
    Davis W. Shuler and William S. Shuler, Respondents, v. Birdsall, Waite & Perry Manufacturing Company, Defendant. Elmore G. Page, as Temporary Receiver of Birdsall, Waite & Perry Manufacturing Company, Appellant.
    
      Attachment — allegations that a corporation seelcs. the appointment of a receiver, is insolvent, has depleted its stock in trade and that, its president has drawn large sums from it, are not sufficient—fraud is not presumed—personal knowledge .of facts must be inferable from those stated.
    
    If the facts stated in an affidavit made to procure an attachment are as consistent with an honest intent as they are with a fraudulent one, fraud may not be inferred from them.
    The mere averment, in such an affidavit, of facts as upon personal knowledge, is insufficient, unless circumstances are stated from which an inference can be fairly drawn that the affiant has personal knowledge, of the facts which he avers.
    In an affidavit' on which a warrant of attachment has-been granted on"the ground that a- corporation has assigned, disposed of and secreted its property and is about to do so, with intent to defraud its creditors, such intent is not shown by the allegation that the corporation is insolvent and is, hy means of a pending action, endeavoring to" have a receiver of its property appointed — the effect of
    ■ such appointment being to afford to all the creditors .equal protection.
    Mor is the alleged fraudulent transfer and secretion of its property established hy the further allegation of the affiant that the directors of the corporation, after consultation, had shipped away unusually large quantities of manufactured material; that the president of the corporation had been drawing out large sums of money for his pérsonal use, and that the corporation was owing about §30,000, and there were but few book accounts.
    Such an act on the part of the president would be an act in fraud of the corporation and would not necessarily impute fraud to it.
    Appeal by Elmore G. Page, as temporary receiver of-the Birdsall, Waite & Perry Manufacturing Company, from an order made by the county judge of Broome county, and entered in the office of the clerk of the county of Broome on the • 16th day of February, 1897, denying his motion to vacate a warrant of attachment issued hy said judge against the property" of the defendant, a domestic corporation. ■
    The motion to vacate was made on the original papers upon which the attachment was granted, find the ground of the motion was the insufficiency of the affidavit of William H. Son upon which the attachment was granted.
    
      Elmore G. Page, appellant, in person.
    
      T. B. c§ L. M. Merchant, for the respondents.
   Merwin, J.:

The question on this appeal is whether the affidavit upon which the attachment is based is sufficient to authorize it. The affidavit and warrant are dated December 11, 1896.

It appears that the plaintiffs are copartners doing business at Amsterdam, N. Y., and the defendant is a domestic corporation, having its place óf business in the village of Whitney’s Point, N. Y. The plaintiffs’ cause of action is based upon two promissory notes executed and delivered by the defendant at Cortland, N. Y., payable to the order of plaintiffs one month after date, one for $95.50, dated November 3, 1896, and the other for $300.32, dated November 6, 1896. The execution and delivery of the notes, their non-payment and protest, and the amount due thereon over and above all counterclaims, are set out in the affidavit.

The ground of the attachment, as stated in the warrant, is that the defendant had assigned, disposed of and secreted, and was about to assign, dispose of and secrete, its property with intent to defraud its creditors.”

■ The main, if not only, fact stated upon which to base the allegation that defendant is about to assign, dispose of and secrete its property, is that the defendant, being insolvent, is trying to have a receiver appointed, and a suit, is pending for that purpose. This fact does not sustain the allegation of an intent to defraud creditors, but rather the contrary. By such an appointment all the creditors are afforded equal protection.

