22 N.Y.S. 50 | N.Y. Sup. Ct. | 1893
The Vertical Tube Boiler Company, a domestic
corporation, executed a mortgage to the Holland Trust Company upon its lands in Queens county, to secure $75,000. This amount was represented by 75 bonds of $1,000 each. The Holland Company was simply a trustee. The mortgage is a first record lien on the surplus money in question, but it was given when the tube company was insolvent and in contemplation of insolvency, and is therefore void. The trust company, ánd a creditor holding some of the bonds, seek to escape this result by proof that the mortgage was given under an agreement to execute the same at a time long prior to the insolvency; that money was acquired under the agreement; and that therefore the mortgage was not in contravention of the statute.
Rev. St. p. 603, § 4, provides that it shall not be lawful for any incorporated company to make any transfer or assignment of its property in contemplation of insolvency to any person whatever, and every such transfer or assignment to such person, or in trust for him or his benefit, shall be utterly void.