Trachten v. Boyarsky

• Decision Date: 04 March 1937
• Court: Connecticut Supreme Court
• Parties: TRACHTEN v. Boyarsky et al.

190 A. 869

122 Conn. 465

TRACHTEN v. Boyarsky et al.

Supreme Court of Errors of Connecticut.

March 4, 1937

Appeal from Court of Common Pleas, New Haven County; Walter M Pickett, Judge.

Action by Philip Trachten against Jacob Boyarsky and others to recover on certain notes and set aside alleged fraudulent conveyances. From a judgment for plaintiff for money damages only and for defendants on remaining issues after trial to the court, plaintiff appeals.

Error in part, and case remanded with direction.

George W. Crawford, of New Haven, for appellant.

Benjamin Slade and Louis Weinstein, both of New Haven, for appellees.

Argued before MALTBIE, C.J., and HINMAN, BANKS, AVERY, and BROWN JJ.

HINMAN, Judge.

In addition to recovery upon a note for $1,862.70 of the defendants Jacob and Sarah Boyarsky to the plaintiff, as to which judgment was rendered in his favor, the plaintiff claimed, by way of equitable relief, reconveyance of certain property alleged by him to have been fraudulently conveyed by these defendants. His appeal relates to the denial of this relief. The note, which was dated September 7, 1935, was given to cover a balance due from the Boyarskys to the plaintiff upon items, set forth on the back of the note, consisting of four notes of $300 each, one note of $1,060, and another item of $103.35, followed by the statement, " Payee does not waive any legal or equitable rights he has or had against both makers." The finding states that the first four notes so listed represent loans to persons other than the defendants upon two of which Jacob Boyarsky was an indorser; the item of $1,060 was a balance on a series of loans made to Sarah Boyarsky; and the $103.35 represented money collected by her for rents of premises on which the plaintiff held mortgages. The note in suit was given to obtain a release of an attachment and the abandonment of an action brought by the plaintiff against the Boyarskys.

For a long time Jacob Boyarsky has conducted a store for the sale of shoes, dry goods, wearing apparel, and similar merchandise, known as " Boyarsky's Shoe Store" and as " Boyarsky's Store," in a building in Wallingford owned by Mrs. Boyarsky. In July, 1933, David Shein, Mrs. Boyarsky's brother, obtained judgment by default against both Jacob and Sarah Boyarsky for $4,286.93 found to be due on their joint and several promissory note. In that action Shein had garnished a certificate of deposit in Mrs. Boyarsky's name in one of the Wallingford banks. On August 30, 1933, as a result of a conference of interested parties, there was given to Shein a joint note of Jacob and Sarah Boyarsky for $4,450 secured by a third mortgage on the store premises and the garnishment was released. On October 2, 1933, the mercantile business was incorporated under the name of " Boyarsky's Incorporated," the incorporators being Shein, Jacob Boyarsky, and Michael T. Downes, the attorney who prepared the incorporation papers. Upon organization 50 shares of stock, par $100, were issued-30 shares to Shein, 10 to Jacob Boyarsky, and 10, temporarily, to Downes. This stock was paid for by conveyance by Jacob Boyarsky to the corporation of the stock, fixtures, and good will of his store, the merchandise being appraised and received at a valuation of $5,262.61. On October 4, 1933, Jacob Boyarsky executed and delivered a bill of sale thereof to the corporation, which was recorded November 2d. Subsequently, by direction of Jacob, Downes transferred the 10 shares of stock issued to him to Hannah and Samuel Boyarsky, minor children of Jacob, 5 shares to each, and of the 10 shares issued to Jacob 9 were subsequently transferred by him to a relative. Shein received, in addition to the 30 shares of stock, the joint note of Jacob and Sarah for $1,540 and surrendered the prior note for $4,450 and released the mortgage securing it. The trial court found that the property delivered by Jacob to the corporation was of the full value at which it was taken; that the 30 shares issued to Shein were so issued for full and valuable consideration; and that the 5 shares transferred to Hannah were to repay her for money loaned to her father, Jacob.

On November 4, 1933, Jacob Boyarsky deeded to his daughter Hannah an undivided one-half interest in certain real estate in Wallingford. The trial court found that this conveyance was made without consideration and that after it was made no other substantial assets remained in the name of Jacob.

The conclusions reached by the trial court that the transfer by Jacob Boyarsky to the corporation was for a valuable and valid consideration, and that the corporation was a purchaser for value and not party to any fraudulent transaction, which are assigned as error, have sufficient support from the finding, which is not attacked, to preclude reversal of them as a matter of law. The appellant's claim that the fixtures and good will which were included in the conveyance as well as the merchandise detailed in the directors' statement of property received in payment for stock were transferred without consideration apparently is made for the first time in his brief on this appeal. However, the plain implication from the facts found is of an intention to transfer the entire store to the corporation, and it does not follow, merely from the failure to include these minor items in the directors' statement, that they were not conveyed upon adequate consideration.

The plaintiff's claim that the facts pertaining to the possession and control of the store property after the transfer were such as to constitute retention of possession by Boyarsky is not within the allegations of the complaint or the scope of the prayers for relief. The effect of retention of possession under certain circumstances is to continue the right of creditors of the vendor to attach the property as still belonging to the latter. Cohen v. Schneider, 70 Conn. 505, 40 A. 455; Spencer v. Broughton, 77 Conn. 38, 58 A. 236; Freedman v. Avery, 89 Conn. 439, 94 A. 969. No question of attachment or a right thereto is involved in the present case. The complaint alleged that the property was transferred without consideration for the purpose of avoiding payment to the plaintiff and placing it beyond the reach of legal process, and the prayers were for equitable relief by way of a retransfer of the property to Boyarsky and subjection of it to a lien in favor of the plaintiff.

As to the conveyance by Jacob to his daughter Hannah, while it is found that it was made without consideration and left no substantial assets remaining in his name, the trial court evidently regarded the further fact found that at the time of the conveyance his only obligation to the plaintiff was his contingent liability as indorser on two notes, which were not shown to have been then due or in default, as insufficient to constitute the plaintiff such a creditor as to entitle him to have the conveyance set aside. While there are some decisions to this effect, including the New Jersey cases relied upon by the...