The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1871-06-09
UNITED STATES DISTRICT covsr-x BANKRUPTCY.


Important Decision by Judge Blatchfsrd ~
to Voluntary Convsynnces-Opinions Of
Chancellor Walwsrth and Lord Chancellor
Westbmry.
John Sedg,otck, Assignee in Bankruptcy OF James
T. Place ana James u. Sparhanan. cs. James x.
Place ana Others-Ths case has been reargued In
the United States District COurt. The plaintln sets
forth that the settlement made by Place on his wife
OF property IN the Fifth avenue should be set aside
and rendered void and fraudulent. on the ground
that 1t was maGe with the view Of cheating his
creditors.
Judge Batchford has Just rendered very lengthy
decision in the case. He says tho plaintiff Is
not entitled to decree as prayed for as respects
such property. furniture and proceeds. Mr..
Sedgwick, the plaintiff, as assignee In bank
ruptcy OF James K Place. Is vested, ~
virtue Of section fourteen OF the Bankruptcy
act, with all property conveyed by the bankrupt in
fraud Of his creditors. 1t was decided by the Su.
preme Court OF the United States in 1923 Sexton vs..
Wheaton, Wheaton, 800 t.at voluntary settle
ment IN favor OF wife cannot he impcached BY
subsequent creditors merely because 1t il voluntary
In Kinds, lessee, vs. Longworth III Wheaton, 1897,
in s28 the doctrine was laid down that the mere
fact that q grantor VINO makes deed TO child in
amount will not make such deed fraudulent as
against creditors II 1t be shown that tho grant0r
rassed; that the gift 10 tue chlld was reasonable
provision according to his state and condition Of
lie, ana thai enoaxh Was left for The payment 0!
the debts oil the grantor This doctrine was approved
by the Court Of Appeals OF Now YORK IN l3l IN CAR
BaDcock vs. Eckler "a New York, $50. the case last
cited also that subsequent Indebtedness cannot
be invoked TO make that fraudulent Nhicn was honest
and free from impeachment 1T tue time. IN Van
Wyck vs. Seward % Page, 60 IN 1886, chancellor al,
WORTH sald:-"l presume cannot be seriously urIeu
that when parent makes an advancement TO ms
child honestly and iairly retaining III MS own hands
al The same time property sufficient TO pay al ms
vanCement for the benelt OF creditors, II amer.
wards happens that the parent either by misfortune
existed at the time OF the Advancement In the
case OF tho Bapk OF the United States Vs. Hofsman
@ n ss ae ns
was not 81, fraudulent evena ssanst creditors
TO whom The glantor was Indebted at tue date Oh inc
deed. In Frazer vs.. Weston & Barbour On. IL .!ol.
fu 1915, The same Judge sanctions u conveyance
formed upon the consideration OF blood OF blood OF
fore, Is tAaJ such a conveyance Is wand ana not
fraud upon the rights OF any one: The judse refers
cIson Of Lord Chancellor Westbury, iii 1854 Iii the
case or Spirett VS.. WILLOWS % lie Ger. Jones VI.
l @ a tne % iH6ss haw ast pnt
sues as creditor to set aside voluntary settlc-
mont or deed OF gilt made by the defendant, MS
debtor. The plaintiffs debt was contracted
before the time OF making the settlement he
has since recovered Judgment at law and the
debtor has become bankrupt. The plaintiff com.
planned tile words OF the statute of elizabeth tnat
his Judgment ami execution are Murdered, delayed
and defrauded by the conveyance OF tbs goods and
chattcls of his debtor made by this voluntary set
Element The defence is that AT the time OF making
the settlement the debtor reserved and had prop.
erty enough TO pay the plaintiff ana all his other
creditors III ful, and that The settlement therefore,
Is not fraudulent. because the debtor remained SOL
vent after he made 1t. There is some Inconsistency
In the decided cases on the subject or conveyances
In fraud OF creditors. but tnln& tie following con
clusioas well ioundedli the debt OF the credl-
tor by whom the voluntary settlement IL inpeached
existed at the dale OF the Sc tleaent, aud II 1t is
or delayed BIZ the existence OF Tho settlement, 1t IL
1nniaterial whether the debtor was or was not
solvent after making the settlement. Eue II
voluntary settlement OF deed OF gi.t lie irlpcached
by subsequent creditors wlo=e debVs hau not oean
contracted at the GATE OF the settlement Win eA-
press intcnt to delay, hinder or oetaud creditors,
or that after the settlement The debtor nal no SUM-
Gent means or reasonable expectations OF beng
able to pay his then existing debsthat Is To say,
was reduced to STATE OF insolvency, the law inl-
phes that the settlement Was made with intent 20
delay, hinGer or daiIaud creditors, ana that IL Is,
therefore, fraudulent and void. IL Is obvious that
voluntary setter retaining money enough TO pay the
debts which he owes NJ the time Of making the SET
Element but not actually paying them, cannot give
different character to The settlement or taAe II oGt
OF the statute il stlll remains voluntary aliena
ton or deed OF gut WHEREBY, IN that event, the
remedies OF creditors are delayed hinicrcd or de-
lrauded am, therefore, OF opinion tna! this settle
mcnt Is void ~ against the plainttf.
Judge Biaichlord quotes other authorities, and
SAYS that James f. Place, the settler, Tor
porous business in the city OF New York as mem.
be- q the mercantile house o. j. II. Il. h. Place,
In winch nc ana 4. b. PlaCe We're the only general
partners and James u. Sportsman was The sole
special partner. The copartnersnlp had, by Its
terms on the 30ih Of November, 1865 some time yet
to rue. In the summer of 1885, ]. X Pace being a5
that lime prosperous III business and Tree nom EN-.
barrassmcnt and abunhanty solvent, determined TO
make "A settlement Oh has wire OF house Tor rest.
dence In pursuance u that purpose he Durch ased
for $4,000 ground rent tease OF q lot OF land on
Filth avenue Tho holder OF the assiguei 1t to
James X. Place, by an instrument dated June 81,
1885. and recorded September 10, 1865. He iinmedt-
atey commenced the erection Oh house on this lor.
~.
ferred to James *. Place was solvent ana pecuniary
In a condition 10 make tho settlement. 1T was not
unreasonable IN amount, and after nc made 1t no
had abundant property left to pay the debts which
he owed.
As TO the Fifth avenue property In question the
Judge decides In FAVOR OF defendant; and with re-
spoct to other property involved ne gives decree
for the plaintiff.
It is understood that this case may possibly be ap.
pcaled to the United states Circuit Court.
UNITED STATES DISTRICT CoUaT-H ADMIRALTY.