8 N.J. Misc. 491 | New York Court of Chancery | 1930
The complainant is a judgment creditor of the defendant Lena Birkhahn. The judgment was entered November 26th, 3 929. The debt, however, was of long standing, having arisen out of a foreclosure suit about fifteen years ago. The suit which resulted in the judgment was begun in the Essex county circuit court September 28th, 1929. At that time the defendant Birkhahn was the owner of property in Newark valued at $16,000 or $17,000, subject to a mortgage o£ approximately $5,000, and which is the subject of this present suit. The bill seeks to set aside as in fraud of creditors, a mortgage in the sum of $5,100, executed by the defendant Birkhahn to her son-in-law, Samuel Hellerman, on October 8th, 1929; a mortgage of $6,000 to Louis Steiner, friend of
The testimony taken in this cause is voluminous and it would serve no useful purpose to recite it in detail or to attempt an analysis of it. It discloses clearly, however, a wild scramble on the part of the defendant Birkhahn, some members of her family and friends, to render this defendant execution proof with all possible speed after the institution of the suit at law against her by the complainant. The entry of a judgment in the suit at law was delayed by the filing of an answer, later struck out by the court as sham and frivolous, and pending the disposition of that matter and the entry of the judgment, this defendant disposed of all of her real estate, withdrew all money in bank, and withdrew or assigned all building and loan stock of which she was possessed in this state, and removed to the State of New York to the home of her son-in-law, Hellerman. The whole series of transactions involved in this controversy is marked with such unmistakable badges of fraud that it is almost inconceivable that any defense of the transactions would be offered except upon the belief that the tell-tale tracks had been conpletely covered. Mrs. Birkhahn herself did not appear at any of the hearings in this cause, although she filed an answer generally denying the allegations of the bill. The excuse for her non-appearance was that she was suffering from high blood pressure, but no physician testified as to her physical condition, nor did the defendant Rotter interpose any defense to the action. He did not appear at any of the hearings. It is alleged that his suit at law against Mrs. Birkhahn was settled after this bill was filed, but a discontinuance was not filed until the last hearing in this cause. It is said that the Hellerman mortgage is valid because given in part to secure an antecedent debt of $2,100 and in part to secure
It is true that the testimony and documentary evidence presented, if reliable, might be said to furnish a complete defense to this suit, and I apprehend that a dismissal of the bill on that ground would be sustained, but I am not obliged to believe all the testimony that has been given, and I do not. In fact, the defense is too complete, in view of the self-evident fact of Mrs. Birkhahn’s wild scramble for cover immediately
I have no doubt that the fee paid to Mr. Quigley by Steiner was repaid a few days later by Hellerman even though his wife’s check was used for that purpose, and Steiner’s actions were not those of the ordinary investor. He depended too much upon Hellerman and Daniels, and Daniels did not testify.
In connection with the law action of the defendant Rotter against Mrs. Birkhahn, the original order to show cause issued herein on November 8th, 1929, contained restraint against further proceedings in that suit and subsequent orders of this court contained restraint against the parties and their attorneys from “proceeding therewith in any manner.” Any settlement of that suit by the parties themselves or their attorneys, pending the final decision in this cause, was in direct violation of the orders of this court and the restraint thereby imposed, and will'not be permitted to prejudice the rights of the complainant. I will advise a decree in accordance with these conclusions.