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Scheitlin agt. Stone.

these words: "And these defendants further answering said complaint, say, that at the time of said sale of said merchandise, alleged in said complaint, they were embarrassed in their financial affairs, and were unable to meet their liabilities as they became due and payable, and were obliged to ask their creditors for an extension, but these defendants did not consider or believe that they were insol vent. They owed confidential debts, which it was their duty to pay in preference to others, and said sale was made in order that said property should not be sacrificed, and that the confidential creditors of said E. Stone & Co. should get the avails of said merchandise, and for no other purpose; and these defendants aver that the confidential creditors of E. Stone & Co., received the avails of said sale of said merchandise; that the notes of said Stone & Hall were immediately turned out in payment, or as security to the confidential creditors of E. Stone & Co., and that said notes have been paid by said Edward F. Stone and John M. Hall, as they have matured, to the creditors of the said E. Stone & Co."

On the trial at special term, a large amount of evidence was given on the part of the plaintiffs, to show that the sale was fraudulent. The justice who tried the case, found as a fact that the plaintiffs recovered the judgment alleged in the complaint for the indebtedness, and the amount and at the time alleged in the complaint, and that executions were issued and returned unsatisfied, as alleged in the complaint. He further found as a fact, that the firm of E. Stone & Co. sold the stock of goods in the complaint alleged, to the other defendants, Stone & Hall, at the time and for the prices therein alleged, and upon the credit therein specified, and that sale was made in good faith, and for a good and valid consideration. He also found that the sale was not made to hinder, delay or defraud creditors, and ordered judgment for the defendants, dismissing the complaint with

Scheitlin agt. Stone.

costs. From the judgment in pursuance of this order, the plaintiffs have appealed.

HENRY NICOLL, for appellants.

R. M. HARRINGTON, for respondents.

INGRAHAM, P. J. I see nothing in the transaction in this case, upon the contract as made between the parties, which will warrant us in setting aside the sale. The purchasers deny all knowledge of a fraudulent intent; they show that the sale as made, was the best mode for getting the highest price for the property sold, and that the notes when sold, were paid over to the creditors, and have all been paid by the makers. I know of no principle of law that prevents a party who is involved in debt from selling his property, nor from making such sale on credit, nor from taking the notes received for his goods and paying his creditors with them. If a creditor chooses to receive a note in payment of his claim, he is not hindered or delayed in its collection. His debt is paid as soon as he receives the notes in payment. Nor can I see any wrong in selling on credit, if thereby the debtor is able to pay two debts, when by a sale for cash, he would only be able to pay one creditor.

The justice who tried the cause found that the sale was made in good faith, for a good consideration, and was not made to hinder creditors, or to defraud them. Under such findings, it is impossible to hold the sale to be void. Until the courts go so far as to hold that all sales made by a debtor in failing circumstances are void, I can see no reason for so holding in this case; and when such a rule is adopted, it will render it necessary for every purchaser of goods, before he makes a purchase, to institute an inquiry into the solvency of the vendor. If a man who purchases without notice, for a good consideration, and without any intent to hinder or defraud creditors, cannot be protected by the law, there will be no safety in commercial transac

tions.

Scheitlin agt. Stone.

The statements in the answer of the firm who sold the goods, are not evidence against the purchasers in whose favor the judge found on the trial, even if they admitted a fraudulent intent on their part. The purchasers had no such intent, and knew nothing of any fraudulent transaction. As to the findings of fact by the judge, I think they were warranted by the evidence, and I concur with him in the conclusions to which he arrived.

I think the judgment should be affirmed.
CLERKE, J., concurred.

