107 N.J. Eq. 79 | N.J. Ct. of Ch. | 1930
This case is distinguishable from the unreported case ofDembrow v. Realty Security Corporation (Docket 77, p. 160), in which I filed a memorandum of opinion July 10th, 1930. In the case sub judice, Finery Underwear Company, Incorporated, had a depositor's account with the City Trust Company of Passaic. A relationship of debtor and creditor existed between said parties. The Finery Underwear Company, Incorporated, was adjudged insolvent by this court on June 23d 1927, and complainant was appointed receiver. The bill of complaint herein has subjoined thereto a consent signed on June 22d 1927, by the defendant Goldstein and another officer of the corporation, to the appointment of a receiver. The corporation was indebted to the defendant, City Trust Company of Passaic, in the sum of $5,000 on a promissory note dated April 27th, 1927, which by its tenor would mature July 27th, 1927. Said note was endorsed by the defendant Goldstein and another officer of the corporation. On June 15th, 1927, six weeks before the time when said note would mature, and eight days before the adjudication of insolvency and appointment of receiver, the trust company, upon the oral direction to its cashier by the defendant Goldstein, who was president of the insolvent corporation, charged the account of said corporation with the amount of said note. At the same time the trust company credited said account with the sum of $34.15 for interest rebated. The action of the defendant-president was without the knowledge of other officers or stockholders. He was not expressly empowered by the corporate by-laws to authorize the disbursement of corporate funds. It appears from the proofs herein that said note was a renewal of an original indebtedness of $5,000 contracted by means of a promissory note discounted by the corporation *82
with said trust company about eight months prior, the original note having been renewed from time to time without reduction in amount. When said account was opened a copy of a resolution adopted by the board of directors of the corporation relating to the withdrawal of funds from said account was filed with the trust company. Such resolution provided that withdrawal of corporate funds should be upon the check of the corporation signed by two of its officers. The trust company had in its files a signature card evidencing like withdrawal requisites. On June 16th, 1927, the defendant-president Goldstein, and another officer of the corporation, withdrew the sum of $1,600 each from the funds of the corporation deposited to its credit with the defendant trust company, and on June 21st, 1927, withdrew the sum of $500 each therefrom. Such withdrawals were ostensibly intended to reimburse them for loans previously made to the corporation. When such withdrawals were made, and when the defendant trust company charged the above-mentioned note of $5,000 against the account of the corporation, only $35.92 remained to the credit of said account. Goldstein well knew when he withdrew said moneys, and when he directed the cashier of the trust company to charge the account of the corporation with the amount of the aforesaid note of $5,000, that the corporation was insolvent. The trust company was chargeable with knowledge, and could have readily ascertained upon inquiry and the exercise of due diligence the insolvency of said corporation, or that it contemplated insolvency. See Jessup v. Thomason,
I will advise a decree requiring the defendant Goldstein to forthwith pay to the complainant-receiver the several sums of money hereinabove mentioned with lawful interest from the dates when such moneys were received by him; and requiring him also to pay to the complainant-receiver the sum of $5,000, which through his machination was paid to the defendant City Trust Company of Passaic as an unlawful preference in violation of the provisions of section 64 of the Corporation act. I will advise a decree requiring the defendant City Trust Company of Passaic to forthwith pay to the complainant-receiver the sum of $5,000, with lawful interest from June 15th, 1927, for the unlawful preference obtained by said defendant from the assets of the insolvent corporation, in violation of the provisions of section 64 of the Corporation act. The complainant-receiver will, of course, be entitled only to the sum of $5,000 with lawful interest, and payment thereof by either of the defendants will suffice to satisfy the decree with respect thereto.