Baldwin v. Childs

223 A.D. 781

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: March 15, 1928
• Status: Published

Opinion

Judgment reversed upon the law and the facts, with costs, and judgment directed for appellants, dismissing the complaint on the merits, with costs. The finding of fact made by the jury under its special verdict is reversed and this court finds that there is not sufficient evidence to support the finding that Childs & Joseph had an intention on October 7 and 11, 1921, when the contracts in question were entered into, not to pay for the goods. The intention not to pay for the goods in question cannot, in our opinion, be predicated upon the mere fact that Childs & Joseph, at the date of the said contracts, were insolvent. (Hotchkin v. Third Nat. Bank, 127 N. Y. 329; Morris v. Talcott, 96 id. 100.) And there is no other evidence in the case showing their intent not to pay. But, assuming that such intent did exist, and .that plaintiffs were entitled to rescind the sale for such fraud on the part of Childs & Joseph, it is our opinion that the delivery of the cotton goods in question by Childs & Joseph to cover the bills of lading theretofore issued, in effect validated said bills on that date, and that such delivery did not constitute the fulfillment of an antecedent debt or obligation which prevented defendants and those whom they represented from being purchasers in good faith for value and without notice of Childs & Joseph’s alleged fraud upon the plaintiffs in obtaining the goods. In our opinion, the situation in the case at bar, so far as the principle of law to be applied is concerned, is the same as though the bills of lading in question were issued and delivered and had their inception upon the date of the actual delivery of the cotton goods in question, and, this being before plaintiffs’ attempted rescission, title to the goods passed. Rich and Young, JJ., concur; Lazansky, P. J., and Hagarty, J., concur in result; Kapper, J., dissents.