Bailey v. Prince — 24 N.Y. St. Rep. 632

Majority

p. 632

Theodore W. Bailey et al., Resp’ts, v. Arial A. Prince et al., App’lts.

(Supreme Court, General Term, First Department,

Filed May 24, 1889.)

Headnote

1. Arrest—Order of—When eaots won which order «ranted, not extrinsic to the catjse op action—Code Crv. Pro, § 549, surd. 4.

Where the element, in an alleged cause of action, which upholds its maintenance by a plaintiff, is the averment that the defendant has removed or disposed of his ¡property, with intent to defraud his creditors, the facts on which an order; of arrest is granted, cannot be regarded as extrinsic to the cause of action. \

2. Same—Application to vacate order—When disposed op.

In a case in which the facts constituting the cause of action are identical with the facts constituting the cause of arrest, the court should dispose of an application to itacate the order of arrest according to the just preponderance of proof contained in the affidavit read upon such motion, and a decision as to the defendants’ liability to arrest ought not to be postponed until the trial. !

Appeal from order denying motion to vacate order of arrest.

Ourden D. Shrauder, for app’lts; T. C. Campbell, for resp’ts. ¡

The right of the plaintiffs to recover in this action depends upon their ability to prove that the defendants removed or disposed of their property with intent to defraud their creditors. Code Civ. Bro., § 549, subd. 4.

The court belay held that the question of fraud should not'be passed upcp in advance of the trial, except in a clear case; and the view thus expressed is sanctioned in Welch v. Winterburn ( 14 Hun, 519 ), and Peck v. Lombard ( 22 Hun, 63 ), where it was held that an order of arrest, based on the nature of ¡the action, should not be vacated upon affidavits tending ¡to disprove the existence of the alleged cause of action. ]

In the present j case, the cause of action primarily arises out of the breach of the defendants’ contract to pay for the goods which they purchased from the plaintiffs; but proof of this breach would not suffice of itself to sustain a verdict in the plaintiffs’ favor. They must go further and establish the" fraudulent removal of the defendants’ property, or they must suffer defeat in the suit. The element in their alleged cause of action, which renders it possible for them to maintain this particular suit, is the averment that the defendants have removed or disposed of their

p. 633

property with intent to defraud their creditors; and, therefore, the facts, on which the order of arrest is granted, cannot properly be regarded as extrinsic to the cause of action.

The doctrine which finds support in Welch v. Winterburn and Peck v. Lombard (supra), however, has not uniformly been acted upon in this court, and the better rule seems to be that indicated by Mr. Justice Daniels in Liddell v. Paton ( 7 Hun, 195 ), to the effect that, ev.en in a case in which the facts constituting the cause of action are identical with the facts constituting the cause of arrest, the court should dispose of an application to vacate the order of arrest according to the just preponderance of proof as contained in the affidavits read upon such motion, and a decision as to the defendants’ liability to arrest ought not to be postponed until the trial. But, applying that rule to the case at bar, and assuming that the court below was bound to decide the motion upon the merits, I am not satisfied that it was erroneously denied.

Numerous acts of the defendants are proved, and, indeed, admitted, which might well and justly excite the suspicion of the plaintiffs, and which certainly called for explanation on the part of the defendants. The foreclosure of the chattel mortgage, the short time occupied by the sale thereunder, the transportation of goods to New England in an unpacked condition, and the removal of others from the defendants’ premises, late at night, were circumstances that would naturally give rise to inquiry by the plaintiffs. Such inquiry, in the light of the statements made to them by the witnesses, whose affidavits they produce, indicated that the property of the defendants had been fraudulently removed. The denials and explanations by and in behalf of the defendants, meet many, and, perhaps, most, of the allegations satisfactorily, if the witnesses are to be believed; but, to my mind, their averment that the mortgage foreclosure sale was made in good faith, is seriously discredited by their omission to produce any affidavit by the alleged purchaser. The absence of any statement from him seems too significant, under the circumstances, to be overlooked, - and leaves the preponderance of the proof with the plaintiffs.

The order appealed from should be affirmed, with costs and disbursements.

Van Brunt, Oh. J., and Daniels, J., concur.