Dennistoun v. Malard

The judgment of the court was pronounced bjr Seidell, J. The plaintiffs leased to Malard a shop in tho city, and while he was in possession, on tho 14th day of January, 1843, being in insolvent circumstances, ho executed to John Hunt & Co., who were his creditors, and represented by an agent at New Orleans, a notarial bill of salo of all his stock in trade, then on the leased premises. The items forming tho consideration of tho sale wore all antecedent debts. Malard,, however, remained in possession of the store for several weeks. Tho understanding between him and Hunt & Co. seems to have been, that he should continue tire business and account to Hunt & Co. for the proceeds of the sales, after applying small sums first for his family oxpenses and his small debts. Malard’s sign was continued on tho outside of tho shop; but a sign was put up inside representing Malard as tho agent of Hunt Sy Co. Subsequently, and about the middle of February, Malard ceased to act in tho store, some dissatisfaction arising between him and Hunt ¿j- Co. who put there an agent appointed by themselves, Malard’s sign still remaining and his clerks continuing to act there. A few days before the institution of this suit, between sunrise and breakfast time, Hunt & Co. carried off all the stock of goods-, and then the plaintiffs, who had never had any notice of the transfer to Hunt & Co., though Hunt & Co. appear to havo known that the rent was unpaid, obtained a sequestration; but the shop was found empty, and the goods could not be traced. Soon after, upon discovering the notarial sale, the plaintiffs, by a supplemental petition, made Hunt & Co. parties, charging the invalidity of the assignment as a fraudulent preference, and also charging a fraudulent combination between Malard and Hunt Sy Co. to deprive them of tho landlord’s lien. Brewster, another creditor for a small amount for goods sold, intervened, and joined with tho plaintiffs in their suit to set aside the assignment. The court gave judgment in favor of the plaintiffs and intervenor; and the defendants, Hunt Sy Co., havo appealed. Wo entirely agree with tho judge of the court below in the conclusions to which he camo, both that the assignment was a fraudulent preference by an insolvent debtor, and that there was besides a breach of good faith towards tho [16] landlord, and a violation of his rights in the removal of the goods. We consider tho court below aa justified in the opinion, that the agent of Hunt Co. was aware that the lessors had not been jxaid, and that the object of the-removal was to defeat their lien. It is said that the lien was gone, because it was not exercised within the fifteen days by a levy on the property, and that the alleged lien of Hunt & Co., as vendors of the goods, must be preserved to them, even if the assignment be sot aside. It is not proved that this alleged lien of the vendor existed on the whole of the goods, por indeed, as the case is presented, would we be able to say whether it existed at all: for Hunt Sf Co. being a New York house, tliero is strong reason to infer that the sale to Malar cl was made there. But, however this may be, it is clear that the landlord’s lien is superior to that of the vendor’s, who has made a delivery; and it cannot be contended that Hunt Sf Co. could place themselves in a better position, by fraudulently removing the goods beyond the landlord’s reach and frustrating his' search. To recognize such a doctrine would be to say, that a party could, by lxis own wrong, place a fair creditor in duriori casu. Three or four days after the removal, the sheriff was started in pursuit of the goods, and his return is as follows, to the wx'it by which he was commanded to seize them: “Rec’d, 2nd March, 1843. Nothing could bo found; all the within mentioned property having been removed to parts unknown either to plaintiffs or sheriff.” That Hunt & Co. did not tlxomselves do the acts complained of, is no defence, What was done, was done by their agent, in tho management of their business aixd the prosecution of their interests, and they are equally responsible for its legal consequences. They do not repudiate the assignment, but claim under it, and hold on to tho abstracted property. It is contended that tho amount of the goods was not equal to the amount of the judgments rendered. Tho evidence on this point is conflicting, but wc aro not able to say that thex’O was xxxanifest ex’ror in the finding of the court bolow. Tho judge of tlxo Commercial Court, who heard tho witnesses, thought tho value was large enough to cover the complaining creditors; and the conduct of the defendants in secreting the property, and thus preventing a more accurate estimate of its value by impartial witnesses, gives a bad grace to their application in tho appellate court for a reduction. See Civil Code, arts. 1965, 1972, 1977, 3185, 3230. Judgment affirmed.