In support of the allegation that the defendant had assigned, disposed of and secreted its property with intent to defraud its creditors, it is positively stated in the affidavit that about three weeks ago the defendant knew that it was insolvent and unable to pay its debts, and the directors and officers had a consultation, and since that time they have been shipping away unusual large quantities of manufactured material, and that the president of defendant had been drawing out large- sums of money for his personal use.” It is also stated by the affiant from information derived from one Davy, foreman of the trimming shop, and Mr. Perry, one of the officers of the defendant, but what one is not stated, that within the past few" days manufactured material in unusual quantities' had been shipped to one Whitney, of Cortland, of the value of several thousand dollars, and about ten carloads. It is also' stated by the affiant- that with conversations that he had with John Dickinson, and from George Seymour -and other parties around the village of Whitney’s-Point,” he ascertained that defendant had been shipping away most all of its manufactured material within the last three weeks, and had depleted its stock so that there was very little desirable left; that he then went into the factory and looked through it and ascertained that there was not more than $2,000 in value of stock, and all it had left was this stock, plant and a few book accounts, all hot to exceed in value $4,000 or $5,000. The' affiant had previously stated that he was informed that the president had taken away-the books of the defendant. The affiant also positively stated that the defendant was owing about $20,000.

The question arises as to how much weight should be given to-the positive statements of. the affiant. It does not appear where he resides. He states at the commencement of his affidavit that he is the general manager and agent for the plaintiffs, is fully acquainted-with all the plaintiffs’ business, has full knowledge of all the facts- and transactions thereinafter set forth. If, as may be inferred, he resides at Amsterdam, where the business of the plaintiffs is located, his personal knowledge of what occurred at Whitney’s Point in Broome county prior to his arrival there, as he says, on December 9, 1896, is not apparent

In Hoormann v. Climax Cycle Co. (9 App. Div. 579) the rule is-laid down that the mere averment of facts as upon personal knowledge, in an affidavit made to procure an attachment, is not sufficient Unless circumstances are stated from which the inference can be fairly drawn that the affiant has personal knowledge of the facts which he avers. This is á reasonable rule, and applying it here, the positive statements of the affiant, -that the directors of the defendant after a consultation shipped away unusual large quantities of manufactured material; that the president of defendant had been drawiug out large sums of money for his personal use; that the defendant was owing about $20,000 and there were but few book accounts, are entitled to but little weight.

ít may be assumed that within a short time manufactured material in unusual quantities had been shipped to Whitney of Cortland. If so, it remained at a known place within the jurisdiction of the court and where the notes to plaintiff were given and where one of them was payable. It does not appear what the goods were or what kind of goods the defendant manufactured, or where they were usually sold or marketed, or what the position of Whitney was with reference to defendant. Shipment from the factory would ordinarily be in the direct line of á manufacturing business, and the fact alone that the amounts were unusual would not be sufficient to sustain the allegation of fraud. From the affidavit, taken altogether, we cannot assume that shipments were made to any other place than to Cortland, or that the shipments were made for any other purpose than for sale or market.

Assuming that the president of defendant drew out large sums of money for his personal use, it would not follow from that fact alone that the corporation would be chargeable with fraud. An act in fraud of the corporation would hardly show fraud on the part of the corporation. (See First Nat. Bank v. Wallace, 4 App. Div. 382.)

The shipment of goods and the acts of the president are the main circumstances bearing on thé alleged fraudulent transfer or secretion of defendant’s property. Significance is claimed for the information imparted to the affiant by one Knickerbocker, engineer, that the president of the company had gone away with a satchel containing the books of the defendant. If, as the affiant was also informed, the president was engaged in consultation with his attorneys with a view of having a receiver appointed and a suit was pending for a receiver, it is not strange that the president should have the books of the company, and a dishonest intent would not be inferable. Tire engineer also told the affiant that he was instructed to lock the plant up . and keep the keys until called for by the receiver. '

To authorize an attachment upon the ground alleged there must be actual or intended fraud. (Casola v. Vasquez, 147 N. Y. 258.) If the facts stated are as consistent with an honest intent as they are with a fraudulent one, fraud may not be inferred from them, (First Nat. Bank v. Wallace, supra.)

The affidavit is, we think,' not sufficient' to authorize the conclusion that the corporation had assigned or disposed of or secreted any of its property, or was about to do so,-with intent to defraud its creditors.

• It follows that the order appealed from should be reversed.

. All concurred. ■

' Order reversed, with ten dollars costs and disbursements. Motion to vacate attachment granted, with ten dollars costs.  