Townsend v. Bogart

By the Court.*—Bosworth, Ch. J. These goods were sold to the defendants and delivered to them, and the firm has disposed of them. As they were obtained by fraud, an action of trover, or an action on the case for the deceit and fraud, will lie against all, although Bogart, as a matter of fact, was ignorant of the fraud. (Hawkins a. Appleby, 2 Sandf., 421-429 ; Locke a. Stearns, 1 Metc. (Mass.), 560.) [360] Cary a. Hotailing (1 Hill, 311) is an authority that trover will lie for the value of the goods on such a state of facts as the evidence establishes. Affidavits establishing such a cause of action, of themselves authorize an order to arrest and hold to bail. (Code, § 179, subd. 1.) Such a rule as applied to the partner not guilty of actual fraud, is no more severe than the one in force prior to the Code. In an action of trover a defendant was held to bail as a matter of course, without any order of the court-or of a judge authorizing it. (2 Rev. Stat., 3 ed., 48, § 8, subd. 4.) I do not think that the allegation in Yale’s affidavit, that this action is brought to recover the price of goods sold, justifies the inference that the plaintiffs’ complaint does or will state merely a contract of sale, a delivery, expiration of the term of credit, and non-payment of the-price; even if it be assumed, or would be true, that in an action in that form, Bogart could not be held to bail for a debt fraudulently contracted by his partners, he not being a party to the fraud. These affidavits detail the whole transaction, and I find nothing in the allegations referred to inconsistent with a purpose to declare in such form of action as will secure the right to hold all the defendants to bail. ¡Neither the contents of the summons nor those of the complaint are stated; the affidavits show that the price agreed to be paid is the sum sought to be recovered. „ But I think the affidavits should be liberally construed in this respect in favor of the plaintiffs, as they state facts enough to establish a cause of action which of itself gives a right to hold to bail; and as it does not appear that the plaintiffs have not stated or will not state such a cause of action in their complaint, nor that they are precluded by the form of their summons from doing so. But I am not satisfied that the defendant Bogart cannot rightly be held to bail under subdivision 4 of section 179 of the Oode. I think all the defendants were guilty of a fraud, within the meaning of that section, in contracting the present obligation. It is well settled that the fraud of one member- of a firm in obtaining goods which have gone to the firm’s use, is, in judg [361] ment of law, the fraud of all, in such sense that an action will lie against all of them for it, and that all are liable for the damages- caused by it. Bogart, as well as his copartners, contracted the debt; and he, as well as the others, was guilty of a fraud in contracting it, for the purpose of every civil remedy to obtain redress for such fraud (unless he be entitled to exemption from being held to bail for it). In the nature of things, he can claim no other exemption, and the question is, Is that secured to him by the Code? I cannot understand how it is that, on the same state of facts, the judgment of law is, that in an action based solely on the fraud, and to recover the damages caused by it, it is his fraud; but so far as his liability to be held to bail is concerned, he is guiltless of all fraud, and has neither committed nor assented to it. The Code does not, in terms nor by any fair intendment, make any such distinction. I think the language, “ when the defendant has been guilty of a fraud,” must be deemed to have been used in subd. 4, § 179, to designate and include all those who, by settled law upon a given state of facts as to the contracting of debt, are the persons contracting it, and who also have been guilty of fraud in contracting it. It is under this rule of construction that it has been held that a defendant in an action of orim. con., or for seduction, may be held to bail at the suit of the husband or father, as one who has done an injury “to the person” of the plaintiff. (Code, § 179, subd. 1; 4 How. Pr., 234; 3 Code, 9.) So long as the law imputes the fraud to him, and for the purposes of the civil remedy of the party defrauded declares it to be his fraud, I think he is as liable to be arrested and held to bail as if he had committed it in intent and in fact. This conclusion finds some analogy in the rule, that although an infant is not liable upon his contracts, yet an action for assumpsit will lie against him for money embezzled, as the court, in furtherance of justice, will look through the form of the action to the tortious nature of the transaction. (1 Esp., 172; 3 Pick., 492; 5 Hill, 391.) On another view, I think he may rightly be held to bail under subdivision 4. I think these affidavits show enough to justify [362] the inference, that he knew a fraud had been committed, and assented to it. The affidavit of Britton shows that the goods bought of his firm were sent to the defendants’ store, part on the 27th, and the rest on the 28th of July; they were bought for cash, to be paid on delivery of the goods, and that a bill for the price was sent with them, headed, in writing, “prompt cash;” that these goods were sent to Baltimore by the defendants immediately, and an advance of $2,000 obtained on them. The purchase of the plaintiffs was made, and the goods were delivered, on the 2d July, 25 days prior to the purchase from the Brittons. I think the inference a just one, that Bogart, being a partner, and nominally, the actual head of the firm, knew that these purchases had been made, and that the goods had been disposed of by the firm; that they had not been paid for, and that the firm had no means with which to pay for them, and could have had no intention of paying for them at the time they were bought. It requires great credulity to believe that he was ignorant of the repeated applications for payment made at the store through a period of six weeks, and did not learn, if he did not know when the goods were bought, that they were procured by fraud. And I think it a just conclusion, from the affidavits respecting the nature of the business which the defendants professed to transact, and that during this period they were not visibly doing any business in that line, that he was aware of and was expecting gains from the fraudulent operations in which all the other partners are shown to have been actively engaged. Jackson, and Jefferis were both asked on the 20th of September, if the plaintiffs could not in some way get the goods back. Jackson referred to Jefferis to give the answer, and Jefferis “ shook his head without saying any thing.” He was then asked if the goods were sold to Byerly. He said, “Tes, partly so and partly not.” This is some evidence of a demand of the goods and of a refusal to restore them. The effect of that is not doubtful. (Holbrook a. Wright, 24 Wend., 178.) Bogart does not choose to make any affidavit, or attempt to repel any one inference which would naturally be drawn from the character of these transactions and the fact of his being the head of the firm. [363] Under any view suggested, I think the defendant Bogart was rightly held to bail. The fancied severity of such a rule will find a perfect analogy in many other cases. Common carriers are liable in an action for an injury to the persons of individuals who may be injured by the negligence of their servants. (Bostwick a. Champion, 11 Wend., 571; 18 Ib., 175 ; Cotter a. Bettner, 1 Bosw., 490.) In such an action the defendant may be held to bail by § 179 of the Code. Whether the negligence was that of one of the parties only, or is that of a servant hired and paid by one partner only, as in Bostwick a. Champion, all the partners may be held to bail, although in the one case one partner alone did the wrong; and in the other, neither actually did it or assented to it. They, as well as the parties actually guilty, are held to bail, because in law they are all guilty of the wrong, on the same principle and in the same sense that in the present case are all guilty of the fraud practised on the plaintiffs. I think the order should be affirmed. Moncrief, J. In my opinion the arrest can be sustained on the affidavits, as establishing a case of trover and conversion, and that the complaint thus formed would be consistent with the affidavits. Moreover, a case is presumptively made out of adoption, acquiescence, and participation in the fruits of the fraud. I think a partnership raises of itself such a presumption, and the facts here stated strengthen such presumption. Hence, without saying that a copartner may not be free from liability to arrest in a plain case of entire innocence, and attempt or disposition to redress the fraud, I am of opinion that the arrest should in this case be sustained and the order affirmed. Footnotes [*] Present, Bosworth, Ch. J., and Hoffman, Woodruff, Moncrief, and Robertson, JJ.