Karkus v. Siefert

169 F. Supp. 662, 1958 U.S. Dist. LEXIS 2301
CourtDistrict Court, D. New Jersey
DecidedMarch 17, 1958
DocketCiv. A. 505-57
StatusPublished
Cited by5 cases

This text of 169 F. Supp. 662 (Karkus v. Siefert) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Karkus v. Siefert, 169 F. Supp. 662, 1958 U.S. Dist. LEXIS 2301 (D.N.J. 1958).

Opinion

FORMAN, Chief Judge.

This is an action brought by Ezra W. Karkus, Receiver in Bankruptcy of Vreeland L. Siefert and Myrtle A. Sie-fert, against them, John F. X. Greene, Sudler Construction Company, Seymour Paskow and Wilmore Company. Plaintiff has discontinued it against the Wil-more Company. The purpose of the suit is to set aside certain deeds and mortgages alleged to have been made fraudulently during insolvency. Evidence has been heard and briefs have been submitted.

It is undisputed that on April 18,1957, involuntary petitions were filed against Vreeland L. and Myrtle A. Siefert. They were adjudicated bankrupt on May 8, 1957. Plaintiff was appointed receiver in each case May 20, 1957, and elected trustee, January 8, 1958.

Vreeland L. Siefert was the major stockholder of the Lincoln Foundry, Inc., which was adjudicated a voluntary bankrupt on January 9, 1957.

Together with his wife, as tenants by the entirety, they owned their residence on approximately five and one half acres of land located in Oceanport, Monmouth County, New Jersey, referred to hereinafter as the Oceanport property. Prior to December 20, 1956, it was encumbered with a first mortgage of $15,000, held by the Carteret Savings and Loan Association ; a second mortgage of $9,500, held by the Rutledge Realty Co.; and a third mortgage of $5,000, held by the Wilmore Company. The latter two mortgages, originally for $24,000 and $7,000, respectively, were arranged by defendant Seymour Paskow, and were given as collateral security for loans to the Lincoln Foundry, Inc.

On December 20, 1956, the Sieferts gave to defendant Paskow a mortgage in the sum of $8,500, on the Oceanport property, allegedly as security for prior loans made by Paskow to Siefert for the operation of the Lincoln Foundry. On January 8, 1957, the Oceanport property was conveyed by Vreeland L. and Myrtle A. Siefert, without consideration, to John F. X. Greene. It was subsequently conveyed, subject to the $15,000 first mortgage only, to the Sudler Construction Company, on April 23, 1957, for a $4,000 purchase money mortgage given to Greene, and $1,000, in cash, alleged to have been given by Sudler Construction Co. to Paskow. The $1,000 in cash is further alleged to have been returned by Paskow to Sudler Construction Company on the subsequent refusal by the Referee in Bankruptcy to approve a sale of the property.

Defendants Vreeland L. and Myrtle A. Siefert deny any wrongdoing. Defendants Paskow, Greene, and Sudler, however, do not contest plaintiff’s demand for a judgment setting aside the conveyance to Greene, the subsequent conveyance to Sudler, and the mortgage from Sudler to Greene. Defenses originally raised relative to the jurisdiction [664]*664of this court over the instant case and the right of the receiver to bring this suit, were dropped at the pretrial conference.

The sole issue now concerns the Sie-fert-Paskow mortgage. Plaintiff contends (1) that this mortgage is part of a larger scheme which involved the deed from Siefert to Greene, and the deed and mortgage transaction between Greene and the Sudler Construction Co., and that each transaction “was fraudulent and made with intent to hinder and delay the creditors of the bankrupt”; and (2) “that it [the Siefert-Paskow mortgage] also constituted a preference”. Both contentions were denied by Paskow, who, for his part, asserts that the $8,500 mortgage was to secure antecedent indebtedness, except for a sum of $525.12, which he claims to have given Vreeland L. Siefert on January 24, 1957, in reliance on the said mortgage.

