Opinion
02-21-1899
UNION SQUARE NAT. BANK v. SIMMONS et al.
Prank P. McDermott, for complainant. Edmund Wilson, for defendants Simmons and wife. Isaac F. Goldenhorn and Wm. H. Speer, for defendants Goodman and wife.
Bill by the Union Square National Bank against Jacob Simmons and others to set aside conveyances as in fraud of creditors. Heard upon the bill and the separate answers of defendant Simmons and wife and defendant Marx Goodman and wife. Decree for complainant.
Prank P. McDermott, for complainant.
Edmund Wilson, for defendants Simmons and wife.
Isaac F. Goldenhorn and Wm. H. Speer, for defendants Goodman and wife.
PITNEY, V. C. The complainant corporation is an attaching creditor of Simmons and wife. Its attachment is based upon a judgment recovered by it against those persons in the supreme court of New York on the 23d of February, 1897, for $5,071.12. The attachment was issued out of the circuit court of Monmouth county on the 27th of March, 1897, and levied upon certain lands as the property of Simmons and wife, or one of them, in Monmouth county, situate at the Highlands, near the lighthouse, between Navesink avenue and Highland avenue, front and rear, and between the Comstock house on the northwest and the house of Neil Burgess on the southeast, comprising about 355 feet front on Navesink avenue. The land was conveyed to Simmons and wife in two parcels, and prior to the issuing of the attachment was conveyed, or attempted to be conveyed, away by Simmons and wife, one parcel to the defendant Heyman, and another parcel to the defendant Littenberg, by deeds each dated December 19, 1896, and promptly recorded. On January 20, 1897, Mrs. Heyman conveyed the parcel so previously conveyed to her to the defendant Lena Goodman, and on the 5th of February, 1897, the defendant Littenberg conveyed the parcel so previously conveyed to him to the same defendant. The object of the bill is to obtain a decree of this court declaring all of these conveyances fraudulent and void as against the complainant.
The facts of the case as developed at the hearing are these: For several years prior and up to the 24th of November, 1896, the defendant Jacob Simmons and one Goldschmidt, a relative of his, were engaged as partners in business as manufacturing furriers, under the name of J. Simmons & Co., at 734 Broadway, New York City, and kept an account with the complainant bank, and had a line of discount with it. The debt which is represented by the complainant's judgment was at that time—November 24, 1896—in the shape of a promissory note, previously discounted and renewed for Simmons & Co., but not yet due. On the 24th of November, 1890, Simmons & Co. stopped business, and on that day delivered most, if not all, of their stock of goods to an auctioneer, and either made an out and out sale to him, or obtained, as is alleged by complainant, an advance of cash thereon to the extent of $10,000. The goods were moved out of the store, and the store fixtures were also moved away, and stored with a Mr. Friedman (mentioned in the evidence in several places as "Freeman"), who had at that time control of a suite of stores on Fourteenth street, New York. Simmons & Co. were at that time indebted to Mrs. Heyman to the extent of $500 for borrowed money, and she was paid in cash on that day. They were also indebted to Littenberg in a sum of money amounting to between $1,000 and $2,000, and also to a Mr. Jacob Harris (or, rather, to his wife) in the sum of $0,000, for which Mrs. Harris held as security either the title deeds of the Monmouth county property or a mortgage upon it. In order to further secure Mrs. Harris they assigned to her several good accounts due upon their books, so that the amount due her was shortly afterwards reduced to between $2,300 and $2,400. They made a similar arrangernentwith Mr. Littenberg, by which he was secured either by accounts assigned to him or by goods delivered to him in pledge. On the 19th of December, 1896, which was Saturday, Simmons and wife and Mrs. Heyman, Littenberg, and Harris met at the offices of Messrs. Myers & Bronner, on Broadway, the standing solicitors and counsel of Simmons & Co., and then and there the two conveyances above mentioned were made to Littenberg and Heyman, respectively. These two conveyances, prepared in the office of Messrs. Myers & Bronner, were not upon blanks, but were entirely in typewriting, and contained no words of grant, bargain, or sale, but were pure releases. The consideration named was $1 and other good and valuable considerations, and they contained no covenants. On that occasion Mrs. Heyman drew her check, dated the 21st,—two days ahead, —on the Union Square Bank, where she kept an account, for $2,350, to the order of J. and F. Simmons, and the same was indorsed by Jacob Simmons and Fanny Simmons, and handed to Mr. Harris, who was acting for his wife. He gave up whatever she had by way of lien upon the Highlands property, and the deed was then and there executed and delivered to Mrs. Heyman. At the same time she made a promissory note for $750 to her own order, and, as is alleged, handed that to Mr. or Mrs. Simmons, which, with the check, made $3,100, which the defendants allege was the true and actual consideration paid by Mrs. Heyman for the property. At the same time the deed to Littenberg was executed and delivered. Subsequently, on the 20th of January, 1897, Mrs. Heyman, who was a widow, conveyed the tract so conveyed to her to the defendant Mrs. Goodman by deed, in which the consideration is expressed to be $3,200. That deed was prepared in the office of Mr. Goldenhorn, in Jersey City, and acknowledged before him. It contained words of bargain and sale, but no covenants. On the 5th of February, 1897, Mr. Littenberg, with his wife, conveyed the tract previously conveyed to him to Mrs. Goodman by a similar deed, prepared and executed in the office of Mr. Goldenhorn, in which the consideration named is $1,750. The property covered by the conveyance to Mrs. Heyman is free and clear of incumbrance. That conveyed through Littenberg to Mrs. Goodman is incumbered by a mortgage of $1,750, which, however, is not mentioned in the deed.
