Jones v. Davenport

• Decision Date: 10 April 1888
• Citation: 13 A. 652,44 N.J.E. 33
• Parties: JONES v. DAVENPORT. FAYERWEATHER et al. v. SAME. FIRST NAT. BANK OF SOMERVILLE v. SAME.
• Court: New Jersey Court of Chancery

13 A. 652

44 N.J.E. 33

JONES

v. DAVENPORT.

FAYERWEATHER et al.

v. SAME.

FIRST NAT. BANK OF SOMERVILLE

v. SAME.

Court of Chancery of New Jersey.

April 10, 1888.

(Syllabus by the Court.)

Three creditors' bills by William L. Jones, Daniel B. Fayerweather and others, and the First National Bank of Somerville, against Maria Davenport.

On final hearing on pleadings, and proofs taken orally.

Enos W. Runyon, for Jones. Edward M. Colie and Thomas N. McCarter, for Fayerweather et al. James J. Bergen, for First Nat. Bank of Somerville. Alvah A. Clark and Benjamin Williamson, for defendant.

VAN FLEET, V. C. These three suits, by arrangement of counsel, were heard together, but not consolidated. The complainants are creditors of James S. Davenport, deceased, and the defendant is his widow. The suits were brought to set aside transfers of certain property which Mr. Davenport made to the defendant just before his death. The ground on which such judicial action is sought, is that the transfers were made to defraud creditors. Mr. Davenport died on the 6th of July, 1884. He left a will, bearing date January 28, 1878, by which he gave all his property to the defendant absolutely, and appointed her his sole executrix. She is made a defendant in both her individual and representative capacity. Mr. Davenport, at the time of his death, was liable, in addition to his individual debts, for the debts of two copartnerships. He was a member of the firm of Davenport Bros., composed of himself and his two brothers, Thomas and Samuel W. This partnership was formed in 1853. The members did business together as crockery merchants in the city of New York, and the firm continued in existence up to the time of Mr. Davenport's death. James S. and Samuel W. Davenport are both dead. James S. died, as already stated, on the 6th of July, 1884, and Samuel W. Davenport on the 1st day of August following. Thomas alone survives. The estate of Samuel W., it is admitted, is insolvent. The assets of Davenport Bros. are insufficient to pay their debts. The affairs of that firm are being wound up under the direction of this court. James S. Davenport had also been a member of the firm of Davenport, Johnson & Co., which was formed on the 1st of November, 1880, under an agreement that it should carry on business for three years, and was composed of James S. Davenport, and his son, James B. Davenport, his son-in-law, Edward L. Voorhis, and a young man by the name of William S. Johnson, of whom James S. Davenport had been guardian. This partnership was formed to carry on the business of buying and selling supplies for cotton and woolen mills at two different places, namely, the city of New York, and the city of Atlanta, in the state of Georgia. By the copartnership agreement, Johnson alone was required to put in a money capital. He was to contribute $15,000. James B. Davenport and Voorhis were to contribute their "influence, experience, trade acquaintance, and personal services;" but no money. James S. Davenport was not to contribute any money, nor to share in the profits, but he was to aid the firm as much as possible by the use of his name and influence. Johnson died in July, 1881; but the business of the firm, notwithstanding, was continued until about the 1st of November, 1883, when the firm was compelled to suspend in consequence of its insolvency becoming known. A receiver of its assets was subsequently appointed in Georgia, who realized scarcely enough to pay one-fourth of its liabilities. The debts of the complainants represent the three classes of liabilities. William L. Jones, the complainant in the first suit, is a creditor of Davenport Bros. A part of his debt was contracted nearly 20 years ago. He has recovered two judgments in the supreme court of this state, by confession; the first being entered November 26, 1884, against Thomas Davenport individually, for $8,151, and the second, December 25, 1884, against Thomas Davenport, as the survivor of Davenport Bros., for $7,320. Both are founded on debts of Davenport Bros. The complainants in the second suit, Daniel B. Fayerweather and others, are creditors of Davenport, Johnson & Co. The principal part of their debt was contracted between March 1, 1880, and November of the same year. They recovered a judgment in the supreme court of the state of New York for over $11,000 against James B. Davenport and Edward L. Voorhis, as the survivors of the firm, on the 23d of August, 1884; and subsequently, and within the time limited for that purpose, exhibited their claim, under oath, to the defendant as executrix. The complainant in the third suit, the First National Bank of Somerville, holds a debt incurred by James S. Davenport in his individual capacity in 1878 or 1879. A judgment was recovered for this debt against the defendant as executrix in the supreme court of this state on the 26th of February, 1885. The estate of James S. Davenport, deceased, was declared insolvent by the orphans' court of Somerset county on the 29th of May, 1885. An execution, issued on the last-mentioned judgment, was set aside after the decree of insolvency was made.

