Wildman v. Gelder — 39 N.Y. St. Rep. 162

Majority

p. 162

Alfred N. Wildman, App’lt, v. John Van Gelder, Resp’t.

(Supreme Court, General Term, First Department,

Filed June 12, 1891. )

Headnote

Fraud—Attachment—Diversion of check—Code Civ. Pro., § 636.

Defendant as a stockholder in the H. Go., agreed to pay plaintiff as trustee a certain assessment provided the company would deliver to him a check for the same amount upon an indebtedness to him to be used by 1 him to meet his own check to the company. Plaintiff was induced by defendant to hold his check until the former had received the company’s check, when defendant stopped payment on his own check and used that j of the company to another purpose. Held, that plaintiff was entitled to ' an attachment as the facts warranted the conclusion that in the disposition of the check the defendant intended to defraud him.

Appeal from order of special term, New York county, vacat- ¡ ing an attachment.

Edward Lyman Short, for app’lt; J. E. Eustis, for resp’t.

—The attachment was issued on the ground that i the defendant had assigned and disposed of property, with the intent to defraud the plaintiff, his creditor.

To establish this recital it was proved by the affidavits that the j defendant as a stockholder in the Hat Sweat Manufacturing Company had agreed to pay an assessment to the plaintiff as trustee for the company amounting to the sum of $1,200, provided the : company would deliver to him its check for the same amount upon an indebtedness of the company to him, and that the check of the company should be used and applied by him, to pay his own check delivered to the plaintiff as trustee, and ! on the faith of which the latter agreed to and did pay the assessment, for the defendant. He made and delivered his check to the plaintiff, dated July 28, 1890, but at his request its ! presentment for payment was delayed until the 29th of the following month to enable the defendant to meet and provide for the payment thereof by the check of the company, which on that day was made and delivered to him, to be used in that manner by him. But instead of using the check received by him for that object, he stopped the jiayment of his own check which he had made and delivered to the plaintiff, and otherwise appropriated and disposed of the check made and delivered by the company to him. These were substantially simultaneous transactions, resulting in a fraud upon the plaintiff. He had been induced by the defendant to hold his check until he received the company’s

p. 163

check for the same amount, which was delivered to him to be used only to meet his own check delivered to the plaintiff; and when he received the company’s check, he stopped payment to the plaintiff, and used the company’s check for another object. These facts create the presumption that the defendant all along, and when he received the company’s check, intended to defraud the plaintiff, by inducing him to pay the assessment to the company, with the assurance that he would be reimbursed by the eompany’s check, but which when it should be received, he would appropriate to a different object, and which he finally did. They warrant the conclusion that in the disposition of the check the defendant intended to defraud the plaintiff.

It is undoubtedly the law that the intent to make a fraudulent disposition of the debtor’s property must not only be averred, but it must also be supported by the facts. Fleitmann v. Sickle, 13 N. Y. State Rep., 399 ; Morris v. Talcott, 96 N. Y., 100 , 107 ; Bump v. Dehany, 12 N. Y. Supp., 901 ; 36 N. Y. State Rep., 114. But these facts are reconcilable with no other inference than that the defendant did intend to defraud the plaintiff in the disposition which he made of the company’s check. It was received upon a disputed claim of indebtedness to be used for a special object, and at once diverted by the defendant to another, which necessarily had the effect of defrauding the plaintiff out of the use to which the check had been specially devoted.

To entitle the creditor to an attachment for this disposition of the debtor’s property, the law does not require the disposition of all the debtor’s property, or any particular portion of it, to defraud his creditors, but it has been provided in case it shall be made to appear that the debtor has assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete property, with the intent, to defraud his creditors. Code Civ. Pro., § 636, subd. 2; Taylor v. Myers, 34 Missouri, 81.

, The check delivered to him was property, and the intent to defraud the plaintiff by its disposition is very fully disclosed by the facts which the affidavits maintain. And he as a creditor is as much within the spirit of this provision, as two or more, or any other number of the debtor’s creditors would be whom he intended to defraud by the disposition of any part of his property. Sherrill v. Bench, 37 Ark, 560 ; Correy v. Lake, Deady, U. S., 469.

The order should be reversed, with ten dollars costs and the disbursements, and the motion denied.

Lambert, J., concurs.