The direct proof of fraud, as distinguished from divers circumstances also relied upon for that purpose, is furnished by Mr. Justus Frankel, a notary public of New York, where all the parties reside, who took the acknowledgments of the two deeds from Simmons to Heyman and to Littenberg. He was the confidential bookkeeper for Simmons & Co. for three or four years before they stopped business, and continued partly in their employment, as he declares, for two months afterwards. All of the parties are Germans, and speak our language somewhat imperfectly. Mr. and Mrs. Simmons, although answering and appearing by counsel, and attending most, if not all, of the hearings, were not called as witnesses; nor was Mr. Goodman, the husband of the defendant Mrs. Goodman, who drew the checks with which it is alleged she" paid for the property, nor her son, who, it appears, assisted her in the transaction of this business; nor were Messrs. Myers & Bronner, who superintended the conveyance from Simmons and wife to Mrs. Heyman and Mr. Littenberg. The evidence of Mr. Frankel is to the following effect: That the $10,000 paid to Simmons & Co. by the auctioneer for the stock of goods was paid in actual cash, principally in $100 bills, and was then taken possession of by Mrs. Simmons, and never deposited in bank; that, a short time afterwards, she and her husband and Mrs. Heyman, who was a personal friend, formed the scheme of placing this Monmouth county property beyond the reach of Simmons' creditors; that the scheme was devised between the three, and that he (Frankel), who was on confidential terms with the Simmonses, was cognizant of it; and that all parties met to carry out that scheme at the office of Messrs. Myers & Bronner on Saturday, December 19th, in the afternoon. The deed to Littenberg was then prepared and executed as security for the payment of the debt which the Simmonses owed him, and was put on record, —all against Littenberg's will. He was unwilling to accept it as security, and demanded the cash; and at the time, or shortly afterwards, as both he and Frankel swear, he had in his possession or control security, in the shape of accounts or actual goods, nearly or quite enough to secure him.
With regard to the land conveyed to Mrs. Heyman (and it will be convenient to consider it somewhat by itself), Frankel swears that the facts are these: That Harris was there at Myers & Bronner's offices on December 19, 1896, with his mortgage or the title deeds, or whatever it was that he or his wife had to show as security, and delivered them up; that at the same time Mrs. Heyman drew her check, previously mentioned, for $2,350, dated two days ahead, on the Union Square National Bank, which was indorsed by the Simmonses, and handed over to Harris, and accepted by him, and that he left; that then, when no one but Frankel, Simmons and wife, and Mrs. Heyman were in the single room of the suite of offices in which the transaction took place, Mrs. Simmons took from her bosom, mostly in $100 bills, the amount of the check which Mrs. Heyman had given to Harris, and handed the same to Mrs. Heyman, and the same was taken by her, pursuant to an understanding that she was to hold the property for the benefit of Mr. and Mrs. Simmons. Frankel further swears that at the time of the failure Mr. and Mrs. Simmons, or one of them, were the owners of a shoe department in the store of Furst Bros., in Jersey City, which was runin the name of a relative of theirs by the name of William R. Levy; that shortly afterwards they brought the stock of shoes from Jersey City, and obtained a section of the store on Fourteenth street then controlled by Mr. Friedman, and there offered the shoes for sale during the month of December and the first few days of January; that the Simmonses had their headquarters at this store in December, 1896, and the first part of January, 1897, and that he (Frankel) was there looking after the winding up of the business of Simmons & Co.; that most of the good accounts of Simmons & Co. had been assigned to various creditors to secure them, and that those that were not so good had been assigned by Simmons & Co. to Mrs. Simmons, and that he assisted the various parties who held these assignments in the collection of their debts, being still on confidential terms with the Simmonses; that one afternoon, early in January, Mrs. Heyman was in this store in confidential conversation with the Simmonses, and that Mr. Simmons stated that he was advised by his counsel that the Highlands property must be transferred to another party to hold for them, and that it was not safe in its present situation; that, after conferring together, Mrs. Heyman suggested that Mrs. Goodman, a friend of hers, would be a good party to hold it for them; that thereupon the Simmonses sent a lad, Lippman Simmons, a nephew of theirs, who was assisting in selling goods, to Mrs. Goodman, who, with her husband, kept a fancy dry-goods store on Grand street, and that at about 4 o'clock in the afternoon Mrs. Goodman came there, and was pointed out to him, and entered into conversation with the Simmonses and Mrs. Heyman, which he heard; that the matter was explained to Mrs. Goodman fully, viz. that they desired another party to hold this property for the benefit of the Simmonses, and she was asked to hold it; that Mrs. Goodman at first refused to have anything to do with it, but afterwards, upon the persuasion of Mrs. Heyman, agreed to accept the title, and to give back a paper to the Simmonses showing that she held the title for their benefit; that it was also stated that it might be well for her to pay the money, but that it would be immediately returned to her; that he was not cognizant of the circumstances immediately attending the conveyance from Mrs. Heyman to Mrs. Goodman, but that subsequently Mr. Simmons showed him a paper, purporting to be signed by Mrs. Goodman, by which she undertook to convey the property to such person as Mr. Simmons would direct.
