Bier v. Kibbee — 22 N.Y. St. Rep. 921

Majority

p. 921

Isaac Bier et al., Resp’ts, v. Cyrus Kibbee et al., App’lts.

(Supreme Court, General Term, Fifth Department,

Filed April 12, 1889.)

Headnote

1. Attachment—When direction of verdict error.

The plaintiffs, merchants doing business in the city of Rochester, were creditors of one Wetmore, doing business at Garfield, Pa. Wetmore executed an instrument conveying to plaintiffs his entire stock of goods as security for their debt. He also transferred to them all his interest in the lease of the premises he occupied as a store. The defendant K. was also a creditor of Wetmore, and when the goods reached Salamanca, to which place they had been shipped by the plaintiffs, caused a portion of them to be attached. This action was brought to recover these goods. The evi dence tended to prove that very soon after the plaintiffs took possession of the goods, they realized enough to pay their debt in full. Held, that it was error to direct a verdict in favor of the plaintiffs, as a question was made how much remained unpaid in the plaintiffs’ debt.

S. Fraud—When question for the jury.

Where an issue of fraud is raised, and the evidence fairly tends to support the allegations, it is for the jury to determine the questions, and the statute makes the question of fraud one of fact, to be determined by the jury.

p. 922

3. Same—Evidence—When competent to prove fraud.

The lease, which was transferred at the same time as the goods, formed a part of-the same transaction. Held, that it was competent and pertinent for the defendant to prove the value of the lease as hearing upon the question of fraud.

Appeal from a judgment entered on a verdict rendered at the Cattaraugus circuit in the plaintiff’s favor for the sum of $351.29, and from an order denying defendants* motion for a new trial founded on the judge’s minutes. The plaintiffs, merchants, doing business in the city of Rochester, were the creditors of one Wetmore, who was a retail merchant doing business at Garfield, Pa. Their debt amounted to the sum of $957.86. .

On the 27th day of October, 1882, Wetmore executed an instrument by which he conveyed to them his entire stock of goods and groceries which he then had on hand, and at the same time, and as a part of the same transaction, the plaintiffs executed an instrument in which they acknowl - edged that the transfer of the goods was for the purpose of securing their debt, and after the same was paid, with expenses, they agreed to pay the balance to the said Wetmore or any person he might name. The plaintiffs took immediate possession of the goods and shipped a large part of them to Salamanca in this state. The defendant Kibbe was also a creditor of Wetmore, and when the goods reached Salamanca the defendant Darrow, the sheriff of that county, attached a portion of the goods -of the value of $266, on an attachment which Kibbe had procured and placed in the hands of the sheriff to be executed. This is an action of trover to recover the value of those goods.

When the evidence was all in, the defendant requested to-go to the jury upon the question, whether the transfer by Wetmore to the plaintiffs was made with intent to hinder, delay and defraud the creditors of Wetmore. They also-ask to go to the jury upon all the questions presented by the issues and which the proof tended to establish, which request was denied, and the defendants excepted, and thereupon the court directed a verdict in the plaintiffs favor for the sum of $351.29, being the value of the goods, as stipulated by the parties at the time of the seizure, and with interest thereon to the time of .the trial.

The plaintiffs sold and converted into money all the goods excepting those seized by the sheriff on the attachment. At the time of the seizure, Wetmore was the owner of the undivided one-half of the store building in which he carried on business under a lease running to himself and another. At the time the goods were transferred Wetmoremade a conveyance of all his interest in the lease to the plaintiffs, which was absolute and unqualified on its face,.

p. 923

expressing a consideration of $200 which was acknowledged to have been paid.

The defendants made a motion for a new trial upon the judge’s minutes, which was denied.

F. W. Kruse, for app’lts; Hudson Ansley, for resp’ts.

—An error was committed on the trial in directing a verdict in the plaintiffs’ favor. The plaintiffs’ position is that the transaction between them and Wetmore was, in legal effect, a written pledge, in the nature of a chattel mortgage to secure their indebtedness, which was fixed in the instrument at $957.86.

They could not hold the property, or the avails arising from a sale of the same, for a greater sum. The other creditors of Wetmore could, by proper proceedings in an action against him, secure a lien on the property, subject to the plaintiffs’ lien as security for their debts. This the defendant Kibbe secured by the levy made by the sheriff under his attachment.

