Baker v. Naglee

Lacy, J., delivered the opinion of the court. The bill was filed by the appellant, Baker, against John Naglee, The Moromsco Land Improvement, Manufacturing and [881] Business Company; the Guarantee Safe Deposit Company, of the city of Philadelphia, O. C. Green and William C. Bichardson, trustees, to set aside a deed from Naglee to the said “The Moromsco Land Improvement, Manufacturing and Business Company,” to set aside a deed from the said Moromsco Land Improvement, Manufacturing and Business Company to the said Guarantee Safe Deposit Company, and to enjoin the said Moromsco Land Improvement, Manufacturing and Business Company from selling or in any manner disposing of $40,000 of its bonds in the markets of the world. The said injunction was awarded, but soon after dissolved, with costs, by the circuit court of Prince William county; whereupon the said Baker applied to one of the judges of this court for an appeal, which was allowed. The ground of the injunction was that Naglee was indebted to Baker in an open account, amounting to about $1,000, and, being so indebted, that the said Naglee had conveyed his farm in the county of Prince William, variously valued at from $20,000 to $40,000, and assessed at $15,483, to the said The Moromsco Land Improvement, Manufacturing and Business Company, at the nominal price of $80,000, which was paid for by the issue to Naglee of 3,600 shares of stock at $25 per share, and the said The Moromsco Land Improvement, Manufacturing and Business Company had conveyed its property in trust to secure an issue of $40,000 of its bonds, the plaintiff alleging that the object of the said Naglee was to avoid the payment of the debt to him and thus defraud him. This claim is based upon the charge that Naglee was the said Moromsco Land Improvement, Manufacturing and Business Company,and the said company was Naglee; in other words,that Naglee owned all the property of the company, and that the incorporation of the company was merely a device by Naglee to hinder, delay and defraud his creditors. If the company [882] was constituted as claimed, it is not explained how this would impair the capacity of Naglee to pay his debts. If the land was his, and he sold it for stock, and owned all the stock, his situation was as good—no better, no worse than before; and how the plaintiff wras to be injured by the act of the company and ought to be enjoined, is not plain. Naglee denies any fraudulent intent, and the purpose of forming such a company to avoid such a debt is not probable. The sale of the land fo'r the stock, which represented the value of the land,.cannot be called a voluntary conveyance without a valuable consideration. It is rather illogical to say the land was valuable, the stock was the value of the land, and yet the stock was worthless. The circuit court held the conveyance for stock was for a valuable consideration, as much as if the consideration had been money; that there was no proof of an intent to defraud; and that there was no just ground for tying up the hands of the company in the management of its business, and dissolved the injunction. This decree was plainly right, we think, and the same must be affirmed. Degree affirmed.