Mr. Frankel was subjected to a severe cross-examination by the counsel for the Simmonses, and also by the counsel for Mrs. Goodman. The only interest which Frankel seems to have in the case is this: That he was an old dealer with the complainant, and a friend of its officers; that when the note in this suit was renewed in October, 1896, before the failure, the bank at first refused to renew it; that he then went to the officers of the bank, and induced them by his own personal solicitations to renew it; and that he felt under obligations to voluntarily disclose all that he knew in the matter, and to help in its collection. He is flatly contradicted by Mrs. Heyman, Mrs. Goodman, and perhaps by one or two others. But here it is to be remarked that neither of the Simmonses, nor their counsel in New York, was called for that purpose. With regard to the arrangement between Mr. and Mrs. Simmons and Mrs. Heyman, that she should be furnished by the Simmonses with money to pay Harris, and should hold the property for the benefit of the Simmonses, he is corroborated by Mr. Littenberg, who swears he heard that matter talked over between the Simmonses and Mrs. Heyman at the office of Myers & Bronner on the 19th of December.
I will now state some of the matters relied upon to contradict Mr. Frankel, by facts and circumstances and the evidence of witnesses other than Mrs. Heyman and Mrs. Goodman. In the first place, it was attempted to be shown by the evidence of Lippman Simmons and Abraham Levy, two of the persons employed in the Fourteenth street store, and relatives of the Simmonses, that the stock of shoes there sold belonged to a Mr. Alexander; that Simmons and wife had no Interest therein, were not attending or making their headquarters at that place, and were seldom there; that Frankel was also seldom there; and that the whole story with regard to what occurred in the Fourteenth street store was afabrication.
After that evidence to contradict Mr. Frankel was given, other witnesses were produced by complainant, who fully sustain his statement in that behalf. In the first place, a Mr. Benari, who was in the employ of Simmons & Co. at 734 Broadway, swears that Mr. Levy, who was the nominal owner of the shoe department in Jersey City, came regularly at stated times to the store of Simmons & Co., in New York, before they stopped business, and brought the moneys collected, and an account of sales and purchases made by him for the store in Jersey City, and that the whole was entered on the books of Simmons & Co., and checks were drawn by Simmons & Co. to pay the bills representing goods bought by Levy for the Jersey City store. Benari further swears that Simmons & Co. did not pay him all the wages due to him, and that he pursued them with industry to obtain payment and frequently called at the store in Fourteenth street and there saw both Mr. and Mrs. Simmons attending to business, and that on one occasion, late in the day, Mr. Simmons, in his presence, sold a bill of shoes to a person, and received the money therefor, and the witness insisted upon Simmons paying the money over to him, and that he did pay it to him. In the next place, Mr. Friedman was produced, and he swore that some time aboutthe latter part of November, 1896, he was sent for, and was then introduced to Simmons and to Myers & Bronner at the latter's offices, and that Simmons transferred to him three promissory notes, which he held, made by William R. Levy, the nominal proprietor of the shoe department in the Jersey City store; that at the request of Simmons he immediately went to the Jersey City store, and demanded payment or security of Levy, who with great promptness and cheerfulness gave him a chattel mortgage on the stock of goods in the store to secure the notes; that the giving of this chattel mortgage created a stir among the creditors of Levy and the landlord, which resulted in various legal proceedings, the particular details of which were not given, and a public sale of the goods by the sheriff; that he (Friedman) was obliged to pay the sheriff a sum of money, the precise amount of which was not stated, in order to obtain title to them; that he immediately boxed them up, and took them to his store on Fourteenth street; that this was all done at the request and with the concurrence of Simmons, and for his benefit and that of his wife; that he (Friedman) demanded $200 for his trouble and risk, and that Mr. Simmons paid him the amount which he had paid to the sheriff and $200 for his trouble and risk; that he, by Simmons' direction, made a bill of sale—prepared by Myers & Bronner—of the goods to Benjamin Alexander, a nephew of Simmons, who kept a shoe store in Eighty-Fifth street, New York City; that he recognized Simmons as the proprietor and owner of the goods, and that the whole thing was done at Simmons' request; and that Simmons and wife were in constant attendance at the Fourteenth street store, supervising the sale of the goods. Then a Miss Green is produced as a witness. She appears to have been a saleswoman in the Jersey City store, is a resident of New Jersey, and, so far as appears, entirely disinterested and reliable. She swears that she was employed by Mr. Simmons for two or three weeks during the holidays to help sell out the stock of goods at Fourteenth street; that she there became acquainted with Mr. Frankel and Mr. and Mrs. Simmons, and with Lippman Simmons; that one afternoon in January, being the last day that she worked there, Mrs. Heyman and Mr. and Mrs. Simmons were in the store, talking together, and that Mrs. Goodman came in and entered into conversation with them; that her attention was directed to Mrs. Goodman, as she entered the store, by her excited manner, and that she asked Mr. Frankel who that lady was, and was informed by him that she was Mrs. Goodman; and she testified that she was the identical person whom she had seen on the witness stand and in court as Mrs. Goodman.
It was further attempted to be proved that Mr. Frankel was in error in the date fixed by him of the meeting of Simmons and Mrs. Heyman and Mrs. Goodman in the Fourteenth street store. He does not pretend to fix the date with any certainty. He says it was in the first half of the month of January, 1897. He thinks it was towards the middle of January. The defendants' witnesses attempt to show that the sublease from Friedman to the Simmonses ended with the month of December, and that the goods were moved away shortly afterwards. But I think the weight of the evidence, including that of Miss Green and Mr. Friedman, is that the Simmonses stayed there for several days during the month of January. How long, I think, is a matter of little importance. Miss Green gave a clue by which the day she fixed for the interview might have been determined with certainty. At the time of the giving of her evidence the defendants had in their possession the drayman's receipt for moving the unsold goods from the Fourteenth street store, which bore date January 6th, but could not at that moment prove it, and the case was closed without its proof. Three weeks after the evidence was finally closed, and just as the argument was about to commence, the defendants produced the drayman, and the case was opened to take his evidence, but no attempt was made to show that it conflicted with Miss Green's evidence; so that it is fair to infer that it did not. Mr. Frankel's evidence was given in a straightforward manner, and he nowhere contradicted himself in any material matter. So far as there were any apparent contradictions, they were due to the fact that his language was not always clearly understood by the stenographer. I feel bound to say that his evidence impressed me as being truthful. The attempt to discredit it by showing that his statements as to the Simmonses' relations with the Fourteenth street store were false is a complete failure, which, I think, should react against the defendants.
