Rubenoff v. Davis

Judgment affirmed, with costs. No opinion. "Woodward, Rich and Carr, JJ., concurred; Burr, J., read for reversal.

I dissent from the decision about' to be made. This action’ is brought to set aside transfers of property as made in fraud of creditors. Davis and Marcus, judgment debtors .of the plaintiff, by a bill, of sale made September 24, 1907, attempted to transfer to Harris Hand man,, a brother-in-law of Marcus, all,of the stock' in trade and assets of every description which belonged to the said firm. No consideration was paid for such transfer, which .was in bulk. At the same time a paper was executed, signed by Davis, Marcus and Handman, to the effect that “if a compromise agreement entered into between the. creditors of said Davis and'Marchs this day at the rate of 25# settlement is signed by all of said creditors of Davis and Marcus; ” Handman would pay to said creditors twenty-five cents on the dollar, together with the sums set forth in the schedule thereto annexed and made .a part of. said paper. No schedule was annexed to said instrument. It appears from the testimony, however, that some of the claims against Davis and Marcus were in favor of workmen who had a lien upon the coats, constituting part of the firm stock in trade, and these claims wore paid in full in order to release the lien. Certain other creditors who had loaned money to the said firm it was agreed should likewise be paid in full. It was further provided that Handman should carry on the business formerly conducted by the firm for a period of thirty days, and after reimbursing himself for all moneys .paid and expended, and the reasonable expenses attendant upon the continuance of said business, turn over the balance if any to the said Davis and Marcus. If this, under any circumstances, Was an *893enforcible agreement, it was only on condition that tbe composition agreement was signed by all the firm’s creditors. It was not signed by all of them. It seems to me. therefore, that the agreement was an unenforcible one, and if Hand-man’s promise to pay twenty-five cents on the dollar to the firm’s creditors could not be enforced, there was no consideration for the bill of sale. Beyond that, as it seem tome, the clear purpose and intent of the arrangement between the judgment debtors and Handman was, if possible, to compel the creditors of the former to compromise their claims upon that basis, and save something out of the assets for the use and benefit of the former. There is a good deal of conflict in the testimony as to the value of the assets turned over to Handman, and the court has made no express finding upon that point. Just what Handman realized from the assets, and what amount of money he actually paid out to the creditors, does not appear. It is true that this is due in part to an objection on the part of plaintiff to inquiries tending to show this, and, therefore, this should not be urged against the judgment. But, upon the whole case, it seems to me clear that the purpose and object of the transfer was to put the firm assets into Hand-man’s hands, and prevent any judgment creditor from reaching them, in order that he might speculate with these assets, and if possible make some money thereby which would enable him to make a composition with the greater portion of the firm’s "creditors.and save something for the members thereof. If that is so, it is clear that it was a scheme to hinder and delay creditors, and as plaintiff has put his claim in judgment, and exhausted his legal remedy, he was.entitled to attack the transfer. I think that the judgment should be reversed and a new trial granted, costs to abide the final award of costs.