Pendleton v. Gondolf

• Decision Date: 18 November 1915
• Docket Number: No. 35/662.,35/662.
• Citation: 96 A. 47,85 N.J.Eq. 308
• Parties: PENDLETON v. GONDOLF et al.
• Court: New Jersey Court of Chancery

96 A. 47

85 N.J.Eq. 308

PENDLETON

v. GONDOLF et al.

No. 35/662.

Court of Chancery of New Jersey.

Nov. 18, 1915.

Suit by Edward G. Pendleton against Charles F. Gondolf and another. Bill dismissed.

Martin V. Bergen, of Camden, for complainant. Wilson & Carr, of Camden, for defendant Mary E. Gondolf.

LEAMING, V. C. Complainant has caused a writ of attachment to be issued in his behalf against the property of defendant Charles F. Gondolf as a nonresident debtor, and the writ has been levied on certain real estate in Atlantic City the legal title to which now stands in the name of Maud Gondolf. Maud Gondolf is the name by which the wife of the attachment debtor is commonly known; her real name is Mary E. Gondolf.

The bill in this suit is in aid of the attachment levy, and seeks a decree declaring the conveyance to the wife of the attachment debtor fraudulent and void as against the lien of complainant's writ.

The conveyance to the wife of the attachment debtor was made April 18, 1911. The debt for which the attachment was issued was contracted in January, 1912. Complainant's right to relief against the conveyance is accordingly based upon the claim that the conveyance was made to defraud future creditors of Charles F. Gondolf.

The writ of attachment was issued and levied December 9, 1912. The bill in this suit was filed December 16, 1912. Pending this suit and before final hearing judgment was entered in plaintiff's favor on the report of the auditor in the attachment proceedings; that judgment has been offered and received in evidence in this suit.

The primary question for consideration herein is whether the conveyance to the wife of the attachment debtor was made with intent to defraud his future creditors.

The evidence clearly establishes that in January, 1912, when the debt which is made the foundation of this suit was contracted, Charles F. Gondolf, the attachment debtor, was a member of a gang of professional swindlers in New York City commonly called "wire-tappers," and was at that time operating in that city as a confidence man in connection with that gang. It was through these swindling operations conducted by the attachment debtor and his confederates that complainant lost the money for which the attachment was issued. It is urged that the proofs do not establish with certainty what the attachment debtor was doing in the preceding April when the property here in question was conveyed to his wife; but I am convinced that there can be no doubt that he was then engaged in the same or kindred criminal pursuits as a means of livelihood. It is established that prior to that time (in 1908) he was conducting a gambling house in Atlantic City, and that prior to, at the time of, and subsequent to, the date of the conveyance in question he was living in New York City under assumed names to conceal his identity. Without taking into account the testimony of an official of the New York police department of transactions of the attachment debtor touching which the official had no direct personal knowledge and disregarding his testimony of the fact that the attachment debtor had been known to his department for many years as a professional crook and confidence man, it is yet reasonably ceriain that at the time of the conveyance here in question the attachment debtor was in fact engaged in these unlawful pursuits as a means of livelihood. The business or avocation in life of swindling others necessarily carries with it the ever-present purpose of defrauding future creditors; such a business may be said to be the business of defrauding future creditors, for its successful operation is dependent upon escaping from liabilities incurred in* its pursuit. When a person so engaged makes a voluntary conveyance to his wife of all of his property it is impossible to resist the conclusion that the conveyance was made to defraud future creditors. Should it be doubted that when the conveyance here in question was made the attachment debtor was operating as a confidence man, it is yet entirely clear that he was so operating soon thereafter; the conveyance was either made while he was pursuing the swindling operations already referred to or a short time before he entered upon those pursuits. Such a conveyance can only be properly regarded as made in fraud of future creditors.

