Hummel v. Riordon
| Decision Date | 02 October 1944 |
| Docket Number | Civil Action No. 43C362. |
| Citation | 56 F. Supp. 983 |
| Parties | HUMMEL v. RIORDON et al. |
| Court | U.S. District Court — Northern District of Illinois |
Paul T. Barnes, Harry H. Ruskin, and Simon H. Alster (of Alster, Berger & Wald), all of Chicago, Ill., for plaintiff, Fred E. Hummel.
Frank A. McCarthy and John E. Toomey, both of Chicago, Ill., for defendants John A. Riordon and Daisy B. Riordon.
Gilmore, Hendricks & Cullen, of Chicago, Ill., for defendants John Stuart Riordon, Holly Shively Riordon, and Helen F. Riordon.
LA BUY, District Judge.
The plaintiff has filed herein his sworn amended complaint as amended in which he seeks to set aside certain conveyances alleged to be fraudulent as to certain creditors of James K. Riordon, Bankrupt, to whose rights plaintiff has succeeded under the provisions of the Bankruptcy Act, as amended, 11 U.S.C.A. § 107. The defendants filed their sworn answer herein, and the defendants, John A. Riordon, John Stuart Riordon, Holly Shively Riordon and Helen F. Riordon, have now filed herein their verified motions for summary judgment, supported by affidavits, and the plaintiff has filed herein his motion and affidavit to dismiss said motions for summary judgment.
The amended complaint alleges that the bankrupt from 1926 through 1938 was the owner and in possession of certain real estate in DuPage County, Illinois; that this property was subject to a first mortgage indebtedness of $48,000, and a second mortgage indebtedness which was held by the First Union Trust & Savings Bank of Chicago as collateral security for a note of the bankrupt, the balance of said note in 1938 being the sum of approximately $54,000; that in January, 1935, the Metropolitan Life Insurance Company, the owner of the first mortgage indebtedness, filed its complaint in the Circuit Court of DuPage County for the purpose of foreclosing said first mortgage; that in 1938 the bankrupt had the resources to pay off and discharge all of said encumbrances; that to conceal his resources from his creditors and to conceal from his creditors the fact that said mortgages and liens upon said property were being settled with the bankrupt's funds, the bankrupt conveyed 490 acres of said land to his brother, the defendant, John A. Riordon, and conveyed the remaining 3 1/3 acres of land to his son, the defendant, John Stuart Riordon; that the bankrupt was insolvent at the time of said conveyances or was rendered insolvent because of said conveyances; that the bankrupt received no good or valuable consideration for said transfers, and the transferees paid no good or valuable consideration for same; that at or about the time of said transfer the holder of the second mortgage indebtedness of $54,000 had agreed with the bankrupt to surrender to the bankrupt all of its interest in said second mortgage for the sum of $15,000; that the bankrupt for the purpose of hindering, delaying and defrauding his creditors caused his brother, the defendant, John A. Riordon, to make such payment to the holder of the second mortgage and obtain an assignment of said second mortgage running to said John A. Riordon, instead of the bankrupt's obtaining a release of said indebtedness and an immediate release of said mortgage; that the said bankrupt caused said second mortgage to remain of record for the purpose of hindering, delaying and defrauding the bankrupt's creditors; that subsequent to said transfers, the bankrupt made payments on account of principal and interest to the holder of the first mortgage; that in 1940, through funds available from the sale of 93 acres of said real estate and a new mortgage on 160 acres of said real estate and other assets, including the remaining assets, the bankrupt paid approximately $43,000 to the Metropolitan Life Insurance Co. on account of said first mortgage indebtedness, but for the purpose of hindering and delaying his creditors, instead of having the said first mortgage released of record and having said foreclosure proceeding dismissed, he caused the Metropolitan Life Insurance Company to assign the said mortgage to John H. Johnson who was the nominee of the bankrupt; that subsequently the bankrupt caused said John H. Johnson to assign all of said first mortgage to the defendant, John A. Riordon; that throughout said period of time and to the date of filing said amended complaint, the bankrupt continued in possession of all of the said 493 acres and continued his farming operations, the same as before the transfers, continued to collect rents from the various tenants of buildings located in various parts of said property and to sell and dispose of parcels of said farm.
Said amended complaint further alleges that the defendant, John A. Riordon, received title to said property with knowledge of the insolvency of the bankrupt, and that said conveyance was accepted by John A. Riordon for the purpose of assisting the bankrupt in his purpose of hindering, delaying and defrauding the creditors of said bankrupt. Identical allegations are made with reference to the conveyance made to the defendants, John Stuart Riordon and his wife.
The amended complaint further alleges that certain judgments were obtained by the defendant, Helen F. Riordon, wife of the bankrupt, and John Stuart Riordon, his son, against the bankrupt; that said judgments were obtained within four months of the date of the filing of the voluntary petition in bankruptcy by said bankrupt; that in the event that said conveyances are set aside and title to said property is vested in the plaintiff herein that said judgments should be decreed void and should not operate as a lien upon the said property; that the defendant, Helen F. Riordon, claims a purported transfer to her of all household furniture and furnishings of the bankrupt; that the note upon which said judgment is based is without consideration and the conveyance of said furniture and furnishings was for the purpose of hindering and delaying the creditors of the bankrupt.
The plaintiff seeks discovery of all of said transactions; seeks to have said claimed fraudulent conveyances set aside and said property held and decreed to be the property of plaintiff as trustee in bankruptcy of said bankrupt.
The defendant, John A. Riordon, has filed his written motion and affidavit for summary judgment which sets up in detail with reference to the conveyance of the 490 acres the acquisition of the mortgages thereon and the various payments made by the said defendant with reference to the...
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