The transfers denounced as fraudulent are seven in number,—five of land, and two of personal property. The first is a deed made by Thomas Davenport and wife to the defendant, bearing date March 1, 1879, conveying the undivided one-third of a tract of land in Jersey City for a consideration, as the deed states, of $11,000. Thomas held the one-half of the one-third of the land conveyed, or the one-sixth, in his own right, and the other one-sixth as trustee for his brother James. James' interest was conveyed to the defendant by James' direction. Thomas was paid for his interest, but the charge is that the conveyance, as to James' interest, was voluntary, and made with the intent to defraud creditors. Afterwards, and in 1884, James S. Davenport made four conveyances to his son-in-law Hugh N. Hartwell, who, immediately after acquiring title, passed the same, in each instance on the same day, to the defendant. She thus became invested with her husband's title to the lands in controversy. The first deed bears date January 28, 1884, and conveys a tract of land in the city of Plainfield for an apparent consideration of $13,537.71; the second is dated April 1, 1884, and conveys the house and lot where all the parties resided at the date of the deeds, situate on the corner of Cliff and Cedar streets, in the town of Somerville, and states that the conveyance was made for a consideration of $11,520. The defendant swears that it was understood that the consideration paid for the last-described property also paid for the goods and chattels, belonging to her husband, in the house and on the premises conveyed, including several carriages, a pair of horses, and their trappings. The third and fourth deeds each bear date May 26, 1884. One conveys the undivided half of about 60 acres of land situate in the township of Bridgewater, Somerset county, which has been called in these suits the "Cornell Property," and states that the consideration paid was $7,072.50; and the other conveys the undivided half of what has been known in the trial of these cases as the "Steele Property," situate in the town of Somerville, and purports to have been made for a consideration of $4,925.26. The transfers of personal property were made by James S. Davenport directly to the defendant, and consist in passing over to her, on the 21st of April, 1884, of 86 shares of the capital stock of the First National Bank of Jersey City for an alleged consideration of $12,479.68, and on the 9th of May, 1884, of 14 other shares of the same stock, for a consideration of $2,979. This stock, the defendant admits, she sold in September, 1884, for $18,000; thus realizing, in about five months after she got the stock, over $2,500 more than she claims to have paid for it. So that it appears, in less than six months prior to his death, and after he knew that one of the firms of which he had been a member was insolvent, Mr. Davenport made over to his wife property which, according to his estimate of the value of a part, and according to the value of the residue as fixed by an actual sale, was worth over $59,000. In addition to the property so transferred, it appears that a plan was devised, about the 9th of June, 1884, with Mr. Davenport's consent, by which the defendant subsequently got possession of, and appropriated to her own use, four bonds, of $1,000 each, and worth a little more than par, issued by the Central Railroad of New Jersey, and which had been pledged by her husband, with four other like bonds, for a debt of Davenport Bros. So far as appears, the defendant had not the least pretense of title to these bonds. She did not buy them, nor were they bought with her money. Nor is there any evidence in the case which will justify a belief that her husband made a gift of them to her at a time when he was competent, so far as the rights of his creditors were concerned, to make such a disposition of his property. The bonds were never delivered to her, either actually or symbolically, until after the 9th of June, 1884; and then he was insolvent. It also appears that in 1879 or 1880 certain lands situate at Raritan, in Somerset county, belonging to Davenport Bros., were exchanged by James S. Davenport for two houses and lots in the city of Brooklyn, and that the title to the Brooklyn property, instead of being made to the firm, was, by James' direction, made to the defendant. He is charged on the books of the firm with $5,000 as the value of the firm's interest; but the defendant paid nothing for this interest at the time the exchange was made, nor does it appear that, in any of the subsequent transactions between the defendant and her husband, any allowance was made to him for this property. It thus appears as a fact, standing free from dispute, that, in less than five years prior to his death, James S. Davenport made...