Bulger v. Rosa

• Decision Date: 25 February 1890
• Citation: 119 N.Y. 459,24 N.E. 853
• Parties: BULGER v. ROSA.
• Court: New York Court of Appeals Court of Appeals

119 N.Y. 459

24 N.E. 853

BULGER

v.ROSA.

Court of Appeals of New York.

Feb. 25, 1890.

Appeal from supreme court, general term, third department.

Replevin by Jeremiah Bulger against Isaac A. Rosa for goods seized by defendant as sheriff of Montgomery county, under an execution against John Bulger and John Sherlock, partners doing business under the firm name of Sherlock & Bulger. The judgment of the circuit court directing a verdict for defendant was reversed by the general term, (6 N. Y. Supp. 38,) and defendant appeals.

Nathanial C. Moak, for appellant.

Matthew Hale, for respondent.

ANDREWS, J.

The trial judge directed a verdict for the defendant, and the general term has granted a new trial, on the ground that the question of fraud in the sale from John Bulger to the plaintiff of the goods, personal property, and real estate, which formerly belonged to the firm of Sherlock & Bulger, should have been submitted to the jury. The general rule is well settled that in a jury case the direction of a verdict is only justified where the evidence conclusively establishes the right of the party in whose favor the direction is given. The test of the right to direct a verdict is whether the court would be bound to set a verdict aside as against evidence, if rendered against the party in whose favor it was directed. If this would be the duty of the court, the judge need not await the verdict before acting, but in advance may rule the question as one of law. But, as verdicts cannot be found on mere conjecture, neither will a shadow or possibility, nor a mere scintilla, stand in the way of ruling the case in favor of the party who shows a substantial right of which there is no substantial contradiction. Dwight v. Insurance Co., 103 N. Y. 341, 8 N. E. Rep. 654; Bagley v. Bowe, 105 N. Y. 171, 11 N. E. Rep. 386. The statute relating to fraudulent transfers and conveyances, which declares that the question of fraudulent intent arising thereunder shall be deemed a question of fact, and not of law, (2 Rev. St. 137, § 4,) does not, as now interpreted, interfere with the prerogative of the court to direct a verdict, provided the fraudulent intent is conclusively established on the face of the instrument of transfer, or by the uncontradicted verbal evidence. Edgell v. Hart, 9 N. Y. 213;Ford v. Williams, 24 N. Y. 359.

The defendant's counsel has presented a very learned and able argument in support of the view that the uncontradicted evidence established that the transactions resulting in the transfer to the plaintiff of the property of the firm of Sherlock & Bulger were fraudulent as against the firm creditors. The point here is, should this question have been submitted to the jury? The alleged fraud consists, as is claimed, in a scheme between the plaintiff and Sherlock & Bulger, by which Sherlock was to transfer his interest in the firm assets to his copartner, John Bulger, so as to enable the latter to transfer them to the plaintiff in payment of debts held by the latter against the firm, and also against John Bulger individually. It is undisputed that when these transactions took place both the firm and the individual members were insolvent, and that this was known to all the parties. There can be no controversy as to the rule of law governing the relations between an insolvent firm and its creditors, and their mutual rights in respect of the firm property. The partnership, as such, has its own property and its own creditors, as distinct from the individual property of its members and their individual creditors. The firm creditors are preferentially entitled to be paid out of the firm assets. Whatever may be the true foundation of the equity, it is now an undisputed element in the security of the firm creditors. The insolvent firm cannot apply the firm assets in payment of the individual debts of the partners, nor can the equity of the firm creditors be defeated by an attempted conversion of the assets of the firm into the individual assets of one of the partners through a transfer by one partner of his interest therein to the other. In either of the cases supposed, they would remain, as to the firm creditors, firm assets, which could be followed and taken on execution by the firm creditors, until they had come to the hands of a bona fide purchaser; and where an individual creditor of one of the members of an insolvent firm, knowing of such insolvency, takes a transfer of firm property in payment of his individual debt, his act is not merely a violation of an equitable right of the firm creditors, but it constitutes a fraud, under the statute of Elizabeth. The law regards it as a voluntary transfer made to hinder, delay, and defraud the firm creditors, and as to them is void. These general principles are established by many cases, but it is sufficient to refer to a few of them. Wilson v. Robertson, 21 N. Y. 587;Menagh v. Whitwell, 52 N. Y. 146; Ex parte Mayou, 4 De Gex, J. & S. 664...