89 N.J. Eq. 599 | N.J. | 1918
The hill in this case was filed to set aside a deed of conveyance made by the defendant Phelps to the defendant Badgley for lands located near Matawan, in this state; the ground of the relief sought being that the conveyance was made for 'the purpose of defrauding the complainants and other judgment creditors of Phelps. The learned vice-chancellor reached the conclusion upon the proofs submitted at the hearing that the deed was made primarily to secure to Badgley the payment of an indebtedness of $1,000 to $1,200 due him from Phelps; and further, that the purpose of the latter was, not only to secure this debt, but also to put his property out of the reach of other creditors. The vice-chancellor was not entirely satisfied that Badgley was a party to the scheme to defraud the creditors of Phelps, and, for this reason, advised as follows, viz., that he be permitted to hold the conveyance as a security for his debt, which was adjudged to he $1,200; that the property be sold for the payment of that debt; and that what remained of the proceeds of the sale after such payment should be applied to the payment of the several judgment creditors of Phelps. A decree was entered in accordance with these conclusions.
We concur with the vice-chancellor in his conclusion upon the facts of the case. The legal rules applicable to such facts were laid down by this court in the case of Demarest v. Terhune, 18 N. J. Eq. 532, and were properly applied by him.
We are not satisfied, however, with his finding of the amount of Phelps’ debt to Badgley. It was based entirely upon the testimony of two witnesses who had no personal knowledge upon the subject except as it was admitted to them by Phelps. But Phelps’ admissions were not evidential against Badgley, and we consider, therefore, that there should have been a reference to a master to take proofs as to the actual amount of this indebted
We observe that the decree directs that the moneys remaining from the proceeds of the sale of the lands involved in this controversy, after the pajunent of the Badgley debt, be applied to the payment of the several judgment creditors in the order of their priority. As the propriety of this method of distribution is not questioned upon the present appeal we express no opinion upon it.
The portions of the decree appealed from will be affirmed, for the reasons stated in the opinion of the vice-chancellor, with the modification above mentioned.
For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisch, Black, White, Heppenheimer, Williams, Taylor, Gardner-13.
For reversal — None.