This brings me to the evidence of Mrs. Heyman. She swears that she is a widow, her husband having died in the year 1892 and left her considerable means, and that she had a daughter and son-in-law, who lived with her; that she was well acquainted with the property in question, having boarded one or two summers in the immediate neighborhood; that she was also well acquainted with the Simmonses, and that she had felt and expressed a desire, some time before the 24th of November, 1896, to purchase this property: that, after she heard that the Simmonses had failed, she learned from them that they needed money, and she then proposed to buy the property from them; and that she agreed to buy it, and to pay them $3,100 for that part of it which was not subject to mortgage. She understood it was held in two parcels, and that one part was subject to a mortgage, and that one was not. She says that she purchased it for the purpose of building a summer residence there for herself and her daughter and son-in-law, but she says she made nomention to them of her intention to purchase it before doing so; that she went on December 19, 1896, by appointment with the Simmonses, to the offices of Myers & Bronner, counsel of the Simmonses; that she had no other lawyer to assist her, although she had a stated counsel, whom she named, and who was her legal adviser. She at first said that she had a search of the title of the premises made. Afterwards she said that she relied entirely upon the statements of Mr. and Mrs. Simmons, and of their lawyers, that the title was all right. She swore that she knew nothing about Mr. Harris, would not know him if she saw him, and had no recollection of having seen him or heard that he had any lien or claim upon the property; that she at that time had in a safe in her house over $2,000 (she finally fixed it at $2,500) in money, and a balance to her credit in bank; that she met the Simmonses at the office of Myers & Bronner, and there drew her check, dated the next Monday (the 21st) for $2,350, and gave it to the Simmonses, and also gave them her duebill, dated the 19th, for $750, at four months, with interest, payable to her own order at her house, the two sums making $3,100; that she did not look at the deed, nor examine it, but left the validity of it, the state of the title, and the recording of the deed to her friends, the Simmonses. She denies positively that Mrs. Simmons gave her any money on that or any other occasion, and denies all bargains to hold the property for the Simmonses. The check in question is produced by her, dated December 21, 1896, drawn by Eva Heyman on the Union Square Bank, to the order of J. and F. Simmons, for $2,350. It is certified on December 21, 1896, and bears the indorsements of Jacob and Fanny Simmons and Jacob Harris, and it seems to have passed through the Bowery Bank. The note alleged to have been given by her at that time is also produced by her, and bears upon its face no evidence, whatever of ever having been paid, or of passing through any other person's hands.
Mrs. Heyman swears that she went to the bank on Monday, and deposited to her credit enough money to make her account good for that check. This evidence was given at a time when she did not have her bank book with her, but when she did have before her the note and certified check. At the time of their production she swore that she generally kept—preserved—her checks. At that time I requested her to bring her bank books and her bank vouchers at the next session, particularly emphasizing her bank vouchers. At the next session, six days later, she did bring her bank books, but did not bring her other bank vouchers, nor give any excuse for not bringing them. By one of the bank books it appears that on the 21st of December she did deposit $1,500 to her credit in the bank. She was closely pressed on cross-examination, on her first appearance on the stand, as to where she got the money that she put in the bank on that day,—December 21st. She swore that she had kept it in her safe in her house, and that she had had it there for several months; but she was unable to tell from what immediate source she obtained that identical money. At one part of her examination she said it was left to her by her husband; at another, she said that some of it was paid to her in parcels of smaller sums. She also stated that she had a savings-bank account, but did not state in what bank, and never did produce any written evidence of having such a bank account. Pressed to know why she kept that amount of money in her safe lying idle, she said she could not get interest for it in the bank; that a "business bank," as distinguished from a savings bank, did not pay interest. Her reason for not depositing it in her savings bank was that she could not get interest for it there unless it remained six months. Without either admitting or denying that she had received $500 from the Simmonses for a debt due her at the date of their failure, she made no mention of it at all as a source from which she got the money to deposit on the 21st of December. Her explanation of the source of that money was quite unsatisfactory to me at the time it was made, and a reading of her evidence does not remove, but rather deepens, the impression got at the time.
