Frank v. Musliner

78 N.Y.S. 369, 76 A.D. 616

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 7, 1902
• Status: Published

Opinion

O’BRIEN, J.

Upon the merits, we think that the evidence supports the referee’s conclusion as to the value of the goods received by the defendants under the bill of sale, and for which they are accountable to-the trustee in bankruptcy. It is not disputed that the partners were insolvent when the transfer was made, and the bill itself apprized the defendants of other creditors, and this knowledge was reaffirmed at the meeting the day after the failure, when, instead of admitting that the goods had been received from the firm, the defendants asserted that they came from a third person, who was a small leather dealer, and understated the value, and sent the creditors to search in Providence. Although the partners said that no books existed showing the value of the stock, it was testified that it was the usual stock, which was insured for $8,ooo, and that the store, which was a large one, was full of goods, and nine large full truck loads were carried away. The statement of Collueci that there was a stock of $15,000 was corroborated by that of the salesman, who was thoroughly competent to make an accurate estimate, and who said that the goods in the store were worth $12,500, not including those in the cellar, which constituted one-fourth of the whole. Moreover, the defendant himself had said that the stock was intact, and his son, who was sent to the store for that purpose, stated that he saw $12,000 of goods there. The other testimony is that the store was full and well stocked, and the testimony that goods had been otherwise removed and secreted was wholly discredited and overborne by the weight of evidence. The defendants, in their two inventories of the replevined goods and those remaining thereafter, accounted only for stock worth $2,839.16; and that this was the real value is further discredited by the conduct of the defendants, — first, in naming one of their employés as transferee; by their hurry in getting possession of the goods; their failure to inventory them; their scattering them in three places, and putting them in any convenient spot, although they were similar to their own goods; their denying that they had goods; and their statement as to the small leather dealer; their misstatement of their value; and their refusal to deliver the goods except on stipulation to discontinue suit. On the other hand, the referee’s estimate, which would place all the goods at between $7,000 and $8,000, is well within the evidence.

The exception to the referee’s conclusion of certain evidence tending to show that the partners had secreted certain property is without merit, as much evidence of this kind was admitted, and it was competent only indirectly as showing the goods on hand at the date of the bill of sale.

Another exception — that the action is one at law, and not in equity —is not available, since it was not interposed in the answer, and consent was given that a referee should hear and determine the issues. Although nothing was said in so many words, in the judgment, about the bill of sale, the terms thereof show upon their face that it was deemed to be void. Moreover, this the defendants had expressly admitted at the opening.

The point that the defendants had offered to return the goods is not well taken, for the evidence shows that there was never an unequivocal offer to return; the defendants demanding, as a condition, that all proceedings to recover more goods of them than those surrendered should cease. The judgment entered does provide that they may return the goods they have or else pay the value thereof. So, too, the argument that the plaintiff cannot recover of the defendants because the action is instituted in pursuance of a conspiracy between the part - ners and the creditors is specious, for, although the creditors have ceased to prosecute the partners for their wrongdoing, that is no reason that the defendants, who profited thereby, should not be held to account. And for the same reason, although the point is not made on this appeal, the exception taken at the opening, to the refusal, to dismiss the complaint, on the ground that the partners were not served and brought in as defendants, is without merit, inasmuch as the defendants are liable, nevertheless, under the bankrupt act, and, the bill of sale being void, must account for the goods. Nor were the defendants prejudiced, since they too, being creditors, may share with other creditors at the hands of the trustee.

The further points — that it was error to allow evidence of the enhanced value of the goods, and that the judgment erroneously allows recovery for the full value of the goods originally taken, which would render defendants liable for the goods taken from them in the re-plevin actions — are both without foundation. As to the first, it appears that, although evidence of the enhanced values was given, the referee took only the values of the goods as of December 7, 1898, when they were transferred; and as to the second, the judgment distinctly shows that the referee held the defendants for the goods they admitted to be in their possession, and for the goods unaccounted for by them exclusive of the replevied goods, as to which this judgment was to be “without prejudice”; leaving the question as to whether the defendants should eventually account for such goods to be determined after the replevin action is decided.

We think, therefore, upon the whole case, that the judgment appealed from should be affirmed, with costs. All concur.