
    Bernhard Cohen et al., App’lts, v. Ezekiel Plonsky et al., Resp’ts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed April 17, 1891.)
    
    Fraudulent conveyance—Complaint.
    The complaint, in an action to set aside a conveyance of bills receivable by A. to P. as fraudulent, alleged that A. was insolvent; that he had transferred his property and confessed judgments; that by sales under such judgments all his property had been sold at a sacrifice, and that upc the above transfer by A. to P. the latter had made a profit which he h-shared with A. The complaint was dismissed. Held, error. That suming that the bills purchased by P. from A. was the purchase of i debt, there still remained a question of fraud which should have be mitted to the jury.
    Appeal from a judgment dismissing the complaint, o' fore the special term. f
    
    
      George M. Pinney, Jr., for app’lts; H. Warley Platz stiel & Hirsch, for resp’ts.
    
   429.58 made by the judgment debtor to the other defendant in the action. It was charged in the complaint that this assignment was made with intent to hinder, delay and defraud the creditors of the debtor. This was denied by the answers of the defendants.

When the trial was brought on a motion was made by the defendants to dismiss the complaint on the ground that no cause of action was therein alleged. And the justice presiding stated that he did not think that the complaint stated a cause of action. But as it was alleged that the assignment of the bills receivable was made and received with the intent to hinder, delay and defraud creditprs, this was probably a misapprehension of its effect. Billings v. Russell, 101 N. Y., 226. But the action was not disposed of on that motion. And the plaintiffs’ counsel then made a full statement of his case, and in compliance with his request he was allowed to amend his complaint, by stating in it what he expected to be able to prove. And that was that the debtor was insolvent to a large amount, that on the same day this assignment was made he made another for about §5,000 of accounts; that on the same day he executed another assignment of accounts amounting to about the sum of $1,800 to the firm of which the other defendant was a member, and confessed two judgments, amounting together to about $6,500. And two days before these assignments and confessions of judgments, he also executed to the partner of the other defendant, a second mortgage on his property, for the sum of $5,000.

Executions were issued on the confessed judgments, upon which there was collected the sum of a little over $2,500. By these assignments, and the sales under the executions, all the property of the debtor was disposed of, leaving unsatisfied judgments against him of upwards of $75,000. It was also proposed to be proved that the defendant Plonsky received the assignment to him, for a demand of $5,300, which he purchased against the debtor for $4,000. That he received on the bills assigned to him more than he paid for the demand against the debtor, which he bought, and that part of this profit was turned over to the debtor. The court considered these facts insufficient to maintain the action, and dismissed the complaint. It was held that no cause of action was shown against the defendants. And the plaintiffs’ counsel excepted to the decision.

The legal effect of what in this manner took place was that there was no question of fraud presented, or which could be inferred by the court from the case the counsel offered to prove. And that is the nature of the order entered, on which the judgment was recovered. If by any view of the proof offered tiie action could be maintained, then the dismissal was erroneous. The dismissal as it was ordered was the same as a nonsuit at the circuit, which cannot be sustained when the evidence presents a question of fact for the jury. It has that effect and no other when it becomes the subject of review upon an appeal. Scofield v. Hernandez, 47 N. Y., 313; Van Derlip v. Keyser, 68 id., 443; Rousseau v. Bleau, 8 N. Y. Supp., 823; 29 N. Y. State Rep., 334; Noyes v. Morris, 56 Hun, 501; 31 N. Y. State Rep., 608.

The question therefore arises whether the court could not infer from this offer of proof, even though the demand purchased by Plonsky was a valid debt, that the assignment was made of the bills payable by the debtor to him with the intent to hinder, delay and defraud the other creditors of the debtor, as that was sufficiently alleged in the complaint. It is not requisite that the proof offered should require that conclusion to be adopted, but the inquiry is whether that might not fairly be done.

The case disclosed is that of a person in business, who proves to be insolvent in nearly the sum of $90,000, at the same time and after mortgaging his property, transferring by -assignments his bills receivable, and accounts, to three different parties, and confessing two judgments, under the executions on which all his other property was sold, realizing but little over $1,500, and sharing with the assignee the profits realized by the assignment in controversy. It would probably do no violence to these facts unexplained to infer that the assignment of the bills receivable was both made and received with intent to defraud the creditors of the assignor. The facts carefully weighed and considered would sustain that conclusion. It is not necessary that they shall certainly require it to be drawn, but that they will sustain it by close and careful scrutiny as a fair and rational result. And as the proffered evidence was sufficient for that object, a dismissal of the complaint, without considering the effect which as a matter of fact could be given to the offered proof, was erroneous.

The question'arising does not depend upon chap. 503 of the Laws of 1887, forbidding preferences of more than one-third of the assets of an insolvent debtor. To. present a case under that act the other assignees and the plaintiffs in the confessed judgment should have been made parties, for without them the court would not be at liberty to consider and decide whether this act had been violated. That was not the plaintiff’s case, but it was that the assignment of the bills payable was fraudulent, and that is all there was of the plaintiffs’ action. Upon that they were entitled to have their proofs received and deliberated upon by the court to ascertain whether this alleged fraud had been maintained. That was not done. And the judgment should be reversed and a new trial ordered, with costs to the plaintiffs to abide the result.

Van Brunt, P. J., and Lawrence, J., concur.  