At the next sitting of the court she produced two bank books with the complainant bank, which show that her husband, L. Heyman, had an account in the complainant bank, commencing in 1880. and running on continuously to the 17th of June, 1896, if not later; that it was continued without interruption after his death, his name being erased on the exterior of the bank book, and "Eva Heyman, Executrix," being written under it. The account shows that about the date of the death of the husband, or shortly after, the bank commenced to pay interest on the deposit every month. Very few deposits were made. Drafts were drawn from time to time, by which the balance, which was originally about $9,000, was drawn down to about $5,000 in 1893, and then, in January, 1894, to about $2,000, and continued at about that sum, being slightly diminished from time to time until June 17, 1896, when it was $1,624.97. From that time on no further credits of interest are given, and there are no debits for checks drawn. According to the book, that amount is still standing to her credit as executrix. Besides that account, she has an individual account with the same bank, kept in another book, to which I will refer directly. On the occasion of her going on the stand the second day, she stated that the $1,500 which she placed to her individual account on the 21st of December were the proceeds of this balance standing to her account as executrix on the 17th of June, 1896; that she drew that money out about that date, and kept it in the house. When pressed to produce the check with which she drew it.she said she was not sure that she drew any check; that the bank officer may have given her the money on her book. But there is no such charge against her on the book. She testified that she drew it out because the bank officer refused to pay her any more interest, and to that extent the book corroborates her. But when we turn to her private bank account, which commenced in 1892, presumably not long after her husband died, we find that she is credited with interest regularly every month on her deposit, both before the date in question and since, until March 1, 1897. So far as can be ascertained by the entries on her bank account, without having in hand the vouchers,—the entries of charges against her being without date,— she had to her credit, when she drew the $2,350 check, and before she deposited the $1,500, $1,278.40. Immediately after the charge of $2,350, she is charged with $830, the voucher for' which is not produced. She is further credited, besides the $1,500 of December 21st, on the 15th of February, 1897, with $2,000, which undoubtedly is the check which she received on that day from Mrs. Goodman, as will be seen further on; and that, with another credit of $50 and some interest, left a balance in her favor on February 17, 1897, of only $1,856.17; and that balance has since been gradually reduced, until, on June 10, 1898, it was only $260.95. She swears that she paid the $750 note to the Simmonses, some time before it was due, out of money she had in her safe over and above the $1,500 which she deposited on the 21st of December. She was pressed to explain why she should have drawn a check for more than she had in bank, and given a note for the balance, when she might have drawn her check for just what she had in the bank, and paid the balance out of money in her safe, or might have applied all the money she had in the safe to the payment, and drawn a check for the balance. She failed to give any satisfactory answer, and failed entirely, though pressed, to explain why she was willing to give a note, payable with interest, when she had the money in her safe lying idle.
With regard to the conveyance to Mrs. Goodman, she swears that Mrs. Goodman paid her $100, by a check of her husband, Marx Goodman, on January 20, 1897, which check is produced, and bears her indorsement, and passed through the Union Square Bank; but the whole was not deposited to her credit on that day. A deposit of $50 to her credit on that day does appear. She swears that the whole of the consideration money from Mrs. Goodman to her was settled at first by that check, and by Marx Goodman's note, dated January 21, 1897, for $3,100, payable 25 days after date, which note is produced; and she swears that Mrs. Goodman paid her $2,000 more on the 15th of February, 1897, by her husband's check for $2,000, which is produced, and which was deposited to her credit in the Union Square Bank on that day. She says the balance of that money—$1,100 —was paid to her in cash, and in whole or in part deposited by her in the bank, but no such deposit appears. There are, however, several small deposits, some apparently of checks put to her credit, after that date. Her bank book was balanced on March 25, 1897, and only $1,059.92 is to her credit. Between February 16th and March 25th she had drawn one check of $450, another of $400, and another of $125, besides several small checks. It might have thrown some light upon the case if those three checks, together with the one of $830, before mentioned, had been produced, so that we might see what she did with that money. This much, however, does appear: That, according to her story, she started out on the 21st of December with $2,500 money in her safe, and $1,278.40 to her bank account, making altogether about $3,780; that she deposited, of the money in her safe, $1,500 to her bank account, from which she paid $2,350 of the purchase money of these lots, and the balance, $750, she paid out of the balance of the money in her safe; that she received from Mrs. Goodman $3,200 in cash, which should have advanced her financially $100. But we find that, without stating at all at the hearing that she had any money in her safe, her bank account was constantly dwindling, so that the whole of the $2,500 in her safe vanished by the 17th of February, and by the 25th of March her balance was reduced to $1,059.92.
I will here notice a piece of rather remarkable evidence as to the transactions in the office of Myers & Bronner on the 19th of December, given by Mr. Abraham Levy, a nephew of the Simmonses, and one of the salesmen in the shoe department in the Fourteenth street store. Mr. Levy swears that he was present at the office of Myers & Bronner on that occasion; that he saw the check for $2,350 delivered by Mrs. Heyman to the Simmonses, and by them transferred to Mr. Harris; that Mr. Harris gave up his mortgage at that time, and that he (Levy) immediately went out with Harris to the Bowery Bank to deposit the check; that Mr. Harris did deposit the check on the very day that he received it from the Simmonses at Myers & Bronner's office; that it was at that time already certified, and that the amount due to Harris was not so much as $2,350, but only a little over $1,000; and that the balance, amounting to over $1,000, was drawn out by Harris in cash from the Bowery Bank, and handed to him (Levy), and carried by him to the Simmonses, and delivered to them. If there be any truth in this evidence, it increases the improbability of the whole story. It leaves entirely unexplained how the sum of $2,350 was fixed upon for the amount of the check that Mrs. Heyman gave the Simmonses. One can understand that if the amount due Harris was $2,350, and Mrs. Heyman had that much money in bank, it would be natural for her to draw a check for thatamount, in order to satisfy Mr. Harris' claim upon the property, and give her duebill for the balance, to be paid as soon as she could raise the money for that purpose. But it is difficult to understand why she should draw her check, postdated two days, for a greater amount that she had in bank, and that for not an even sum, and why that check should be indorsed over to Mr. Harris, unless that was the precise sum which his wife was entitled to have to discharge her lien upon the property. Here, again, it is to be remarked that Mr. Harris is not produced as a witness, and no reason is given why he is not called. The only motive I can imagine for the drawing of the check for more than Mrs. Heyman had in bank, and for more than was due to Mr. Harris, is that it was to confuse the whole transaction as much as possible. A careful examination of the evidence of Mrs. Heyman with regard to her financial affairs satisfies me that her statement with regard to the payment of this money is not true.
