Field v. Holzman

• Citation: 93 Ind. 205
• Decision Date: 12 February 1884
• Docket Number: 9970
• Parties: Field et al. v. Holzman et al
• Court: Supreme Court of Indiana

93 Ind. 205

Field et al. v. Holzman et al

No. 9970

Supreme Court of Indiana

February 12, 1884

From the Miami Circuit Court.

Judgment reversed.

B Harrison, C. C. Hines, W. H. H. Miller, H. J. Shirk, J Mitchell, -- Rickle, -- Smith, K. G. Shryock, M. L. Essick and G. W. Holman, for appellants.

J. S Frazer, W. D. Frazer, R. P. Effinger and J. S. Slick, for appellees.

OPINION

Elliott, J.

The appellants are members of many different mercantile firms having claims against George Holzman for goods sold him, and all united in one complaint against the appellees.

The separate claims of the different firms are set forth in the complaint, and it is alleged that Max Feder is the father-in-law of Holzman, and that Louis Feder and Max Silverburg are his brothers-in-law; that these persons entered into a conspiracy to defraud the creditors of Holzman, and, to effect this purpose, agreed that he should buy on credit a large quantity of goods, and take them into his store at Rochester; that before the expiration of the time of payment, the goods should be seized on execution issued on fraudulent and fictitious claims, fabricated by Holzman's confederates; that, in execution of the scheme of the conspirators, Holzman executed to his father-in-law his promissory note for $ 6,500, and to his brothers-in-law a note for $ 1,500, who assigned it to the debtor's father-in-law; that these notes were without consideration and executed for the fraudulent purpose of cheating creditors; that Max Feder brought suit against Holzman, and in his original complaint claimed judgment for only $ 650, but, a few days before the return day, filed a substituted complaint demanding judgment on the notes heretofore mentioned, and that this course was pursued for the fraudulent purpose of concealing the true design of the defendants; that Max Feder obtained judgment for $ 8,200, issued execution and caused it to be levied on all of Holzman's property. Following the allegation that the sheriff is about to sell, is this averment: "And these plaintiffs aver and charge that by reason of the conspiracy existing between said defendants, there is imminent danger that as soon as it is discovered that a contest is to be made with regard to the validity of said judgment that the defendant will cause the execution to be returned, and the goods removed from said town and out of the reach of the plaintiffs." Immediately following the statement of reasons why notice should not be given, but following in logical connection with the allegation set forth, is this averment: "And that were such notice to be served there is great danger that said defendants would avail themselves of such notice to remove such goods beyond the jurisdiction of this court." The prayer is for an injunction restraining the sale or removal of the goods, and for judgment for the amount due the plaintiffs respectively.

The allegation contained in the first quotation from the complaint can not be justly regarded as a mere assignment of a reason for issuing a restraining order. It should be treated as a substantive averment of a material fact constituting part of the cause of action. It is true that the pleader uses the singular, "defendant," instead of the plural, "defendants," but we do not think that this should confine the allegation to one of the defendants to the exclusion of all the others. The frame and drift of the complaint, the statement of the facts constituting the cause of action, and the form of the concluding portion of that pleading, show very plainly that the allegation applies to all of the defendants.

It can not be doubted that one who buys goods on credit, not intending to pay for them, but having previously entered into a conspiracy to place them beyond the reach of creditors, is guilty of a gross fraud; nor can it be doubted that those who conspire with him to accomplish that purpose are also guilty of fraud. It is clear to our minds that the complaint shows fraud on the part of all of the appellees. It is also clear to us that it shows that the fraudulent acts of all the appellees unite in a common injury to the appellants. This we say because the complaint avers that the conspirators will, unless prevented by the court, place the property of the debtor beyond the reach of creditors, and this would injure the appellants by depriving them of property out of which to make their claims. The complaint at least shows a right against the brothers-in-law, Max and Louis, to an injunction restraining them from removing the property of their confederate from the jurisdiction of the court, and, as it shows a right to some relief, it is good as against a demurrer.

The property of the debtor Holzman was liable to the claims of his creditors, and in its preservation from seizure, pursuant to the scheme of the appellees, all of the creditors had an interest. The property which was seized under Max Feder's execution belonged, according to the complaint, to the debtor of all the appellants, and they had a common right to prevent its removal from the jurisdiction of the court. They had a right to have their debtor's property subjected to the payment of their claims, and they were entitled to joint relief against the fraud sought to be perpetrated by the removal of their debtor's property. The claims of the appellants are, it is true, separate, but their right to relief against the fraudulent scheme to keep from them their debtor's property is joint. They were, therefore, jointly interested in the relief demanded, and this entitled them to unite as plaintiffs. R. S. 1881, section 262; Ruffing v. Tilton, 12 Ind. 259; Pom. Rem., sections 266, 267, 268; 1 Dan. Ch. 235.

It appears from the statements of the complaint that Silverburg and Louis Feder did take an active part in carrying into effect the purpose of the conspiracy, for it is charged that they received from Holzman a fictitious note and assigned it to their father-in-law, thus enabling him to swell the amount of his claim against Holzman. As Silverburg and Louis Feder had joined in the conspiracy, they became responsible for all that their fellow conspirator did before the consummation of the purpose for which it was formed. His acts were, in legal contemplation, theirs, and the fraudulent acts charged...