26 N.Y.S. 705 | N.Y. Sup. Ct. | 1893
Plaintiff, as receiver of the property of Alexander, Burney & Chapin, a corporation organized under the laws of the state of New York, demands judgment that an assignment of accounts made by it September 1, 1893, be adjudged invalid, because in violation of section 48, c. 688, Laws 1892, which reads as follows:
“No corporation which shall have refused to pay any of its notes or other obligations when due, in lawful money of the United States, nor any of its officers or directors, shall transfer any of its property to any of its officers, directors, or' stockholders, directly or indirectly, for the payment of any debt, or upon any other consideration than the full value of the property paid in cash. No conveyance, assignment or transfer of any property of any such corporation by it or by any officer, director or stockholder thereof, nor any payment made, judgment suffered, lien created or security given by it or by any officer, director or stockholder when the corporation is insolvent or its solvency is imminent, with the intent of giving a preference to any particular creditor over other creditors of the corporation shall be valid.”
On the 16th day of July, 1891, the corporation being in need of funds, five of its stockholders and directors—P. H. Alexander, C. E. Chapin, A. A. Patton, John W. Welch, and Luke A. Burke—entered into an agreement to loan it the sum of $10,000 in cash, each of said directors furnishing $2,000 of the money loaned. An agreement in writing was executed by the corporation, reciting its intention to borrow the money; to give therefor its promissory notes payable on the 16th day of July, 1892, with interest payable semiannually; to secure the payment of the notes by an assignment and transfer to Welch and Burke, as trustees, of certain accounts, amounting in the aggregate to not less than $15,000; and providing that the trustees should have the right to receive any and all moneys paid or collected upon said accounts at any time, and to hold the moneys as part security for the notes, or apply the same from time to time in payment thereof; "it being agreed, however, that the company may from time to time, there being no default on the notes, or any of them, substitute other accounts in the place of any accounts so transferred and assigned." On the same day, and after the execution of the agreement, the directors loaned to the corporation the sum of $10,000 in cash, and received its notes executed in conformity with the agreement. At the same time the corporation assigned to Burke and Welch, the trustees named in the agreement, accounts amount
Three of the directors, Alexander, Patton, and Chapin, prior to the maturity of the notes, and on February 16, 1893, ceased to be either directors or stockholders in such corporation. The provision •of the statute last above referred to does not, therefore, apply to
In the latter case the plaintiff does not sustain the burden of proof résting upon him by merely showing a transfer of property to a creditor in payment of a just debt, after it has failed to meet at maturity one or more of its obligations. It is necessary for him to go further and show facts from which the inference is required that the officers of the corporation making the transfer of the property did so-with the intent of giving the creditor a preference at a time when the corporation was insolvent, or its insolvency imminent. It is obvious-from the agreement, and the conduct of the parties under it, that the transfer of accounts was the natural result of a legitimate effort, to secure payment of a debt contracted under an agreement that it should be secured, but which failed of its purpose, owing to the neglect of the parties to strictly conform to its provisions. Under tbesecircumstances, it is not unlikely that the officers of the corporation regarded themselves as bound in equity, if not in law, to make such a transfer of accounts as would comply with the conditions on which the money was originally loaned. If such were the case, the inference would not necessarily be required that the intent with which the act was done was that of giving preference to particular creditors over other creditors, within the meaning of the statute. If the views expressed are corred:, it follows that upon the facts, as here presented, the plaintiff is entitled to a judgment directing a reassignment to him of such accounts, or the proceeds thereof, as shall remain after a sufficient sum shall have been collected to pay the sums due, with principal and interest on the notes belonging to Alexander, Chapin, and Patton. In determining the amount due on the Chapin note, there should be first credited thereon $1,176.69, the-value of certain goods for which he is indebted to the corporation.. Judgment is directed accordingly, without costs. All concur.