Kearny Plumbing Supply Co. v. Gland

8 N.J. Misc. 789 | New York Court of Chancery | 1930

Backes, Y. C.

The complainant was an existing creditor of Gland when the latter conveyed to his wife, through an intermediary, the lands involved in this suit. The complainant’s debt has been reduced to judgment and by its amended bill (relief on the original bill was denied, 105 N. J. Eq. 728) prays that the conveyances be set aside, charging that they were •executed without a fair consideration; that Gland was thereby rendered insolvent, and that at the time of their delivery he was engaged in the plumbing business for which the property remaining in his hands, after the conveyances, was an unreasonably small capital.

The conveyances were voluntary, without consideration. Gland had a small plumbing shop. Its content, according to the complainant, was worth about $200 when he conveyed the lands to his wife. Within the month in which the conveyances were made his debt to the complainant, for merchandise, grew from $3,251.67 to $5,104.61. Within the same period, according to the defendant, his assets, aside from the real estate, diminished from $11,889.74 to $9,133.42, while his liabilities increased from $8,021.67 to $10,074.61, so that on the last day of the month his liabilities exceeded his assets by $941.19 if the real estate be not included. The assets, as Gland estimates, then consisted of merchandise $3,000 and bills receivable $6,000. Whether the bills are collectible is not disclosed, but that he exaggerated the values of his assets and minimized the total of his debts is plain.

The testimony warrants a finding that the conveyances were intentionally fraudulent to cheat the complainant. The conveyances unquestionably rendered the debtor insolvent, and it is patent that the property remaining in his hands was an unreasonably small capital within the meaning of section 5 of the Fraudulent Conveyance act. Cum. Supp. Comp. Stat., p. 648. The conveyances will be set aside.