Citation Numbers: 7 N.J. Eq. 298
Filed Date: 12/15/1848
Status: Precedential
Modified Date: 7/25/2022
By an article of agreement made by some of the creditors of the Hamburgh Manufacturing Company, among them, they covenanted and agreed with each other to unite with each other in the purchase of the property of the Hamburgh Company, then advertised to be sold at Sheriff’s sale, and also of the mine farm of the Clinton Manufacturing Company, then also advertised to be sold at Sheriff’s sale; (having recited in the said agreement that they were in danger of losing their claims against the Hamburgh Company if the Hamburgh property sold for less than f>17,000 ;) and constituted L’Hommedieu, who was one of the said agreeing creditors of the Ham-burgh Manufacturing Company, their agent and trustee to purchase the said properties for their use ; and authorized their said trustee to raise, by bond and mortgage on the property, sufficient money, &c.; and authorized and directed the said trustee to lease the said premises, and to agree with the lessee, if he desires it, to sell to him the said premises upon his securing to the said trustee the cost of the premises, including their respective claims, with interest; and to make a deed of release to him in full. The sales were made, and the Sheriff gave absolute deeds, to L’Hommedieu.
Upon the testimony in the cause, the Court of Chancery held, that it appeared that Edward W. Pratt, who had been a large stockholder in both these separate Companies, but who had taken the benefit of the insolvent law, and had, in pursuance of the provisions of that law, made an assignment of all his estate to his assignees in insolvency, was, by a side agreement between the said agreeing creditors of the Hamburgh Company and himself, to be the lessee under the said agreement, and the person to
On appeal from the decree, the Court of Errors and Appeals decided, that the Sheriff’s deeds, for both properties, to L’Hommedieu were good; but “that the facts and circumstances led irresistibly to the conclusion, that the sales were not considered by the parties as absolute and beyond redemption; but that Pratt, either for himself or the Company, had a reversionary right and in this view of the case sustained the decree for an account as to the Hamburgh Company’s property; which was a decree against L’Hommedieu, who took the deeds, and Edsall, who was one of the said agreeing creditors of the Hamburgh Company, and who had gone into possession of the property under, or in connection with, or with the consent of L’Hommedieu — he, Edsall, also holding a mortgage on a part of the property. And as to the property of the Clinton Manufacturing Company, the Court of Errors and Appeals decided, that L’Hommedieu held that in trust for the same persons for whom he held the Ham-burgh Company’s property. I might remark here, that it is manifest that the sale of the property of the Clinton Company was intended, by the said agreement among a portion of the creditors of the Hamburgh Company, to be absolute, and to divest all the ■title of the Clinton Company, and vest it in L’Hommedieu in trust for the said agreeing creditors of the Hamburgh Company. And it might be further remarked that, if the deed to L’Hommedieu for the property of the Clinton Company be valid, it is difficult to perceive how the Hamburgh Company can have any ¡reversionary interest in the property of the Clinton Company, or
As to both properties it was clear to my mind that the very object of Pratt and the agreeing creditors of the Hamburgh Company, in the arrangement they made, was that the sales of both properties should be absolute as against both Companies ; and that the Clinton property should go into the hands of L’Hommedieu to aid in paying the claims of these agreeing creditors of the Hamburgh Company, which they despaired of getting out of the Hamburgh property; and then, on Pratt’s paying the amount of those claims, he, individually, and not the Hamburgh Company, was to have both properties, free from all debts except the mortgages. This was the very arrangement which put an end to all competition and caused the sacrifice of both properties.
It was clear to my mind, that if the deeds were valid, the defendants were right in saying, that L’Hommedieu was not a trustee for the Hamburgh Company, but was a trustee for them, the said agreeing creditors of the Hamburgh Company. And, in this view, the only ground on which any other trust could be reached was by declaring the deeds void; thus reaching a resulting trust in favor of the Hamburgh Company in reference to the Hamburgh property. But a trust could not result to the Ham-burgh Company in the Clinton property by the setting aside of the deed to L’Hommedieu for that property. Whether that deed be good or bad, there can be no trust in L’Hommedieu of the Clinton property in favor of the Hamburgh Company.
If the case stood now as it did when it passed from my hands before, there would be a ground for the appointment of a Receiver arising from the constructive fraud by which the property got into the hands of L’Hommedieu. But by the view taken of the case by the Court of Errors and Appeals that ground is taken away. The deeds have been declared by that Court to be
The principal ground on which the appointment of a Receiver was pressed was, that L’Hommedieu and Edsall denied the trust. It is true they denied any trust in favor of the Hamburgh Company; and, if the deeds be valid, it is difficult, as I have before said, to perceive how there can be a trust in favor of the Hamburgh Company as to either of the properties, and much more difficult to see how there can be a trust in favor of the Hamburgh Company as to the property of the Clinton Company; but they admitted the trust created by the words of the said agreement among the said agreeing creditors.
But a denial of a trust would not, of itself, make the appointment of a Receiver necessary on the establishment of the trust. Where there is no ground for apprehension of loss by permitting the property to remain, in its appropriate use, in the occupan cy
The motion cannot prevail.
Motion denied.