« PreviousContinue »
Arguments for Appellants.
and the uncontradicted evidence showed that it was neither organized or carried on for such purpose. The fact that the jury may choose to discredit evidence not impeached and not incredible on its face, is no reason for submitting it to them, (25 N. Y., 361.)
IV. The question put to Isaac Reeve, viz., “State what representations Montgomery made to you when you were about to become a partner, about the solvency of the firm ?” and the answers thereto, were erroneously admitted by the judge; because,
1st. They related to no issue between the parties.
2d. They introduced new matter that must have been detrimental to the defendants. (12 Wend., 64.)
3d. The court having admitted the testimony, the jury, of course, considered it to be relevant, and therefore the defendants were obliged to answer it, in doing which a mass of testimony was introduced upon a foreign issue, upon which the jury passed, to the neglect of the true issue.
V. The exception to the question, “How soon after these papers were executed did you commence business in your own name?” and to the evidence of the assignment from Montgomery to Grant, are well taken ; because,
1st. Such acts of Montgomery could not affect the interests of the defendants as creditors ; and the judge so charged. But the evidence was calculated to produce an impression on the jury unfavorable to the defendants.
2d. Montgomery's interest was a stockholder's interest only, and could not have been sold by Booth on execution. (18 How., 512; 3 Sandf., 692.)
3d. Montgomery being a trustee, could neither sell to him. self or assign to others, nor suffer the property to be levied upon as against himself. (31 Barb., 641; id., 407; id., 553, and cases cited : 20 How., 199; see 38 Barb., 622.)
VI. The examination of Lawrence as to the execution in favor of Bridges, was erroneous; because,
1st. Admitting that the transfers to the company were void as to Bridges, that does not prove that such transfers were made to hinder, delay and defraud Booth. (2 R. S., 137, $ 1.)
Arguments for Appellants.
2d. Booth was secured by mortgage on property, his debt being one-quarter of the sale price thereof; therefore, no transfers could injure his security, or hinder, delay or defraud him.
3d. Booth lay still, with two notes due, from January, 1858, till late in 1859, and thereby assented to the transfer, still holding all his security, though part of his debt had been paid. (1 Hill, 302; 1 Denio, 74.)
4th. Evidence that the plaintiff's debtor was insolvent naturally had its effect upon the jury, but could not legally operate to the detriment of the defendants.
VII. The judge erred in refusing to charge as requested by the fourth, fifth and sixth requests; because,
1st. Lund was not the debtor of Booth.
If the company were formed to defraud Booth, it did not affect Lund's property, but only Montgomery's interest; the company being void, the partnership revived, and no more than Montgomery's interest could be sold. (38 Barb., 574; 1 Comst., 47.)
If it should be held that Booth bought Montgomery's interest only, and Bunce & Co. bought Lund's interest only by their several executions, then Booth became tenant in common with Bunce & Co., and one tenant in common cannot maintain an action against his co-tenant. (15 Johns., 179; 9 Barb., 500.)
2d. The Court of Appeals held that if the formation of the company was void, then the copartnership revived. If this is admitted, then Booth took the interest of Montgomery, incumbered with the firm debts, and the recourse of Bunce & Co. was necessary to the property in the hands of Booth. (2 Penn., 198; 24 Wend., 405.)
And Booth had no right to withdraw such property from the execution of the creditors of the firm. (1 Wend., 313.)
Hosmer, Ch. J. (4 Conn., 540), says, if the creditors take the property for the debt of one partner, he assumes a liability to the demands of the creditors of the firm upon him.
Justice COWEN utterly denies, in the whole of 24 Wend., 389, that an action of trespass or trover can be maintained
Arguments for Respondent.
by the purchaser of a partner's interest against the sheriff or firm creditors, and concludes by calling it a novel remedy.
VIII. The whole of the charge, in the language of Judge Lott, is erroneous, because,
1st. The judge refused to restrict it, or instruct the jury as directed by the Court of Appeals.
2d. It is contradictory to the charge of the court, and brings in other creditors than those of Montgomery and Lund, while that part contrary to the Court of Appeals excludes Lund from any interest in the property.
IX. The judge erred in directing the jury to find the present value of the engine, because,
1st. The value of the engine, when taken, was $350, and the measure of damages is that value and interest. That, according to 26 Barb., 650, is the measure of damages for taking personal property.
