. These motions to amend were denied upon the ground of want of power. The plaintiffs appeal from those orders as well as from the orders vacating the warrants of attachment.

Geo. U. Loveridge, for appellants; Baker & Schwartz, for respondents.

The facts stated in the affidavits fairly justified the conclusion that the assignment was made by the defendants with the intent to defraud their creditors. Assuming that the one defendant, in making the formal statement in detail of February, spoke for both of the defendants, and that it as then made was substantially correct, the marked change, as represented by them, of their pecuniary condition, from net assets of nearly $20,000 at that time to utter insolvency in nine months after (as represented by their schedule), is a significant fact, in view of the nature and intent of their business, and of the detailed statement of their assets and liabilities at the time of making the assignment; and although undisclosed circumstances may have intervened to repel such imputation, they were, if any such existed, matters within their personal knowledge, and without explanation they were not entitled to the inference that such suddenly asserted change in their situation came from causes not within the imputation charged by the affidavits, or that the statement of February was incorrect, or founded in mistake. The facts upon which the attachments were obtained rested wholly on the intent with which the assignment was made. And although it was a general one in trust for creditors, fraud in fact as against the creditors of the assignors furnished the right to an attachment, and to levy it upon such property assigned as was the subject of levy and sale by execution. Code Civ. Pro., § 636; Skinner v. Oettinger, 14 Abb., 109 ; G. W. Co. v. Carhart, 67 How., 403 ; Victor v. Henlein. 34 Hun, 562 ; Claflin v. Hirsch,, 19 Week. Dig., 248.

The affidavit in the Buhl Case was made by an agent of

p. 272

the plaintiffs, by which it appears that the plaintiffs resided in the state of Michigan. And this affidavit contains the statement that the plaintiffs’ claim is $1,180 and interest, “ over and above all discounts and set-offs,” * * * and that “ the plaintiffs are entitled to recover the sum above stated, over and above all counter-claims known to the plaintiffs.” Pie does not state his sources or means of knowledge, or particularly the duties of his relation as such agent.

In the Goodman Case the affidavit is made by the plaintiffs’ attorney, who states upon information and belief that plaintiffs’ claim is $884.29 and interest, “over and above all discounts and set-offs;” that the plaintiffs’ place of business is Philadelphia, and that the grounds and sources of his knowledge and belief in respect to the matters stated by him, are that he has the bill of his clients, sént to him by them, which is verified by the affidavit of one of the plaintiffs and annexed to Iris affidavit, and by reference to the verified schedules filed by the defendants, in which the plaintiffs’ claim appears. And subsequently in the affidavit he adds that “the plaintiffs are entitled to recover the sum above stated over and above all counterclaims known to the plaintiffs.” The question arises whether in these affidavits there is a substantial compliance with the statute which provides that “to entitle the plaintiff to such warrant he must show by affidavit to the satisfaction of the judge granting the same * * * that the plaintiff is entitled to recover a sum stated therein over and above all counterclaims known to him.” Code Civ. Pro., § 636. This is a summary provisional remedy to take from a debtor the custody of property, and to support the remedy the provisions of the statute in this respect must be substantially observed. Lyon v. Blakesly, 19 Hun, 299 ; Donnell v. Williams, 21 id., 216; Rupert v. Haug, 87 N. Y., 141 .

The agent of the plaintiffs in the Bidil Case, by his affidavit, unqualifiedly stated that the plaintiffs were, entitled to recover the sum named “over and above all counterclaims known to the plaintiffs,” but nothing appears in the affidavit beyond such statement, which enables the court to see how he did or could know the fact, or which permitted him to state what knowledge the plaintiffs did or did not have on the subject of counterclaims.

It is contended by the plaintiffs’ counsel that inasmuch as the statement of the deponent was in positive terms it may be assumed that he had the knowledge of the fact asserted by it; and he cites to support his contention Bates v. Pemstem (7 N. Y. Civ. Pro. R., 300), which was decided by the general term of the city court of New York, where it was held that an affidavit made by an agent and salesman of the

p. 273

plaintiffs that the sum, stated was due to the plaintiffs “over and above all claims and offsets” was sufficient. There it appeared that the agent was a salesman of the plaintiff, and the debt was produced by a sale of goods to the debtor; and that he was such was deemed by the court a significant fact which was there held to permit the inference that his knowledge justified his statement.

