Pine & Southwick v. Rikert

By the Court, S. B. Strong, J. There is no valid objection to the provisions of the assignment. The direction to pay “the debts” of the creditors of the assignor is in equivocal terms. The debts of a person may be such as are due to him, although the more usual signification is those owing by him. [476] It is not a palpable violation of the literal meaning of the words to apply them to the debts due to the persons designated, and we aire therefore authorized to look to the scope of the entire instrument, for their interpretation. The manifest design is to pay the debts to the creditors, and that must control the construction of the doubtful phrase. The evidence of the subsequent conduct of the parties to the assignment was strong to show that the whole transaction was for the purpose of defrauding the creditors of Wright the assignor, and it seems to have been so considered by the learned judge. The goods remained in the actual possession of such assignor; they were sold by him and his former clerks at private sale, and in the customary manner, by retail. His name was still upon the various signs of the store, and was so when replaced by that of the assignee. Some of the goods were sold to pay an old debt not included in the first class. His wife sold others, and under a direction from him to sell to a young lady any thing she might want. The assignee was examined as a witness, and it does not appear from his testimony that he sold a single article until he made the alleged sale to the plaintiffs ; nor does he give any reason for suffering the property to remain under the control, and subject to the disposal of the assignor. No inventory was made of the assigned goods, nor was there any list of the creditors ; and notwithstanding these most suspicious circumstances there was no affirmative evidence of good faith. Notwithstanding the invalidity of the assignment as it respected the creditors of the assignor, a sale, made by the assignee before they had obtained a specific lien upon the goods, to an innocent purchaser, for a valuable consideration, would be valid. It is considered as effected under the authority of "the original proprietor, who had still the right to sell the property. Were, then, the plaintiffs innocent purchasers of the goods in question, and for a valuable consideration 7 If they were, as the sale to them was before an actual levy under the execution produced by the defendants in their justification, they were entitled to the verdict which was rendered in their favor. [477] The plaintiffs were two of the four preferred creditors. One of them (Pine) had been previously concerned with the assignee as indorsers for the same person, to a considerable extent. Both were several times in Wright’s store after his assignment ; and while it was under his management the goods were sold to the plaintiffs, after executions against the original proprietor had been delivered to the sheriff, in one lot, at fifty per cent reduction from the prime cost, and comprised the entire remaining valuable stock. And the affair was managed so hastily that at the time of the alleged delivery the extent of the purchase was not known to either of the parties. The design to prevent a levy under the executions was palpable. If the plaintiffs had not at least doubted the validity of the assignment, why was their purchase made at that particular time, with so much haste and under such unusual circumstances? Ho money was paid by the plaintiffs, at any time. They gave their note for the price of the goods, as eventually ascertained, but it was after the levy had been made, and that must have been known to them. They did not wait (as prudent men would have, ordinarily; done) to ascertain whether-there would not be a failure of title; nor did they claim any credit by reason of Wright’^ indebtedness to them, which had been provided for in the assignment. Probably they had been advised that in order to defeat the execution they should advance some new and valuable consideration. The judge was requested by the defendant’s counsel to charge the jury that it was incumbent upon the plaintiffs to show themselves bona fide purchasers from the assignee; in order to protect themselves from the lien of the execution delivered to the sheriff before the sale ; that in order to do this they must show that they had, before the levy, paid a valuable consideration for the goods ; and that not having shown this they could not recover if the jury should believe that the original assignment was fraudulent. He refused so to ‘charge. He had before instructed the jury that the sale to the plaintiffs was invalid if there had been fraud in or under the assignment, known to them, or if it had not been completed by a delivery, previous to [478] the levy under the execution. He instructed them, however, that the requisite delivery had been proved. He had said nothing as to the necessary requisite to the validity of the sale, of the payment of a valuable consideration, or what the law deems an equivalent. The jury may have inferred that there was no necessity for the advance of a new and valuable consideration, to sustain the sale. The request of the defendant’s counsel, so far as it related to the consideration, was probably too broad, and their exception to the judge’s refusal to charge conformably to it, cannot be sustained. But it seems to me that the jury must have rendered their verdict under a misapprehension of the law. If not, it is against the weight of the evidence. [Dutchess General Term, April 8, 1856. The verdict should be set aside, and there should be a new trial. Costs to abide the event of the suit. Brown, S. B. Strong and Rockwell, Justices.]