2d. This action is not trover, or for detaining personal property, where the highest price may be the measure of damages. The complaint can leave no doubt that the action is for trespass.
3d. There is no evidence of any conversion on the part of the defendants McLeod or Windle, they are the sheriff indemnitors only; the action of trover cannot be maintained without such conversion. (See 5 Denio, 92.)
X. The jury found a verdict against all the evidence, and without any evidence to sustain it; and the judge erred in not granting a new trial on motion, and the General Term erred in affirming the order denying the new trial, as well as in affirming the judgment.
R. W. Van Pelt, for the respondent.
I. It is stated in subdivision 2d of appellants' first point, “that the plaintiff does not attempt to show that the corporation was organized to hinder, delay or defraud him; on the contrary, it was proved that he had security on the whole machinery for the payment of one-quarter of its value.”
This is certainly an extraordinary statement in view of the evidence.
Arguments for Respondent.
On January 1, 1857, Booth's claim was $4,430, $965.32 of which was due and payable on that day. The machine company was organized October 20, 1857.
The utmost value of the property covered by the chattel mortgage was $2,000 to $2,500, leaving Booth an unsecured creditor to at least the amount of $2,000.
Montgomery & Co. were in embarrassed circumstances prior to and at the time of the formation of the company. They had been sued by Bridges & Bro. on a claim of $1,100. The sheriff could not collect the execution of Bridges & Bro.
Lund expressly testified that one of the objects of forming the machine company and transferring the property of Montgomery & Co. to it, was to keep the property and make enough to pay the debts, which they hoped to be able to do.
Under the pressure of such embarrassments the machine company was organized. It consisted of five trustees, all bankrupts, namely, Montgomery, Lund, Emerson, Jones and Oaksmith.
Emerson & Co. had just failed for $20,000. They turned .out some patterns to the machine company worth from $1,200 to $1,500, instead of applying them to the payment of their own debts, and for which they received $90,000 of the stock of the company, which stock they subsequently, October 21, 1858, made over to Montgomery.
Oaksmith was the assignee of Emerson & Co., and continued their business after the assignment.
He had but one share of the stock.
The machine company was organized at the suggestion of Montgomery & Co., to save the large commissions which had made the firm of Emerson & Co. 80 rich.
Lund had his share of the stock, one-quarter, being 480 shares of $100 each, issued in the name of his mother-in-law, . Mrs. Treat, and taking one share in his own name so as to be qualified to act as trustee.
Montgomery's three-quarters was issued to his father, his wife and children, excepting one share which he had in his own name so that he could act as trustee. He was also president of the company, and had the sole charge and con
Arguments for Respondent.
trol of the business, which went on the same in all respects as before the formation of the company, except it was in the name of the
company. The value of all the property transferred by Montgoinery & Co. and Emerson & Co., to the machine company, was less than $30,000, which constituted the entire assets and capital stock of the company.
The trustees made the affidavit required by law that the capital stock of said company ($250,000) was fully paid in on 31st October, 1857.
Montgomery, in the spring of 1859, resumed business in his own name. He put up in large letters over his place of business in Pine street, “Wm. Montgomery's Yonkers Machine Works." The machine company's sign was on the panel of the door; when the door was open (which was all the time in the spring and summer), you would have to go in the store to see it. Bunce & Co. knew all about the organization of the company.
Montgomery afterwards made an assignment of the whole concern for the benefit of his individual creditors, including, the firm of J. E. Bunce & Co., and preferring them. Bunce & Co. then signed the compromise paper and consented that Montgomery should have the property surrendered to him by his assignee—so that he could carry on his business as formerly. Surely in view of such facts and a multitude of others equally significant, it would have been extraordinary if the jury had failed to discover fraud.
The fraudulent character of the machine company being thus conclusively established, the organization is swept away, and the trifling interest of Lund in the engine in question, if he had any at all, still remains in him.
On what principle of law, equity or common sense, can it be claimed by defendants that they have succeeded to this interest of Lund's, under their execution sale on their judgment against the machine company?
II. The complaint should not have been dismissed " because the engine was manufactured by the machine company,” nor is such the fact according to the evidence.