Solomon v. Amervoll Co., Inc.

• Decision Date: 16 December 1935
• Citation: 181 A. 712
• Parties: SOLOMON v. AMERVOLL CO., Inc.
• Court: New Jersey Court of Chancery

181 A. 712

SOLOMON

v. AMERVOLL CO., Inc.

Court of Chancery of New Jersey.

Dec. 16, 1935.

Syllabus by the Court.

1. Payment to an ordinary creditor, without notice of insolvency, received while the company is carrying on its usual business, does not fall within the condemnation of section 64 of the General Corporation Act. Were the rule otherwise, no creditor could safely accept payment of any ordinary debt unless he had first ascertained that the corporation was solvent.

Suit by Irving Solomon, receiver of the Atlantic Importing Company against the Amervoll Company. On bill, etc., on final hearing.

Decree for defendant.

Irving Solomon, of Jersey City (Isadore Glauberman, of Jersey City, of counsel), for complainant.

Harry Kaiser, of Newark (Ralph H. Jacobson, of Newark, of counsel), for defendant.

EGAN, Vice Chancellor.

The receiver herein seeks to set aside a transfer of 256 cases of wine, made to the defendant company on or about April 6, 1935, and for an accounting from the defendant of any sales made by it of that merchandise. The receiver of the company was appointed by an order of this court on April 22, 1935. He alleges that on or about April 6, 1935, a consignment of 256 cases of wine, valued at $1,128, property of the insolvent company, the Atlantic Importing Company, Inc., was delivered to the defendant company, and that the said defendant, without warrant or authority, paid on account thereof to Rohner-Gehrig & Co., Inc., custom brokers, a creditor of the Atlantic Importing Company, Inc., the sum of $1, 191.47. It is alleged that at the time of the payment, the Atlantic Importing Company was insolvent and was in no financial position to pay the amount it owed to Rohner-Gehrig & Company, and that this was known to the defendant. The former president of the Atlantic Importing Company, Salvatore Inzinna, testified that he or no officer of the company authorized the payment by the Amervoll Company to Rohner-Gehrig & Co. He said he had a conversation with Mr. Golden, the president of the defendant company, and one of its salesmen, a man named Stern, who took part in the negotiations, which, it was calculated, would impute to the defendant some knowledge of the financial condition of the Atlantic Importing Company at the time of the transaction. But Golden testified that he had examined a Dun & Bradstreet report of the Atlantic Importing Company dated December 28, 1934, which showed a sound financial condition of the Atlantic Importing Company, Inc., as of, or about, October 20, 1934; and on cross-examination, he stated they were solvent by a very low margin. Inzinna said that at the time of his conversation, as above indicated, it was with both Stern and Golden together, and that Golden then said "we weren't good for credit." This alleged conversation took place approximately one and a half months previous to the order of insolvency, or some time in the month of March, 1935. The defendant denies that it knew of the Atlantic Importing Company's insolvency. I was not impressed by Inzinna's attitude. He was not convincing.

It appears that the Rohner-Gehrig Company were handling the sales of the Atlantic Importing Company since December or November of 1934; that the Importing Company was indebted to the Harborside Warehouse, located in Jersey City, for storage charges; the Importing Company owed the Rohner-Gehrig Company money advanced by it for duties and storage on a shipment of wines, of which the 256 cases formed a part.

Rudolph O. Haller, vice president of the Rohner-Gehrig Company, testified, in effect, that in the early part of April, 1935, Inzinna and a man named Sampson, whose father had shipped a consignment of wines, which included the 256 cases, from Germany to the Atlantic Importing Company, came to him in his office and stated that they (the Atlantic Importing Company) would like to have a release of 256 cases of wine from the warehouse, and he requested Haller to have his company advance the storage charges, and the duties imposed on the merchandise, for which they would intrust Rohner-Gehrig & Company with...