There are two or three other circumstances to be noticed, bearing upon the bona fides of this purchase by Mrs. Heyman. She swears that she had a private counsel of her own, who advised her with regard to her business affairs, and yet she did not employ him to assist her in the purchase of this property,—either to look into the title or to scrutinize the deed which she got. In the next place, she says that she purchased it for the purpose of making a home for herself and her daughter and son-in-law, without at all consulting them in advance about it, and then, soon after she purchased it, they disapproved of the transaction, and refused to go there to live, and that their refusal induced her to sell it. And then, again, she swore that she understood that she was getting only a part of the whole plot owned by the Simmonses, with the location of which she was familiar, and that she understood that she was getting that end of the plot which adjoined Neil Burgess' house, whereas, in fact, the deed to her covered the end next to the Comstock boarding house, and the part next to Neil Burgess' house was conveyed to Mr. Littenberg. Now, it seems highly improbable that she would make a real purchase of this kind without consulting her daughter and son-in-law, without having the actual location of the lot ascertained beyond mistake, and without having her own counsel look after her interests in the affair, and see that she was getting what she was purchasing. She denies positively all knowledge of Mr. and Mrs. Simmons owning or being interested in a shoe department in any store on Fourteenth street; admits that she on one occasion saw Mrs. Simmons in a store on Fourteenth street, when she herself was shopping, and that Mrs. Simmons was dressed as she would be if she were shopping; denies that she had ever met Mrs. Goodman and Mr. and Mrs. Simmons in Fourteenth street, and that any arrangement for Mrs. Goodman to take the property in trust for the Simmonses was made there, or at any other place. She alleges that she had known Mrs. Goodman for a long time, and met her at a ball or theatrical performance in a public hall, and herself introduced the subject of selling the property to her, and that the two made the bargain between them.
Upon the whole, I am entirely satisfied that Mr. Frankel's account of the whole transaction, so far as relates to the conveyance to Mrs. Heyman, is the true one, and that she paid nothing for the property, but held the title for the Simmonses; and, upon the evidence of the witnesses already referred to, the clear weight of the evidence is that Mr. and Mrs. Simmons and Mrs. Heyman and Mrs. Goodman did have the Interview in the shoe store in Fourteenth street, in which the transfer of the property from Mrs. Heyman to Mrs. Goodman, to hold for the Simmonses, was agreed upon, as stated by Mr. Frankel.
I come now to the evidence of Mrs. Goodman. She swears that her husband keeps a fancy dry-goods store in Grand street, New York, and has done so for nearly 30 years; that between them they are people of means; that she was well acquainted with Mrs. Heyman for many years, and merely knew the Simmonses by sight, and had no intimacy with them. She denies altogether any visit to Fourteenth street, or any interview whatever with the Simmonses with regard to the purchase of this property. She corroborates Mrs. Heyman in stating that she met Mrs. Heyman at some public gathering, either a ball or a theatrical performance, or something of that kind, when the matter was broached, much as Mrs. Heyman had stated in her evidence. (And here I observe that it is a little remarkable that neither of them, after thinking the matter over and talking about it, was able to fix the precise character of the public gathering at which they met, and the time and place thereof.) She swears that Mrs. Heyman told her that she owned this property, describing the location generally, and that she frankly stated that she had paid $3,100 for it, and was willing to sell it for $3,200: and Mrs. Goodman swore, in the first part of her direct examination, that she then and there agreed to purchase it, and to pay Mrs. Heyman $3,200 for it. She says that she had never seen the property, and that she went with her husband to look at it, following directions how to find it given her by Mrs. Heyman; that they looked the property over (all this was in the dead of winter), and that she supposed that she was buying the whole vacant land between the Burgess house and the Comstock boarding house, being told that it was all part of the Comstock property; that after she came back she was advised by her son to call on Mr. Goldenhorn; of Jersey City, as counsel, to examine the title and supervise the transfer, though, strangely enough, shestates that her object in calling on him was to ascertain whether the property was worth the price she was to pay. She had never before seen Mr. Goldenhorn, but her son was acquainted with him. She went to him with Mrs. Heyman, who had an abstract of the title of the property (so Mr. Goldenhorn swears), and employed him to examine the title. He undertook to examine the title, she being satisfied that he should continue the search from the date of the abstract, which included the Simmons title. She learned from him that Mrs. Heyman did not own the whole of the tract which she supposed that she was buying, but only a part of it, and that the balance belonged to Mr. Littenberg. She nevertheless persisted in completing the purchase at the price originally agreed upon for the whole, although the quantity which she got had only about half the frontage on Navesink avenue of the whole lot which she thought she was buying, and was the least desirable of the two plots, that next to the Burgess lot being the most desirable. She swears that her husband was opposed to her investing in country property, and, so far as appears, neither had had any experience upon which to base a judgment upon the value of this plot. She swears that she consulted with no one upon that subject,—sought no advice of any expert upon it; that, after Mr. Goldenhorn had completed his search, Mrs. Heyman and she attended at his office, Mrs. Heyman executed the deed, she gave her husband's check to her own order for $100 on account of the purchase money to Mrs. Heyman, and then returned to the city, and gave Mrs. Heyman her husband's note for $3,100, payable 25 days after date, as already stated; that some time later, but before the note matured, she paid $1,100 in cash on account of it to Mrs. Heyman, though the note shows no indorsement of that payment, and finally, on the 15th of February, 1897, gave her husband's check for $2,000, to the order of Mrs. Heyman, which was delivered to her, and which Mrs. Heyman received and passed to her own credit on that day, as we have already seen. This duebill and this check are in the handwriting of Mrs. Goodman's son. She swears that, desiring to get the whole tract, she immediately sought out Mr. Littenberg, and bargained with him for the balance; that he asked $2,000 over and above the mortgage, and that she offered $1, 600; that, before coming to any agreement as to price with him, they went together to Jersey City, to Mr. Goldenhorn's office (and Mr. Goldenhorn swears, on that topic, that they had not come to an agreement as to price when they reached his office); that they there agreed on the price, and Mr. Goldenhorn was directed to prepare a deed, but that, as Mr. Littenberg's wife was not with him, the matter was not closed that day, but that the next day Mr. Littenberg came over to Jersey City with his wife, and executed the deed, and returned to the city, and Mr. Goldenhorn sent a messenger to Mrs. Goodman's store to inform her that the deed had been properly executed; that she then gave her husband's check for $25 to Mr. Littenberg, which was indorsed by Mr. Littenberg, and sent to Mr. Goldenhorn, as that gentleman swears, though it bears no marks of having passed through Mr. Goldenhorn's hands; that she also gave him her husband's note at 52 days for $1,725, payable to the order of Littenberg at her store, 201 Grand street, and subsequently, on the 29th of March, 1897, she gave him her husband's check for $1,000, and later on, April 17th, she gave his further check for $725, all of which are produced, and appear to be indorsed by Mr. Littenberg.