In this action the plaintiffs could recover as damages no greater sum than the balance of their debt, after applying all sums derived from a sale of the property pledged or mortgaged. The evidence tended to prove that very soon after the plaintiffs took possession of the goods, they realized by sales enough to pay their debt in full, at least, that the amount remaining unpaid thereon, after deducting-all expenses, was less than the amount of the verdict ordered by the court. It is admitted that they received from the sale of a portion of the goods made to Wiseman, $700. The evidence tended to prove that before the goods were shipped from Garfield, they sold a portion of the goods included in the bill of sale, and derived therefrom $250.

These two items paid the plaintiffs’ debt within $7.86. We need not take further notice of the evidence, with a view of showing that it was error to direct a verdict in the plaintiffs’ favor for the value of the goods seized by the defendants, as a question was clearly made as to how much remained unpaid on the plaintiff’s debt secured by the transfer of the property. But there is evidence which would justify the jury in reaching the conclusion that it was intended by the parties that the transfer of the lease should be absolute, giving the plaintiffs an unqualified title to the same, and if that was so, then as between the parties to this suit, the price agreed upon for the transfer, as expressed in the assignment, should have been credited on the plaintiffs’ demand, which would have overpaid their debt. The deed is absolute in terms, and conveys all of Wetmore’s interest in the lease.

p. 924

Wetmore testified that the building was to be sold and the proceeds to be applied on the debt the same as the other property, and Mr. Elyea, one of the plaintiffs who negotiated the arrangement with Wetmore and who was a witness on the trial, was silent on this subject. Although Wetwore was called to the stand by the defendants, his statements are not conclusive against them on'this question. When this trial took place the pleadings had been amended so as to present the question as to the bona fides of the transfer, and the defendants contended that the same was made with intent to hinder, delay and defraud the other creditors of Wetmore in the collection of their debts. If this was the aim and purpose of the parties to that transaction the plaintiffs would have no lien on the property which the law would uphold as against Wet-more’s creditors. The evidence tended to prove fraud and had sufficient probative force, as we think, to make a case for the consideration of the jury. The evidence tended to prove that the merchandise in the store and embraced in the transfer was worth $2,000. This value was placed on the stock by a witness who was a clerk in the store at the time the goods were delivered to the plaintiffs. Wetmore’s interest in the lease and the value of the same was from $300 to $350 as the jury might have found from the evidence of the plaintiff, Elyea.

The plaintiffs never made any inventory, nor did Wet-more, of the stock of merchandise as may be fairly inferred from the evidence, nor can it be determined from the proofs, the quantity or value of a single article, except those seized by the sheriff. This is a very remarkable circumstance in view of the fact that both parties were merchants and no attempt was made to explain the omission to do so, and tends to prove the averments set up in the defendant’s answer that the transfer was fraudulent. The goods were, as the evidence also tends to prove, carelessly packed when shipped from Garfield to Salamanca, and in such a manner as tended to depreciate their value,- and this also indicates that the plaintiffs as well as Wetmore were indifferent to the amount which should be realized therefrom. Immediately after the papers were executed Wetmore left the place of his residence and went into Canada and remained there for a time. In all cases where an issue of fraud is raised and the evidence fairly tends to support the allegations, it is for the jury to determine the questions, and the statute makes the question of fraud one of fact to be determined by the jury.

We are also clearly of the opinion that it was pertinent for the defendant, in support of his side of the case, to prove

p. 925

the value of the lease as a circumstance bearing on the question of fraud.

The lease was transferred at the same time the goods were delivered, and the transfer was demanded as a further security, and the same formed a part of the same transaction.

Wetmore distinctly stated as a witness that the lease was to be sold and the proceeds to be applied on the debt due the plaintiffs. It was as competent and pertinent on the question of fraud to prove the value of the lease, as it was the value of the merchandise.

When this case was before this court on a former appeal ( 43 Hun, 174 ; 4 N. Y. State Rep., 419) nothing was determined which supports the rulings made on the last trial or which is inconsistent with the views which we have expressed. The question of fraud was not the issue; an amended answer setting up fraud in fact having been since waived.

The plaintiffs had a perfect right to take from Wetmore, their debtor, security for their debt, but however just and equitable the debt may be, if they and Wetmore entered into a scheme to cheat and defraud, hinder and delay the other creditors of Wetmore, the transaction is void, and the seizure of the goods by the sheriff on the attachment is fully justified.

Judgment and the order should be reversed and a new trial granted, with costs to abide the event.

All concur.