And distinguishing it from the affidavit in like terms made by a plaintiff’s attorney who is not presumed to be familiar with the commercial and business transactions of his client. And reference is also made to Mallory v. Allen (7 N. Y. Civ. Pro., 287), decided in the same court.

When the relation of the agent making the affidavit appears to have been such as to enable him to have the requisite knowledge to state fact, his affirmation of it may be taken as proof upon which the officer granting the warrant of attachment may judicially act, and it will support it. Gribbon v. Back, 35 Hun, 541 . And then his statement must not be qualified by the expression "of his want of knowledge of additional counter-claims. Murray v. Hankin, 30 Hun, 37 ; Smith v. Arnold, 33 id., 484. When made by an agent, the statement in the affidavit in respect to the knowledge of the existence or non-existence of counter-claims must necessarily rest upon information, unless he has such relation to the business of his principal as to justify the inference of Ms knowledge; and such is the presumption until something appears to qualify him to make his statement proof of or upon the fact for the consideration of the officer.

This may come from his relation to, and knowledge of the business of his principal, so as to enable him to depose positively, or he may state it on information and belief' derived from the requisite sources and means of information; but these circumstances to support his deposition must be presented to justify granting of the process. Jordan v. Richardson, 7 N. Y. Civ. Pro., 411; Cribben v. Schillinger, 30 Hun, 248 ; Marine Nat. Bank v. Ward, 35 id., 395 .

The difficulty in both of these cases is that no means or sources of knowledge and information of the agent and attorney of the plaintiffs are stated in their affidavits to support their assertions in them that the plaintiffs were entitled to recover the sums mentioned, “over and above all counter-claims known to the plamtiffs.” And this fact was not supplied by the reference to thé schedules filed by the defendants. The distinction between a statement so made by an agent and that made by an attorney of a plaintiff depends the particular business to which the

p. 274

of the former relates. It may be as remote and distinct from the business which' produced the debt as the relation of the attorney to it; and he may have no greater opportunity for personal knowledge of it than the latter. The qualifying distinction should therefore be made to appear.

In Gibbon v. Back, the fact appeared which enabled the judge to say that the agent had some means of knowledge upon which his conclusions of the existence of this requisite fact was founded.

• Within the rule before stated, the affidavits seem to have been insufficient to support the attachment. If the statutory requisites are unnecessarily vigorous for the preservation and protection of the rights of creditors and debtors, the subject of modification is for the legislature.

The application of the plaintiffs to supply the defects in the affidavits by adding new ones, was met by the objection that the court had no power to grant such relief, and the court denied it upon that ground. It is contended that the power is furnished by the statute providing for the allowance of amendments of “process pleading or other proceeding,” etc. Code Civ. Pro., § 723. And reference is made to Kibbe v. Wetmore ( 31 Hun, 424 ), where it was held that the provisions of such section were broad enough to cover an amendment of a warrant of attachment allowed to obviate an objection taken on motion to vacate it. The amendment there had relation to the ground stated in the process as that upon which it was issued. Here the motion was not to amend the process, but to supply by amendment additional proofs to support it. And the statute provides for application to vacate an attachment founded only upon the papers on which it is granted, or upon proof by affidavit on the part of the defendant; and that in the latter case the plaintiff may add new proof by affidavit to sustain the attachment. Code Oiv. Pro., § 683. And the practice has uniformly been such, under this section, as to exclude suppletory affidavits in support of attachments when the motions to vacate have been founded solely on the papers upon which they were issued, Steuben County Bank v. Alberger, 75 N. Y., 179 ; Smith v. Arnold, 33 Hun, 484 ; Sutherland v. Bradner, 34 id., 519 .

This is put upon the ground that the rule of practice and proceeding in such case is prescribed by the section last referred to, and denies to them the application of any other provision of the statute to modify to any extent the rule by it prescribed. "And so far as z-elates to the provisional remedy, the questiozi arising upozi the application made solely, on the papers before the officer when he granted it, is treated as Jurisdictional, azid, therefore, support will not be allowed to the attachment by proofs nunc pro tune.

p. 275

Rupert v. Haug, 87, N. Y., 141; Sutherland v. Bradner, supra.

These views require the conclusion that the orders should be affirmed.

Smith, P. J., and Haight, J., concur.