Case ID: nys_39/html/0412-01.html
Source: Caselaw Access Project
Author: {"author": "LANDON, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LEXOW v. ST. LAWRENCE MARBLE CO. BANK OF GOUVERNEUR v. SAME. GOUVERNEUR MARBLE CO. v. SAME.
    (Supreme Court, Appellate Division, Third Department.
    May 21, 1896.)
    Attachment against Corporations—Transfer of Property to Officers.
    A transfer by a corporation of its property to some of its officers in payment of bona fide debts, though void under the stock corporation law (Laws 1892, c. 688, § 48), is not evidence, in itself, of a fraudulent intent, so as to justify an attachment. 38 N. Y. Supp. 831, affirmed.
    Appeal, from special term, Fulton county.
    Actions by Theodore Lexow, by the Bank of Gouverneur, and by the Gouverneur Marble Company, respectively, against the St. Lawrence Marble Company. From orders vacating attachments against the property of defendant (38 N. Y. Supp. 831), plaintiff in each case appeals.
    Affirmed.
    Argued before PARKER, P. J., and LANDON, HERRICK, PUTNAM, and MERWIN, JJ.
    E. H. Neary, for appellants.
    B. S. Spaulding, for respondent.
   LANDON, J.

The plaintiffs’ affidavits charge the defendant, a domestic corporation, with having assigned and disposed of some of its property with the intent to defraud its creditors. The facts stated in support of this charge are that the defendant, knowing itself to be insolvent, transferred some of its property to one of its officers to secure its debt to him, and to give him a preference over other creditors, and transferred other of its property to another creditor for like purpose, contrary to the express prohibition of section 48 of the stock corporation act (chapter 688, Laws 1892). As an original proposition, we should be inclined to hold that the intentional violation of a statute prohibiting preferences was intentional fraud upon the creditors, entitled to the observance and protection of the statute; but, under the rule stated in Casola v. Vasquez, 147 N. Y. 258, 41 N. E. 517, we must hold that the facts adduced do not support the charge of actual, intentional fraud.

The orders are affirmed, each with $10 costs and disbursements. All concur.