Nat'l State Bank of Elizabeth v. McCormick

• Decision Date: 24 November 1809
• Citation: 44 A. 706
• Parties: NATIONAL STATE BANK OF ELIZABETH v. McCORMICK et al.
• Court: New Jersey Court of Chancery

44 A. 706

NATIONAL STATE BANK OF ELIZABETH

v. McCORMICK et al.

Court of Chancery of New Jersey.

Nov. 24, 1809.

Bill by the National State Bank of Elizabeth against William J. McCormick and others to set aside an alleged fraudulent conveyance of real estate, and to subject it to a lien of complainant's judgment. Decree for complainant.

Edward Nugent and R. V. Lindabury, for complainant.

Samuel Schleimer and Samuel Kaliseh, for defendants.

REED, V. C. This bill is filed to set aside a deed as fraudulent in respect to the complainant. William J. McCormick was an indorser on a note discounted for the benefit of his brother by the National State Bank of Elizabeth, the complainant. He was also the owner of a half interest in a lot of land In Elizabeth. On October 11, 1898, after the death of his brother, but before the maturity of the note, McCormick sold his interest in this lot to Thomas F. Callaghan. Judgment was afterwards got by the bank against McCormick, and upon the return of the execution issued upon it, unsatisfied, this bill was filed to set aside the sale to Callaghan. The brother of William J. McCormick died insolvent. William J. McCormick was informed of this fact, and the bank requested him to give a mortgage to secure it for the unmatured paper of his deceased brother, upon which Mr. William J. McCormick was in-dorser. Instead of doing so, he, as already recited, on October 11th executed this deed for the only piece of real estate of which he was the owner. The expressed consideration in the deed was $5,000. If paid at all, this sum was paid by John Ryan, the father-in-law of Callaghan. The conveyance was to be a gift, they say, by Ryan to his son-in-law. The circumstances surrounding the payment of this sum are these: On October 11, 1898, John Ryan presented a 10-days note to the First National Bank of Elizabeth, for $5,000, and had it discounted. The money was drawn on Ryan's check, payable to Callaghan. This is the money which Ryan and Callaghan say was paid over to McCormick in the office of Lawyer Schleimer, in Elizabeth, at the time when the deed from McCormick to Callaghan was executed and delivered. On October 13th John Ryan brought $5,000 to the bank, with which he paid off the $5,000 note. The complainant insists that the last $5,000 was the first $5,000. that the money taken out was returned, and that the pretended tradition of the money from Callaghan to McCormick, if it occurred at all, was a juggle intended to give an air of veracity to what was in fact a fictitious transaction, Intended to put McCormick's property beyond the reach of any future judgment. I think that it is probable that the money was present at the time of the execution of the deed, and that it was passed from Callaghan to McCormick through the intervention of the lawyer. But the complainant insists that the same money came to the hands of Ryan, and was by him presented to the bank in payment of the $5,000 note. It is in evidence that, when the $5,000 was paid to Callaghan, it was in packages enveloped by bands. Mr. —thinks that, when the $5,000 was returned to Ryan, it was also enveloped in bands similar to those which bound the money first delivered by the bank to Callaghan. Mr. Schleimer, the lawyer, however, says that he counted the money at the time it was delivered to McCormick, and in doing so removed the bands which had been round the packages. The inference that the sum paid by Ryan was the same delivered to Callaghan is, however, rested mainly upon other circumstances. Both Ryan and Callaghan were well acquainted with McCormick. Both Ryan and McCormick were visitors at Callaghan's saloon, and the latter had a room in Callaghan's building. Ryan does not satisfactorily account for his possession of a sum of $5,000 on the 13th of October, which he derived from any source other than this. His account is that he had about $5,500 in his safe at home; that he was keeping this amount in his safe because he was expecting to purchase two pieces of property belonging to a Mr. Morris; that he had requested his friend, Mr. Brophy, to see if the property could be bought from Morris; that, when he found that it could not be bought, he, on October 13th, took $5,000 of the $5,500 to the bank, and paid his note. Now, Mr. Brophy says that Ryan did ask him to ascertain if Morris would sell this property; that he did speak to Morris about the matter, he thinks twice, and on both occasions Morris refused to sell. The date when either of these interviews occurred, he is unable to fix. The aspect of the matter so far is this: Ryan wished to pay $5,000 for Callaghan. He says he had $5,500 in his safe. Instead of taking this money to make the payment, he gets a 10-day note discounted, to raise the amount, and keeps the $5,500 still in his safe. Now, this suggests several queries. Why did not he use the money in the safe, and wait until the owner of the properties he wished to buy, and who had refused to sell, should change his views, and then use his credit in the bank, if it ever became necessary to do so? Then, again, the note was payable in 10 days. Whence did he expect to get the money to pay the note in 10 days, if on October 11th he resolved to keep the $5,500 to await the possible change in the mind of Morris? Neither Ryan nor Brophy says that a decisive answer was to be made within that time, or within any particular time, or that any further or different reply was expected from Morris. Yet, according to Ryan's story, between October 11th and 13th he suddenly became convinced that he could not buy the property, and so used the money to pay the note, which had run but two days, and was yet unmatured. It is to be observed that while this money, of which a large part had been received as early as July, was kept in the safe, Ryan had an account running in the complainant's bank, situated within 200 feet or 300 feet from his residence and place of business. This bank account exhibits the fact that deposits were made quite often, and these deposits were of cash as well as of checks. On July 8th he...