Baldwin v. Wolff

• Decision Date: 17 December 1909
• Citation: 82 Conn. 559,74 A. 948
• Court: Connecticut Supreme Court
• Parties: BALDWIN v. WOLFF.

74 A. 948

82 Conn. 559

BALDWIN

v. WOLFF.

Supreme Court of Errors of Connecticut.

Dec. 17, 1909.

Appeal from Superior Court, New Haven County; Milton A. Shumway, Judge.

Action by Alfred C. Baldwin, a trustee in bankruptcy, against Jennie H. Wolff, to recover the sum of $3,500 alleged to have been fraudulently withdrawn by the defendant, without consideration, from the assets of a corporation shortly after its formation. Facts found, and judgment rendered for the plaintiff for $2,111, and appeal by the defendant. No error on either appeal.

Edward H. Rogers and Frank Kenna, for appellant Edward A. Harriman, for appellee.

BALDWIN, C. J. The defendant, being the owner of a retail millinery business, gave a quarter interest in it to her stepson, Charles J. Halper. They became copartners in the business, under the name of J. Halper & Co., and on December 11, 1905, the firm (her interest being three times as much as his) owned a stock in trade worth over $9,000, and owed $2,000 to one Max Abrahammer. He agreed with the copartners that the copartnership should be converted into a corporation with a capital stock of 420 shares of the par value of $25 each; each of the three to subscribe for 140 shares. Mrs. Wolff and Mr. Halper, as copartners, were to transfer their stock in trade to the corporation at an agreed valuation of $7,000; Abrahammer was to advance $2,000, to retire and discharge the partnership liabilities; and the corporation was to receive the stock in trade at the valuation of $9,000 in payment for so much of the capital stock of the corporation as should not be paid up in cash. Thereupon the subscriptions were made as agreed, and a corporation organized under the joint-stock incorporation laws of this state by the name of the "Samuel Halper Company," to which J. Halper & Co. transferred their stock in trade, and Abrahammer paid $1,572.39. He also then discharged the debt of $2,000 which the firm owed him. Of the $1,572.39, $1,500 was the remainder of his stock subscription, over and above the firm indebtedness to him of $2,000 so discharged; and $72.39 represented a third interest in certain firm assets which had not been taken into account when the agreement to form a corporation was made. The three shareholders filed a certificate of organization, stating that $3,500 has been paid up in cash, and $7,000 in property other than cash, and that $25 had been paid upon each of the 420 shares subscribed for. Each was a director, and all signed the certificate. On the record book of the corporation was an entry, also signed by all three, as directors, that its property consisted of a stock of millinery and merchandise, book accounts, and furniture and fixtures purchased from J. Halper & Co., "the value at which said property was received being $7,000 and the actual value of which is more than $7,000."

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