Court Opinion

ID: 5550626
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:34:43.330646+00
Date Added: 2024-06-11T08:35:05.084579
License: Public Domain

The Assistant Vice-Chancellor.
The transfers and conveyances made by the President of the insolvent association in question, to the defendant Tylee, were directly within the provisions of the eighth and ninth sections of the title of the Revised Statutes relating to “ Monied Corporations,” (1 Rev. St. 591.) In the language of the ninth section, they are not valid in law, and Mr. Tylee is bound to account for the property assigned, to the receiver as the trustee for the creditors and stockholders.
Independent of the statute, these proceedings could not be permitted to stand. They were a fraud upon this court and its process and proceedings. The President of the company had been served with a copy of Tracy’s bill. He therefore, knew of the objects and grounds of the suit, and that an injunction and receiver had probably been granted when the finance committee met at his house. It is not improbable that all the members of the committee there present knew of the suit in this court, and of the occasion of their being called together at such an unusual place. "Be that as it may, and without reference to any knowledge or information on the part of Mr. Tylee himself ; the order foy the injunction and receiver had actually been made before the meeting of the committee and before the President executed the. transfers, and with previous notice to him of the motion for such order. It was palpably an attempt to evade the effect of the impending action of the court, and as the defendant does not claim as a bona fide purchaser without notice, the transfers must be set aside.
The pendency of the suit of Tracy against the company furnishes another ground on which the complainant is entitled to the relief prayed. This is the rule unquestionably, as to the .personal estate assigned to Mr. Tylee, and I think in reference to the real estate he is not a purchaser, within the meaning of the statute requiring notice of the pendency of the suit to be filed. (2 R. S. 174, § 43.) The transfers were made to in*210demnify Mr. Tylee and others against a liability previously incurred for the company ; he was himself a stockholder of the company, and he alone now sets up a claim against the complainant. He parted with nothing on the faith of the transfers in question, and on their being avoided, will be left in the same situation that he was before they were made.
The defendant must transfer to the complainant all the property assigned to him which he has not already transferred under the order of the court; and the conveyances made in pursuance of that order, are confirmed. He must also account for and pay over to the complainant all sums received by him from the property assigned.
As to costs, Mr. Tylee has litigated the complainant’s claim without any probable cause. And I do not perceive how the defendants, Strong and Davis, who were interested with him, and who participated in the improper action of the finance committee on this subject, can be exonerated from the payment of costs.
The complainant is entitled to his costs against the three defendants last named.