It is urged in behalf of Mrs. Gondolf that the conveyance to her by her husband was not wholly voluntary. The evidence discloses that prior to the date of the conveyance to Mrs. Gondolf the attachment debtor had conveyed the premises in question to one Dora Collins; the conveyance to Mrs. Gondolf was from Mrs. Collins. Mrs. Gondolf has testified that the conveyance from her husband to Mrs. Collins was to secure a loan of $1,000 made by Mrs. Collins to her husband, and that her husband agreed with her that if she would pay off that loan, she could have the property, and that she subsequently discharged the Collins loan with her own money, and Mrs. Collins then conveyed the property to her at the request of her husband. I am unable to regard as false this testimony, corroborated as it is in material particulars.

The property conveyed was worth about $14,000. As to the excess over $1,000 the conveyance was admittedly voluntary. Nor am I able to treat as false the claim of Mrs. Gondolf that she was not aware of the nature of her husband's pursuits and had no reason to believe that the conveyance to her was intended by her husband to defraud creditors. Any decree in behalf of complainant must accordingly recognize a lien in behalf of Mrs. Gondolf to the amount of $1,000.

After the bill in this suit was filed and before final hearing a Judgment in the attachment proceedings was entered for the amount claimed pursuant to the report of the auditor. It is now urged in behalf of complainant that that judgment is conclusive as to the debt due from the attachment debtor to complainant herein, and is operative to relieve the complainant herein from the necessity of establishing in this suit the nature and amount of his claim, and is also operative to deny to Mrs Gondolf the right to contest the existence of a debt from her grantor to complainant for which an attachment could be sustained. I am unable to adopt that view. As the attachment judgment had not been entered at the time the bill was filed, the bill merely avera the indebtedness and the issuance and levy of the writ; the answer of Mrs. Gondolf denied the indebtedness. No supplemental pleadings have been filed, but no objection has been made based on that circumstance. No answer has been filed by the attachment debtor and no appearance has been entered by him in the attachment proceedings. In these circumstances what conclusive force must be given to the judgment in attachment?

The conclusive force to be given to a judgment which is made the basis of a suit of this nature is considered in McCanless v. Smith, 51 N. J. Eq. 505, 25 Atl. 211, and again in Minzesheimer v. Doolittle, 56 N. J. Eq, 206, 39 Atl. 386. But in these two cited cases the judgments were in personam. In the present case the judgment is in rem and is purely statutory, and while it may be regarded as conclusive for certain purposes, it is not conclusive of the debt. By the terms of our statute the defendant in attachment is given one year after distribution of the proceeds of sale under the attachment judgment to sue the attachment creditor for money received by him which was not due and owing. This provision of our statute is pointed out in Miller v. Dungan, 36 N. J. Law, 21, as wholly inconsistent with the idea of conclusiveness of the attachment judgment as to the debt, and in Schenck v. Griffin, 38 N. J. Law, 462, our Court of Errors and Appeals adopts the same view.

At final hearing herein complainant was required to establish the debt for which his attachment was issued. The evidence disclosed that the attachment was issued for money which complainant had lost through swindling operations of the defendant in attachment and his associates. The circumstances disclosed were briefly as follows: Complainant, while in New York City, was approached by a man who said his name was Hall, and that he had met complainant before; in that manner he gained complainant's confidence. Hall subsequently introduced to complainant the defendant in attachment under the name of McDonald. Hall and McDonald then induced complainant to believe that McDonald, by breach of trust with the Western Union Telegraph Company, with which company they falsely represented that McDonald was connected, could procure advance information touching the result of horse races then in progress, and with that information sure-thing wages could be made in a certain pool room to which Hall and McDonald would conduct complainant. Complainant was to supply the necessary money, and the earnings were to be divided among the three. Complainant assented to the arrangement and made the bets at the place designated and in the manner directed by the advance information supplied to him as arranged. The place where the bets were made proved to be a fake pool room, and the information supplied touching the races was also manufactured for the occasion; the result was the loss by complainant of the money for which the attachment was issued.

It thus appears that the contract between complainant and defendant in attachment through which complainant lost the money for which the writ of attachment was issued was a contract whereby the defendant in attachment was to supply to complainant information to be procured through a breach of trust to his employer, which information so supplied was to be used by complainant to swindle what complainant believed to be a pool room; the proceeds of the proposed swindle were to be shared by the three...