Mr. Littenberg's account of this transaction is that he was called upon by Mr. Simmons,— for whose benefit he swears he held the property, having received the whole, or nearly all, of his debt from Simmons,—and was requested to make the deed to Mrs. Goodman; that he met her on the ferryboat, crossing the ferry to go to Mr. Goldenhorn's office (and in this he is corroborated by Mrs. Goodman), and that Simmons was with them; and that a running conversation occurred between Simmons and Mrs. Goodman in his presence, in passing from the ferryboat to Goldenhorn's office, in which it was distinctly understood that the money that Mrs. Goodman was to pay him (Littenberg) for the property was to be repaid to her (Mrs. Goodman) by the Simmonses, and that Mrs. Goodman was to hold the property for the benefit of Mr. Simmons. This is denied by Mrs. Goodman. Littenberg further swears that while the note was given to him. and he did have it in his hands, and indorsed the payment of $1,000 upon it when the $1,000 check was given, yet in point of fact the note was actually retained by Mrs. Goodman, and never was under his control. He further swears that he turned over the whole of the proceeds of the two checks, except the $25, to Mr. Simmons.
The value of Mr. Littenberg's evidence is attacked on the ground that he had given a different statement of these transactions in his examination as a witness in New York on the 28th of April, 1897, in supplemental proceedings on a judgment in King v. Simmons. He was asked several questions when on the stand with regard to that evidence, but no proof was given of what he had sworn to until after he had left the stand. At the next session the stenographer who took his evidence was produced, and proved the whole of the examination, and the same was admitted only to the extent to which his attention had been previously called to it, and to that extent only do I feel at liberty to use it. The only matters to which his attention was called, and in which he appears to be contradicted, are as follows: First, that he stated in the New York examination that Mrs. Goodman called upon him to purchase the property of him, and he did not state that Mr. Simmons had brought the parties together; and, second, that he did not state on his examinationin New York that the possession of the note which he got for the property in the first place was retained by Mrs. Goodman, but left it to be inferred from his evidence that the note was handed to him and retained by him in the ordinary way. I have not felt at liberty to take into consideration some other matters appearing upon the face of this examination, which may or may not tend to contradict Mr. Littenberg. Those already referred to show only that he did not voluntarily expose to the examiner in the New York case the fact that Mr. Simmons was interested in the property conveyed by him to Mrs. Goodman. Mr. Littenberg's manner on the stand was good. He appears to be entirely disinterested, and I do not feel justified in disregarding his evidence; but, at the same time, I cannot place the same confidence in it that I do in that of Mr. Frankel and Miss Green.
