Judson v. Courier Co.

• Decision Date: 21 February 1883
• Citation: 15 F. 541
• Parties: JUDSON, Assignee v. THE COURIER CO.
• Court: U.S. District Court — Southern District of New York

15 F. 541

JUDSON, Assignee v. THE COURIER CO.

United States Circuit Court, S.D. New York.

February 21, 1883

E. H Benn, for appellant.

Hamilton Cole, for respondent.

WALLACE J.

This is an appeal from a decree of the United States district court for the southern district of New York, dismissing the bill.

The complainant is the assignee of one Queen in bankruptcy, and seeks by the bill to set aside a transfer of certain menagerie property alleged to have been made to the defendant by the bankrupt and others within four months of the filing of a petition in bankruptcy by the bankrupt. The allegations of the bill are that on the third day of November, 1877, the bankrupt, being then insolvent, and in contemplation of insolvency, executed a bill of sale of the property for the purpose of paying or securing an indebtedness to the defendant; that shortly prior thereto, and on the twenty-seventh day of October, 1877, the defendant and certain other creditors entered into a tripartite agreement in reference to said property, in which one Dinegar was the party of the first part, the defendant was the party of the second part, and Calvin and Cole, in behalf of themselves and certain other creditors of the bankrupt, were parties of the third part, whereby it was agreed that the title to the menagerie should vest in the defendant, divested of all liens held thereon by the other parties to the agreement, reserving to Dinegar the right to purchase the property at any time within 90 days, and providing that upon his failing to do so the defendant should sell the property and apply the proceeds to the payment of the debts of the several parties; that on the third day of November, 1877, the bankrupt consented and agreed to all the terms of said tripartite agreement. The bill further alleges that neither Dinegar nor Calvin and Cole had any valid title to or lien upon the property, but that their title and liens were fraudulent and void as to the creditors of the bankrupt, and were known so to be to all the parties to said tripartite agreement; that the said tripartite agreement was void as against the creditors of the bankrupt and was executed and assented to by the bankrupt when he was insolvent, and when all the parties thereto knew him to be insolvent and in contemplation of bankruptcy and insolvency and the same was executed and accepted with the intent of giving the beneficiaries a fraudulent preference over all other creditors of the bankrupt; all of which facts were known to the parties and to the bankrupt when the same was executed. After alleging that the defendant took possession of the property under such transfer, and the filing by the bankrupt within four months of his petition in involuntary bankruptcy, the bill prays that the transfer and the tripartite agreement be set aside, all the stipulations thereof and all the title and interest of all the parties in the property be adjudged fraudulent and void, and the defendant adjudged to transfer the proper to the complainant or pay the value of the same.

None of the parties to the tripartite agreement, except the defendant, have been made parties to the suit, and the bill does not contain any allegations for the purpose of excusing their non-joinder.

The proofs show that at the time of the tripartite agreement was made Dinegar claimed to be the owner of the property by virtue of a bill of sale thereof executed by the bankrupt to one Howe, on the ninth day of October, 1877, and a transfer from Howe to Dinegar. The consideration of this bill of sale was $35,000, at any time within 30 days, and was to be permitted to have possession of the property so long as Howe should so elect.

The proofs also show that, at the time the tripartite agreement was made, Calvin and Cole, the parties of the third part in the agreement, had a chattel mortgage upon the property executed to them by the bankrupt on the fifteenth day of October, 1877, to secure an indebtedness, owing to them and several other creditors by the bankrupt, of $13,145. This mortgage was conditioned to be void upon the payment of that sum within 60 days, and provided that the bankrupt should be permitted to retain possession of the property in the mean time, unless the mortgagees should deem themselves unsafe or unless the property should be taken on attachment or...