The evidence disclosed that Paskow began a series of money transactions with Vreeland L. Siefert and the Lincoln Foundry, Inc. in 1954. It was shown that Lincoln Foundry, Inc. drew checks to Paskow from January to November of 1956 in the following dates and amounts:

Checks Issued by Lincoln Foundry, Inc. to Seymour Paskow During 1956

Date Issued Amount Exhibit No.

Jan. 2 $ 250.00 51A

Jan. 2 39.00 33

Feb. 3 750.00 46

Feb. 7 1,000.00 47

Feb. 9 150.00 51B

Feb. 9 250.00 51C

Feb. 10 750.00 48

Mar. 8 150.00 49G

Mar. 9 750.00 37

Mar. 16 750.00 36

Mar. 23 150.00 49

Mar. 30 750.00 38

Apr. 6 750.00 39

Apr. 23 1,187.51 40

Apr. 26 100.00 49E

May 10 100.00 49D

May 16 475.00 35

May 16 525.00 34

May 18 100.00 49B

May 23 100.00 49C

June 8 200.00 49A

June 26 200.00 49H

Aug. 9 240.45 50B

Sept. 6 250.00 50A

Oct. 15 2,500.00 41

Oct. 15 250.00 50C

Oct. 30 523.00 42

Oct. 30 150.00 50D

Nov. 1 2,000.00 43

Nov. 5 200.00 50E

Nov. 7 2,000.00 44

Nov. 15 2,000.00 45

Total....... ..$19,589.96

It appeared that Paskow arranged the Rutledge Realty mortgage of December 23,1954 and the Wilmore Company mortgage of February 8, 1956, which covered the Oceanport property as collateral security for borrowings of Lincoln.

Paskow asserts that the antecedent indebtedness supporting the Siefert mortgage to him was based upon four promissory notes, the dates and amounts of which are as follows:

Exhibit Date Amount No.

Oct. 25, 1955 $2,500 PI

Oct. 1, 1956 2,000 P2

Oct. 30, 1956 2,500 P3

Nov. 16, 1956 2,000 P4

Total.... .....$9,000

He concedes that he became “leery” of the financial condition of the Sieferts on December 20, 1956, which prompted him to ask them for the mortgage upon the Oceanport property for security. Then followed the circumstances, as he related them, whereby he caused the Sie-ferts to deed the property to an office associate of his, John F. X. Greene, con-cededly only a “straw” man, on January 8, 1957 who, with his wife, on April 23, 1957, conveyed the property to Sudler Construction Company, the proprietor of which was a real estate developer, an old time acquaintance of Paskow. The purported consideration of [665]*665the latter transaction was $20,000, which $1,000 was in cash, subject only to a mortgage held by the Carteret Savings and Loan Association, and providing for a purchase money mortgage to be given by Sudler Construction Company on the date of the deed in the sum of $4,000. of

Paskow asserted that it was natural for him to want to protect the money due him from the Sieferts and that it occurred to him that it would be a good idea if he could sell the Oceanport property for them with the understanding that out of the proceeds of such sale his indebtedness would be liquidated and any balance remaining would be turned over to Vreeland Siefert. Later it occurred to him that his friend Sudler might be able to develop the acreage surrounding the residence on the Oceanport property. He had John F. X. Greene execute the deed to Sudler Construction Company. Paskow did, indeed, together with Sud-ler, endeavor to persuade a zoning authority to permit a subdivision of the Oceanport property into lots and the construction of houses thereon, but they were unsuccessful. Later Paskow placed the property in the hands of a real estate broker, who actually arranged a sale of it for $32,500.

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Related

United States v. St. Mary
334 F. Supp. 799 (E.D. Pennsylvania, 1971)
In Re Lea Fabrics, Inc.
226 F. Supp. 232 (D. New Jersey, 1964)
Karkus v. Siefert
263 F.2d 333 (Third Circuit, 1958)

Cite This Page — Counsel Stack

Bluebook (online)
169 F. Supp. 662, 1958 U.S. Dist. LEXIS 2301, Counsel Stack Legal Research, https://law.counselstack.com/opinion/karkus-v-siefert-njd-1958.