Opinion
02-16-1888
VAN CAMPEN et al. v. INGRAM.
J. Wilson and W. H. Morrow, for complainants. C. H. Beasley, for defendant Ingram.
Bill for perpetual injunction.
J. Wilson and W. H. Morrow, for complainants. C. H. Beasley, for defendant Ingram.
BIRD, V. C. The Export Trading Company, doing business in the city of New York, being indebted to Root & Tinker, made their promissory note for $2,000, and delivered it to them. They indorsed it to Ingram, the defendant, without recourse. Ingram afterwards indorsed it to Ray, and, by due course, it came to the possession of W. O. Allison. At its maturity, on the 29th of June, 1885, it was protested for non-payment, a notice of which was given. Before its maturity, and about the 9th of April, 1885, Ingram purchased of one Weil the business of manufacturing pails in Belvidere, and the plant used by him there for that business, the good-will, and stock in trade. Weil had carried on the business thereunder a lease from the Belvidere Manufacturing Company, who owned the plant. He assigned the balance of his term to Ingram.Upon application to the lessor, it assented to the assignment of the lease, but to Ingram only. Ingram paid Weil $4,500 in cash for this purchase. On the 19th of April, 10 days after his purchase, Ingram procured a certificate of organization of the Pequest Manufacturing Company, which he claims became, by legal transfer from him, the owner of all the business, good-will, stock in trade, and assets which at that time belonged to him, and pertained to that business. The said note not having been paid, Allison, the holder, procured a writ of attachment to be issued out of the Warren county circuit court, July 11th following, and caused it to be served upon all the right, title, and interest of the said Ingram in the said concern. Afterwards an action at law was instituted to recover the possession of these goods and chattels from the sheriff, by the Pequest Manufacturing Company. Upon presentation of the bill in this cause, such equities were made to appear as seemed to warrant the protection of the complainant by a preliminary injunction. The question now is whether that injunction shall be made perpetual, restraining said action at law.
In order to determine whether the injunction shall be made perpetual or not, it is necessary to determine, in the first place, whether or not the Pequest Manufacturing Company was a bona fide holder or owner, or whether it existed only in name, at the instance, solely, of Ingram, while he was the actual owner and manager of the said concern, and of all the property and assets which were held there under the name of the said company. It appears that the said company was organized with a capital stock of $25,000, eight-tenths of which were owned by Ingram, and that one-tenth was nominally owned by Alfred Kay, who was made president, and one-tenth by M. R. A. The proof is that Ray was made president, but without his consent; and that the same is true of M. R. A., who was made secretary. The complainant insists that this entire transaction was nothing more or less than a scheme gotten up by Ingram to avoid the payment of this note. At the best there were but $1,000 of cash paid into the treasury of the company after its organization, while $24,000 worth (it is alleged) of the stock were actually issued, but issued in payment of property necessary to be used in carrying on the business at Belvidere; but the truth is that no stock whatever was issued according to the forms and requirements of the law. There was no such payment of $24,000 for or on account of the business at Belvidere. The truth is that on April 9, 1885, when Ingram purchased of Weil, Weil had on deposit with the lessor $100, for rent in advance, which was placed to the credit of Ingram when the Belvidere Manufacturing Company consented to Ingram's becoming the assignee of Weil. In no way does it appear that the so-called "Pequest Manufacturing Company" ever took possession of the said plant and business; nor is there any evidence that it had an office or any place of business. It had no books of account, nor any stock-book. It had an ordinary blank book, with certificates, designed to be used by any company in issuing stock by filling in the names necessary for that purpose, in which, upon a few of the blanks, the name of the Pequest Manufacturing Company was written, but no stock was ever issued. The rent was paid by Ingram, and so were the hands employed in running the concern, up to the time of the issuing of the attachment. Higley, who was in the employ of Weil, continued in the employ of Ingram, at his request, and was never informed of any change until the time of issuing the attachment, July 11, 1885. Ingram, or his agent, Loran, paid Higley for his services. Although on the premises constantly, and occupying a prominent position, he never saw or heard of any meeting of officers or directors of the Pequest Manufacturing Company, nor of any books belonging to that company; nor was any sign indicating the existence of such a company ever exhibited or brought to his attention. Loran swears that he knew Ingram in April, 1884; that afterwards he went with him to Mexico; that Ingram organized the Pequest Manufacturing Company; that he learnedthis fact from Ingram, and from being there all the time; that is, in the city of New York. He says he kept the accounts of the Pequest Manufacturing Company, and of the Export Trading Company. He says that Ingram opened the books; that Ingram furnished the stock for the Pequest Manufacturing Company; that Ray and M. R. A. paid nothing for their stock; that all the consideration that was paid was paid by Ingram. He swears that he saw a blank stock-book which had been spoken of, and that the name of the Pequest Manufacturing Company was written in a blank space left for that purpose; but that no certificate of stock had ever been taken out of it. He says, also, that he went to Belvidere for Ingram, and paid Mr. Shipmen one month's rent due for the premises, and that he paid $110 to the hands; all of which money was given to him by Ingram for that purpose; and that he knew this money was drawn by Ingram from the accounts of the Export Trading Company. It appears that upon one occasion, when in the Tribune building, and some matter was under consideration which pertained to this business, Ingram sent him, Loran, out of the Tribune building, and when he came back the books, to which he has referred, were gone, and in three days thereafter he and Ingram left for Mexico; and that he has not seen him since March 31, 1886.
The effort to maintain this bill, and to secure a perpetual injunction, is very stoutly resisted. The claim is, on the part of the defendant, that Ingram had a perfect right, under the law respecting corporations, to procure the certificate, which he did, and to transfer the title to all this property to the company so organized. Without multiplying words upon the subject, it is sufficient to say that the statement of facts which have been presented above makes the case as clear and as distinct as they can be presented, and, in my judgment, show that from a legal stand-point there is no possible defense to the prayer of the complainant. I am altogether at fault in my understanding of the law, unless in case the so-called "Pequest Manufacturing Company" were a wife or a child, or other near relative, to whom Ingram, under the circumstances, had made an assignment of all his interests, that any court in New Jersey, in law or in equity, would prohibit them from setting up any claim of title to such property. It seems to me that there are a great many cases in the books of reports in this state, and in every other state in the Union, and in the kingdom of Great Britain, to the effect that when a person indebted, being the owner of real or personal estate, makes a pretended transfer of it to another, without a bona fide consideration paid therefor, that such transfer is always declared to be illegal and fraudulent, as to the persons holding such liability. And, in my judgment, it is equally true, whatever the methods or manner of transfer may be, and even though there be a semblance of consideration paid, that if it appears to the satisfaction of the court that the transaction was in the interest of the owner and debtor, and it be made manifest by his retaining control or management of the property, and securing to himself some interest or benefit therein, that in every such case the law pronounces its condemnation of the act, and compels a surrender of the title of the property to the prior honest creditor. The Pequest Manufacturing Company was Mr. Ingram in a new dress; he had simply changed his habiliments; all its movements were his; without him it had no life or being.
I will advise that the injunction be made perpetual. The complainants are entitled to costs.