2 N.Y.S. 432, Johnson v. Philips

Citation:2 N.Y.S. 432
Opinion Judge:Andrews, J.
Party Name:Johnson v. Philips et al., (two cases.)
Attorney:Whitehead & Suydam, for plaintiff. G. D. Lamb, for defendants.
Case Date:May 02, 1888
 
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Page 432

2 N.Y.S. 432

Johnson

v.

Philips et al., (two cases.)

Supreme Court of New York, Special Term, New York County

May 2, 1888

Action to set aside fraudulent conveyances.

Actions by Charles H. Johnson, receiver, to set aside a mortgage executed by Charles S. Philips to Eli Bennett, and certain transfers of property by said Philips to his wife, Julia E. Philips, as fraudulent and void as against judgment creditors.

Whitehead & Suydam, for plaintiff.

G. D. Lamb, for defendants.

OPINION

Andrews, J.

I am of the opinion that the mortgage executed by the defendants Charles S. and Julia E. Philips to the defendant Eli Bennett, dated March 3, 1885, was fraudulent and void, as against the plaintiff and other judgment creditors of the defendant Charles S. Philips. Conceding that when that mortgage was executed Charles S. Philips may have been indebted to Bennett in some amount, it is very clear that over $ 6,000 of the alleged indebtedness, to secure which such mortgage was given, was entirely fictitious. The mining stock, which, it is claimed, was sold by Bennett to Philips, did not have, at the time of such alleged sale, nor for a long time prior thereto, any value whatever; and it is equally clear that both Philips and Bennett, at the time of such alleged sale, knew that the stock was worthless. In March, 1885, Philips was practically insolvent and pressed by his creditors; and, though he never before had dealt in stocks, made, as is claimed, the purchase in question. He admitted upon the trial that he made little or no inquiry as to the value of the stock, although he was mortgaging his real estate to secure payment therefor. He failed in business a month or two afterwards, transferred all his other property to his wife, but continued to hold the stock without endeavoring to ascertain its value or attempting to dispose of it; and, when examined in supplementary proceedings, did not know the names of the companies that issued the stock, or the character of the mines which such companies were supposed to own. He subsequently turned over the stock to the receiver, although there can be little doubt that, if he supposed such stock had

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any value, he would have transferred it, as he did his other property, to his wife, to whom he claims to be still largely indebted. In the face of these facts, it must be a very credulous person indeed who can...

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