Returning to the probability of Mrs. Goodman's story: It appears that within the course of two months Mrs. Goodman paid for these two pieces of property $4,950, all of which she swears she furnished to her husband to meet his checks. Pressed to state where she got this money, she said that she had it in several different savings banks, and promised to bring her books with those banks, or copies of them, to be offered in evidence. She failed to show deposits in savings bank, except to the extent of $600. She does produce a copy of an account which she had in the Bowery Savings Bank, one of those which she mentioned, by which it appears that she had on deposit on the 15th of February, 1897, about $090, and that on that day she drew $600, corresponding with the date of her husband's check to Mrs. Heyman for $2,000. No other deposit was shown. Neither the husband nor the son of Mrs. Goodman is called as a witness, nor are the bank books of the husband produced, nor is any other evidence produced to show from whence she obtained this large sum of money. She gives no explanation of why she was willing, after supposing that she had bargained for the whole of the tract between the Burgess and the Comstock houses, to take one-half of it for the same price that she had agreed to give for the whole. Then comes a remarkable circumstance: Mr. Goldenhorn went upon the stand, and swore on cross-examination that his attention was called to the character of the two conveyances from the Simmonses to Heyman and Littenberg, respectively, and that he observed that they did not contain any words of grant, nor any covenants, and that the consideration named was one dollar; and he swore that he stated to Mrs. Goodman at the time, and before she took the title, that the deed to Mrs. Heyman, then particularly under consideration, was good for nothing. The exact language which he uses is this: "Q. Did'nt you criticise that deed to Mrs. Heyman? Did you think that was the right kind of a deed? A. I did, at the time; I told my client that it was my judgment that that deed was no good. She said she had known Mrs. Heyman a great many years and they were dear friends, and it would be all right." Then, in the face of that opinion and that advice, in preparing the deed from Mrs. Heyman and also that from Littenberg to Mrs. Goodman, the latter being his client, he used an ordinary deed of bargain and sale, without any covenants whatever on the part of the grantors. When asked to explain why, under such circumstances, he would adopt and advise his client to accept that sort of a conveyance, he frankly declared that he was unable to explain it, and did not know why he used a deed without any covenants whatever. The reason given by Mrs. Goodman for accepting this doubtful title from Mrs. Heyman, namely, that she was a "dear friend," does not apply to the case of Littenberg, who was a stranger to her. Another circumstance: It was known that the property was subject to a mortgage, but, so far as appears, no inquiry was made as to how much interest was due on that mortgage. No reason was stated why Mr. and Mrs. Simmons were not put on the stand—although attending in the court room a portion of the time, at least—to state what they knew about these transactions, and no reason was given why Mr. Goodman and his son should not go on the stand and state what they knew about it, and especially why Mr. Goodman should not show from whence came the large sum of money, just mentioned, which his wife appears by the checks to have paid for this property, and whether it was not—as in the case of Mrs. Heyman—actually furnished by the Simmonses, or, if not, whether it was not repaid by them. The importance of Mr. Goodman's proving clearly that the money so paid was his own or his wife's money, and was not repaid, could not have escaped the attention of the able and efficient counsel who appeared for the defendants in this case. Again, it is to be observed that Mrs. Heyman was quite willing to take the note of the husband of her friend for this property, and that Mr. Littenberg was also so willing; but he swears that he did it under Mr. Simmons' direction.
Now, the question arises whether the evidence of Mrs. Goodman, under these circumstances, is sufficient to overcome the positive evidence of Mr. Frankel, supported, as he is, by other witnesses, that the interview and conversation he swears to did occur between the Simmonses, Mrs. Heyman, and Mrs. Goodman in the Fourteenth street store, in which the reasons for the transfer from Mrs. Heyman to Mrs. Goodman were stated, and she agreed to hold the property for the benefit of the Simmonses. I find myself unable to resist the conclusion that the interview in Fourteenth street did take place, and that conclusion suggests at once the query: Why deny it? Why make such an effort to show that the Simmonses were not the real proprietors of the shoe store there? No motive appears for such denial, except that the interview so held was not an innocent one. The effect ofa very careful review of all the evidence is to lead my mind to the conclusion that Mr. Frankel's story is essentially true. There is a striking similarity in the relation, as detailed by Mr. Frankel and Mr. Littenberg, of Mrs. Goodman to the Simmonses with regard to the Monmouth county property, to that of Mr. Friedman with regard to the stock of boots and shoes in Jersey City. With regard to that stock of shoes, it is plain, from Mr. Friedman's evidence, that in November, 1896, he was a stranger to both the Simmonses and their counsel, Messrs. Myers & Bronner; that he was sought out by the latter as such stranger to act as a figurehead for the Simmonses in procuring the title to the stock of boots and shoes, and having it so disposed of as that the Simmons' interest in it would be concealed. Then, in the case of the Monmouth property, according to Mr. Frankel, the Simmonses were advised that the title was not safe resting in Mrs. Heyman, but should be transferred to some other person, and Mrs. Goodman, a comparative stranger to the Simmonses. was chosen for that purpose.
If Frankel's evidence be true, then it was not contended by counsel that these conveyances could stand, even though Mrs. Goodman actually parted with money; for it is not necessary to cite authority for the position that if one person buys property of another, and pays for it, knowing that the whole transaction is intended for the purpose of enabling the vendor to put the money in his pocket and prevent his creditors from reaching it by judicial process, the fact that money is actually paid and finally parted with does not cure the vice in the transaction, but the party paying the money under such circumstances must lose it. The result is that if I were satisfied, which I am not, that the whole of this $4,900 which passed by checks from Marx Goodman to these various parties was his own money, or that of his wife, and was not furnished, for the purposes of the transaction, either directly or indirectly by the Simmonses, or repaid by them, I should be of the opinion that the complainant would be entitled to relief. Upon the whole case I am of the opinion that the complainant is entitled to the relief prayed for, and will so advise. Mrs. Goodman will be allowed a lien for any taxes or interest on the mortgage which she may have paid.
It is proper to add that it was stated by counsel that the Simmonses had appeared to the attachment suit against them, and had pleaded to a declaration tiled in the cause payment of the judgment; that some moneys had been realized by the complainant bank out of certain collaterals, which the Simmonses were entitled to have go as a credit on the judgment, and reduce the complainant's recovery in the attachment suit to that extent. The answer of the Simmonses herein sets up payment in full of the judgment, but no proof was offered to support it. The parties rested their cause upon the understanding that a considerable sum was still due on complainant's demand in the attachment suit, and that the amount would be determined, either by agreement or by the trial of an issue in the cause. Of course, the complainant must be confined in its remedy to the amount due on the judgment.
Further, there were two attachments issued by the complainant, of which I have only noticed one; the other being against Fanny Simmons alone, and based on a judgment recovered by the complainant bank against her in one of the New York courts for upward of $2,000. It appears that the title to a part of the premises in question was vested in Jacob Simmons and wife jointly, and a part in Jacob Simmons. This state of the title naturally gives rise to a question as to whether the attachment based on the judgment against Fanny Simmons alone gives the complainant any, and, if so, what, lien upon the lands the title to which stands in the husband and wife jointly. These questions have not been considered, and will be disposed of when formally brought before the court.