SUTHERLAND, J., dissenting. It is impossible to sustain the transaction, even on the answers. The statute declares void every conveyance, &c., "made with the intent to hinder, delay or defraud creditors," &c. The necessary effect or result of the transaction, as avowed in the answers, was to hinder and delay creditors. The parties must be presumed to have intended the necessary effect or result of the transaction. Even the favored creditors, to whom the notes were turned out, were obliged to take the notes and wait until they matured, or get nothing. Take the statement of the transaction in the answer of the defendants composing the firm, and it cannot be supported without evading the statute. They say that the sale was made to prevent the property from being sacrificed, and that the confidential creditors should get the avails; but as I have said, even the confidential creditors could not get the avails until the notes matured, and the necessary effect was to hinder and delay even them. It is quite immaterial how good or pure, in a moral aspect, the motives of the defendants may have been. The giving of the notes did not make E. F. Stone & Hall purchasers for value. When this action was commenced, by their own answer, they were not purchasers for value, except to the extent that they may have actually paid their notes.

Without examining the evidence on the question of

People ex rel. Fitch agt. Mead.

fraud in fact, or other questions in the case, I think then that the judgment should be reversed and a new trial ordered, with costs to abide the event.

SUPREME COURT.

THE PEOPLE ex rel. MOREL L. FITCH agt. JAMES MEAD, Sheriff of Cayuga County.

A county judge clearly has jurisdiction in proceedings supplementary to execution. Where a judge before whom proceedings supplementary to execution are pending, makes an order appointing a receiver of the debtor's property, and files the same, together with the testimony taken on the examination of the judgment debtor, in the county clerk's office, before the examination of the judgment debtor is finally concluded, the judge does not thereby lose jurisdiction of the person of the judgment debtor, nor his power to commit him for contempt in refusing to answer questions on his further examination.

In analogy to the former practice in chancery upon filing a creditor's bill and the appointment of a receiver, the judge may now appoint the receiver at any time while the proceedings are pending before him, in his discretion.

Monroe Special Term, March, 1865.

Proceedings upon habeas corpus.

THE writ was allowed by one of the justices of this court, and made returnable in special term. The petition upon which the writ of habeas corpus was granted, states that the relator is imprisoned by the sheriff of Cayuga county, upon a process or commitment issued by the county judge of Cayuga, as for a contempt on the part of the rela tor in refusing to answer certain questions put to him on his examination on supplemental proceedings before said judge. It appears from the petition and proceedings, that a judgment was duly recovered by the Auburn Exchange Bank against the relator, in the supreme court, upon which an execution had been duly issued, which was returned unsatisfied.

Upon this proof to him prescribed under section 392 of

People ex rel. Fitch agt. Mead.

the Code, an order was duly made and served, requiring the relator to appear before the said county judge, and submit to an examination in respect to his property, supplemental to said execution. The relator duly appeared before the said county judge, in pursuance of said order, on the 20th of December, 1864, and such proceedings were then and by consent of parties adjourned, and were thereafter by successive adjournments, continued down to the 20th of Jan., when another defendant in said judg ment was examined, and further proceedings adjourned till the 25th, when a witness was examined on the part of the judgment creditor, the relator being sick and unable to attend; that the relator appearing was examined on the 27th of January, under said order, and further proceedings then adjourned by consent till the 28th, when other wit nesses were examined on the part of the plaintiff in the execution; that on the 30th of Jan., the said county judge made an order appointing a receiver of the property and assets, and effects of the relator, and the proceedings were further continued by adjournment till the 10th day of March, and that on that day the relator appeared by his counsel before the said county judge, pursuant to said adjournment, and the plaintiff proposed further to examine the relator, which was objected to by his counsel, on the ground that the proceeding was ended by the appointment of the said receiver, and insisted that the proceedings supplemental to an execution had been completed and ended, and on the further ground that the said county judge had no jurisdiction in the matter; but the county judge holding otherwise, the proceedings were adjourned till the 21st of March, when the relator personally appeared before the said county judge, and the counsel for the plaintiff proposed to continue the examination of the said relator, and for that purpose put to him certain questions in regard to his property, to which the counsel for the said relator objected, on the ground above stated, insisting that upon

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