Eckhart v. Burrell Mfg. Co.

• Decision Date: 26 October 1908
• Citation: 236 Ill. 134,86 N.E. 199
• Parties: ECKHART v. BURRELL MFG. CO. et al.
• Court: Illinois Supreme Court

236 Ill. 134

86 N.E. 199

ECKHART

v.BURRELL MFG. CO. et al.

Supreme Court of Illinois.

Oct. 26, 1908.

Appeal from Appellate Court, First District, on Appeal from Circuit Court, Cook County; Thomas G. Windes, Judge.

Suit by Percy B. Eckhart, trustee in bankruptcy, against the Burrell Manufacturing Company and others. From a decree of the Appellate Court, affirming a decree dismissing the bill, complainant appeals. Affirmed.

Clarence T. Morse (Percy B. Eckhart, of counsel), for appellant.

E. C. Westwood, for appellees.

VICKERS, J.

Percy B. Eckhart, trustee in bankruptcy, filed a bill in chancery in the circuit court of Cook county to set aside certain conveyances alleged to have been made in fraud of creditors. The circuit court denied the relief and dismissed the bill, and that decree has been affirmed by the Appellate Court. The trustee has prosecuted an appeal to this court.

The facts are not seriously controverted. George C. and James T. Burrell were copartners in the business of contracting for the construction of grain elevators. In July, 1902, the partners withdrew $2,900 in cash and divided it equally between their respective wives. The money was loaned to the Burrell Manufacturing Company, a corporation engaged in manufacturing elevator supplies, by the donees, who took notes from the corporation, with an agreement that the notes were to be paid by issuing certificates of stock to the parties when the capital stock was increased. The books of the copartnership were introduced in evidence, from which it appears that at the time the gifts in question were made the assets of the copartnership were $36,000 and the liabilities $30,000. After the money above mentioned was given to the wives, the business of the partners became unprofitable to such an extent that in December following they were forced into bankruptcy. The shrinkage in the assets is explained by unexpected losses on certain contracts then on hand. The circumstances mentioned as the direct cause of such losses are that the supply men did not live up to their contracts for the delivery of material; that labor conditions became serious; that the price of labor advanced, as well as the price of material; that they had a serious loss on account of floods in Texas and quicksand at Hammond, Ind., where they had a large contract for constructing elevators. The loss at Hammond, Ind., was over $12,000, and something near $5,000 at El Paso, Tex. At the time of the failure, in December, 1902, the liabilities of the partnership were $27,000 and the assets $5,000.

This bill is filed on the theory that the firm was insolvent at the time the gift in question was made, and is intended to reach the shares of stock which were bought with the money given their wives by the partners. Only one question need be considered. There is no averment in the bill and no proof in the record that any of the creditors on behalf of whom the bill is filed were creditors at the time the alleged gift was made. No one not a creditor at the time of the transaction can impeach a gift by a husband to his wife. So far as this record shows, all of the indebtedness that existed at the time the gift was made may have been full paid. In fact, we are inclined to agree with the Appellate Court that it is a fair inference, under the proof, that such debts were paid, and that all of the creditors represented by appellant extended credit after the assets had been...