Clapp v. Nordmeyer

• Decision Date: 01 October 1885
• Citation: 25 F. 71
• Parties: CLAPP v. NORDMEYER and others. [1]
• Court: U.S. District Court — Eastern District of Missouri

25 F. 71

CLAPP v. NORDMEYER and others. ^[1]

United States Circuit Court, E.D. Missouri.

October 1, 1885

The bill states that the firm of Nordmeyer & Schoen, the debtors referred to in the opinion of the court, were, on January 30 1885, utterly insolvent; that they owed more than $5,000 that their assets did not amount to more than half that sum and that they had no individual assets; that, knowing they could not further prosecute their business and had not assets sufficient to pay all of their just debts in full, they determined to stop business and dispose of all of their assets to a part of their creditors; that, for the purpose of evading the statute of this state, to-wit, section 354, Rev. St. 1879, and to prefer the debts of the creditors whom they desired to pay to the exclusion of the complainants and other just creditors, said firm and the creditors whom they desired to prefer concocted a scheme by which said firm should confess judgments in favor of such creditors for the amounts due them, and have executions issued thereon forthwith, and all of their assets at once levied upon thereunder, and immediately thereafter, as a part of the same general scheme for the disposition of all of their assets as aforesaid, make a voluntary assignment in form, subject to said judgments and executions, to one Drabelle as assignee; that, in pursuance of said fraudulent scheme, said firm on said thirtieth of January, 1885, confessed judgments in favor of the creditors who were parties to the arrangement, and had judgments entered against them and executions issued thereon at once, and levied on all of their assets, and as soon as the sheriff had taken possession of their assets, they, on the same day, as a part of said scheme, made an assignment of all their assets as agreed on, for the benefit of all of their creditors to said Drabelle, and said assignee immediately took possession of said assets, subject to the sheriff's possession; and that thereafter the property levied on was sold under said executions, and the proceeds paid to John D. Johnson as agent and attorney of the judgment creditors.

The section of the Missouri statutes above referred to is as follows:

'Every voluntary assignment of lands, tenements, goods, chattels, effects, and credits, made by a debtor to any person in trust for his creditors, shall be for the benefit of all the creditors of the assignor, in proportion to their respective claims, and every such assignment shall be proved or acknowledged and certified and recorded in the same manner as is prescribed by law in cases wherein real estate is conveyed.'

Farish & Jones, for complainant.

J. D. Johnson, for defendants.

BREWER J., (orally.)

This is a creditors' bill. It alleges that the debtors, on January 30, 1885, being indebted to complainants and divers other parties, confessed judgments in favor of other creditors. On the same day executions were issued on those judgments and levied on the property of the debtors. Thereafter, and on the same day, a general assignment was made by the debtors. The bill alleges that both the confession and the assignment were part and parcel of the same scheme, and made by the debtors conscious of their insolvency, and with a view of making a total disposition of their property. It alleges further that, after the sales under these executions, the proceeds passed into the hands of one of the defendants, whom the complainants seek to charge as trustee.

As will be seen, this brings the case very clearly within the principle of the cases of Clapp v. Dittman ^[2] and...