Market Nat. Bank v. Hofheimer

23 F. 13

This text of 23 F. 13 (Market Nat. Bank v. Hofheimer) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Eastern Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Market Nat. Bank v. Hofheimer, 23 F. 13 (circtedva 1884).

Opinion

Hughes, J.

The defendant firm, Hofheimer, Son & Go., of Norfolk, Virginia, executed a deed of assignment, dated the twenty-third of July, 1883, to Theodore S. Garnett as trustee. They conveyed a stock of goods in a wholesale shoe business which they had been conducting in a double tenement, Nos. 84 and 86 Water street. They conveyed not only the goods then in their building, but their books, accounts, and choses in action to this trustee, who is also a defendant in this suit. The assignment was for the benefit—First, of certain persons described as creditors of the firm, enumerated in Schedule A annexed to the deed, who were to be paid in full, and whose claims aggregate $88,-714; and, second, of another set of creditors enumerated in Schedule B, whose claims aggregate $34,320, and who were to be paid after the creditors of Class A had been satisfied. The creditors upon Schedule A, and the debts acknowledged by the deed to be due them respectively, were as follows:

Henshaw & Co., - $25,844 09

Burruss, Son So Co., The Exchange Nat. Bank of Norfolk, 6,250 00 - ' 10,000 00

Ottenburg Bros., 3,796 54

Nathan Metzger, - - 700 00

A. E. Jacobs, 100 00

Isaac Gutman, ... . - 15,624 18

Isaac Moritz, 12,500 00

Henrietta Samuels, 9,400 00

L. W. Roberts, 4,500 00

$88,714 81

The property which was conveyed by the deed has been sold and proceeds collected, and has produced in cash the sum of $66,307.

No other property was conveyed by this deed, and the deed did not purport to convey any other than the goods and choses in action that have been mentioned. The deed contained no clausé for the contingent benefit of any other creditors than those enumerated in Schedules A and B. It made no provision for a large number of creditors who were not embraced in either schedule; none for the benefit of the three complainants, or the three petitioners in the suit, whose claims aggregate about $32,900, and are evidenced by negotiable notes... Fraud is not apparent on the face of the deed. It is conceded that the claims of all the creditors named in the two sehed[15]*15ules are bona fide, except of tlie four hereafter to be mentioned; and that the holders of the bona fide claims, and the trustee, T. S. Gar-nett, had no notice of the fraud affecting the four exceptional claims.

Soon after the execution of the deed, a bill was filed in this court by Edward Honshaw & Co., a beneficiary under it, against Hofheimer, Son & Co. and Garnett, trustee, on behalf of complainants and of all other creditors named in Schedules A and B, praying, among other things, that the trust should he administered under the supervision and control of this court. In that suit there were several consent decrees; among others one entered on November 26, 1883, making a distribution of a portion of funds in hand among tho creditors of Class A. But there were excepted and withheld from this distribution the sums that would have been due to Isaac Gutman, Isaac Moritz, Henrietta Samuels, and L. W. Roberts, the aggregate of whose claims acknowledged and provided for by the deed was §42,024; and whose dividends, withheld by the decree, would have been about $31,-209 in amount. To the decree of partial distribution entered in the suit brought by Henslmw & Co., just mentioned, the complainants in the present suit, by their counsel, consented.

The dividends of these four persons—Gutman, Moritz, Samuels, and Roberts^-were withheld in consequence of the filing of the bill in the present suit. This bill charges that the deed of assignment under consideration was fraudulent in respect to the debts, or pretended debts, for which it provided in favor of those four persons, and was, as to those debts, a deed to binder, delay, and defraud creditors. The suit was brought under section 2 of chapter 175 of the Code of Virginia, which authorizes creditors at large to bring suits in equity just as creditors by decree or judgment may do in other jurisdictions. The bill makes Gutman, Moritz, Samuels, and Roberts parties defendant. These persons have answered, and in their answers admitted of record that the debts were not duo to them, and waive all claim under the deed. Among tho agreed facts in this case is tho concession that the deed was, as to the four exceptional claims, fraudulent; that these four persons were parties to the fraudulent intent; and that the deed was made to hinder, delay, and defraud creditors.

None of the creditors of Hofheimer, Son & Co., mentioned in the Schedules A and B, have made assault upon the deed on tho ground of the latent fraud which it contained. They all claim under it, and none of them have repudiated it. Nor has any other creditor of this defendant firm assailed the deed, except the three complainants and the three petitioners in this suit. The fraud of the deed was detected and has been unearthed and assailed in court by them alone, so far as the proofs and pleadings in this cause speak upon the subject.

The complainants in this cause contend that, having by their vigilance, and at their own cost and risk, saved from distribution in payment of fictitious debts, the fund now in the hands of the trustee amounting, I believe, to a principal of $31,209, they are entitled to [16]*16receive this fund, which is the fruit of their labor; and that the creditors in Schedule A, whose claims were bona fide are entitled to receive no more than they would have done if the four fraudulent claims had been valid; and that the creditors in Schedule B can take, as against complainants no .other surplus than such as would have accrued to them if all the debts in Schedule A had been valid, and, as such, satisfied in full.

On the principle, id certum est quod reddi eertum potest, I consider that, as the value of the property conveyed by Hofheimer, Son & Go. is now known to be $66,307, or only about 74£ per cent, of the debts named in Schedule A alone, the deed of July, 1883, in effect and result provided that the fund arising from the property conveyed should be paid as follows, namely, (I use approximate amounts merely for illustration:)

To Henshaw & Oo.,'' ------- $10,202

Exchange Nat. Bank, 7,460

Burruss, Son, & Co., 4,766

Ottenburg Bros., - 2,S4S

N. Metzger, 55S
A. E. Jacobs, 74
I. Gutman, 11,650
I. Moritz, - 9,326
H. Samuels, 7,013
L. W. Roberts, 3,302

$00,307

5,

If the incapacity of the fund to pay off these creditors of Class A had been known when the deed was executed, the provisions as to the contingent payment of the creditors in Schedule B would Have been omitted; or, if inserted, would have been nugatory.

The deed conveyed integral amounts to a series of integer creditors. It was several by the terms of the grant. It did not provide for the contingency of some of the debts of Class A turning out per fas aut nefas to be mil.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Anderson v. Hooks
9 Ala. 704 (Supreme Court of Alabama, 1846)
Cox v. Wilder
6 F. Cas. 684 (U.S. Circuit Court for the District of Eastern Missouri, 1872)

Cite This Page — Counsel Stack

Bluebook (online)
23 F. 13, Counsel Stack Legal Research, https://law.counselstack.com/opinion/market-nat-bank-v-hofheimer-circtedva-1884.