Case ID: misc_22/html/0284-01.html
Source: Caselaw Access Project
Author: {"author": "Gaynor, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William A. Wright, Plaintiff, v. John R. Thorpe et al., Defendants.
    (Supreme Court, Kings Special Term,
    January, 1898.)
    ^Fraudulent transfers—An instrument hindering creditors — Nonconsenting creditors,
    A trust instrument, made by a judgment debtor when insolvent, by . which he transfers all his business and assets to trustees who are to conduct the business for an indefinite time and pay in full, from the -proceeds, such creditors as shall come in and agree to the arrangement, arid thereupon transfer the. business to the debtor, and. which further provides that, if the debtor at any , time provides a * purchaser of the business for a sum sufficient to pay the consenting • creditors, the trustees shall transfer the property to the purchaser upon receiving that sum, which shall be divided among the consent- ■ ing creditors, is a scheme which hinders and delays all creditors who- do not consent to it and may be set aside at the • instance of a nonconsenting judgment creditor.
    Agtioh by a judgment creditor to set aside a transfer of property by his debtor as fraudulent and void against creditors. It is by a trust instrument which transfers the business- and all of the assets of the debtor therein, to trustees to hold the same, run the business for an indefinite time, and out of - the profits pay in full such of the creditors as shall come in and agree to such arrangement, and thereupon' to transfer back to the debtor. It also provides that if at any time' the said debtor shall provide a pur-chaser of the said business for a sum sufficient to pay such consenting creditors, the trustees shall transfer to such purchaser upon receiving the said sum, which' they shall divide among the said creditors. The property so transferred by the debtor was all that he had, and he was insolvent when he made such transfer.
    Clarence J. Shearn, for plaintiff.
    Louis Wertheimer, for defendants.
   Gaynor, J.:

This scheme hinders and delays all creditors who did not consent to it (of whom plaintiff is one), and is therefore void as to them (Sutherland v. Bradner, 116 N. Y. 410). Judgment for the plaintiff..

Judgment for plaintiff.