In re New York Commercial Co.
| Decision Date | 09 November 1915 |
| Docket Number | 8. |
| Citation | 228 F. 120 |
| Parties | In re NEW YORK COMMERCIAL CO. |
| Court | U.S. Court of Appeals — Second Circuit |
W Roberts, of New York City, for appellants.
John W Ingram and J. M. Hartfield, both of New York City (James J Porter, of New York City, of counsel), for appellees.
Before LACOMBE, WARD, and ROGERS, Circuit Judges.
Desmond & Robinson had been for some two years selling crude rubber to the New York Commercial Company for cash. The company's course of business with others was to buy on credit for ten days after delivery, which was also the custom of the trade. For two months immediately preceding the sale now in question, Desmond & Robinson had sold the company 26 lots of rubber, of the aggregate price of some $330,000, or an average price of each lot of about $13,000. These transactions, though perhaps large from the point of view of Desmond & Robinson, were small in the business of the Commercial Company.
January 15, 1913, the last sale was for ten tons of rubber at ten days' credit after delivery, and February 8th there were delivered on account of it about two tons, of the value of $4,469.12. February 15, 1913, the company was put into the hands of a receiver in a judgment creditor's action in a court of the state of Virginia, who was subsequently made ancillary receiver by the Supreme Court of the state of New York. May 14, 1913, the company was adjudicated a bankrupt in a voluntary proceeding instituted in the District Court for the Southern District of New York and trustees were duly elected.
Desmond & Robinson demanded a return of the rubber sold, both of the state receiver and of the trustees in bankruptcy, and filed this petition of reclamation on the ground that an officer of the Commercial Company, well knowing its insolvency fraudulently represented to the claimants that it was solvent, and thereby induced them to sell the rubber on credit, instead of for cash. The contract was made over the telephone in a conversation between Desmond and a representative of the company named Dunbar. Desmond testified that Dunbar asked for credit and represented the solvency of the company; whereas Dunbar testified that Desmond proposed the sale on credit, and that no representation at all was made as to the company's solvency.
The referee, being of opinion that each witness was giving an honest recollection of the conversation, was driven to decide the question upon the probabilities of the case, and decided it in favor of Desmond's account. He found that Dunbar had recklessly made a representation of the company's solvency. The District Judge, on the other hand, upon consideration of the probabilities, came to the conclusion that Dunbar did not ask for any change in the course of business and did not make any representation as to the company's solvency.
In discussing the law as to rescission the District Judge fell into the same error as to the proof necessary to rescind a contract where a false representation has been made as in Re Levi & Picard (D.C.) 155 F. 262. It results from confusing rescission in cases where there has been no representation whatever with cases where a false representation has been made. In the former, it is...
To continue reading
Request your trial
-
Kamberg v. Springfield Nat. Bank
...v. Rice, 2 Cush. 48; Watson v. Silsby, 166 Mass. 57, 43 N.E. 1117; Donaldson v. Farwell, 93 U.S. 631, 23 L.Ed. 993; In re New York Commercial Co. (C.C.A.) 228 F. 120; In re Horigan Supply Co. (C.C.A.) 2 F.(2d) Manly v. Ohio Shoe Co. (C.C.A.) 25 F.(2d) 384, 59 A.L.R. 413; California Conservi......
-
In re Weissman
...the appeal. There is no doubt of the right of a vendor to reclaim his property, when his sale was induced by fraud. In re New York Commercial Co., 228 F. 120 (C. C. A. 2); In re Gold, supra; Jones v. H. M. Hobbie Grocery Co., 246 F. 431 (C. C. A. 5). See, also, Cunningham v. Brown, 265 U. S......
-
Manly v. Ohio Shoe Co.
...Assignee, v. Farwell, 93 U. S. 631, 23 L. Ed. 993; In re Independent Coal Corporation (C. C. A. 2d) 18 F.(2d) 1; In re New York Commercial Co. (C. C. A. 2d) 228 F. 120; Jones v. H. M. Hobbie Grocery Co. (C. C. A. 5th) 246 F. 431; Collier on Bankruptcy (13th Ed.) vol. 2, p. 1717 et seq. Such......
-
Sternberg v. American Snuff Co., 9637.
...In re Independent Coal Corporation, 18 F.(2d) 1 (C. C. A. 2); Jones v. Hobbie Grocery Co., 246 F. 431 (C. C. A. 5); In re New York Commercial Co., 228 F. 120 (C. C. A. 2). The order appealed from must be, and is, ...