Holdrege v. Gwynne

The Chancellor. Tlio injunction in this case depends on two grounds. The first is, that the property which the defendant, Margaret L. G wynne, is restrained from selling, was purchased by her husband, William H. Gwynue, now deceased, in October, 1864, in her name, when he was insolvent and largely indebted to the complainant, who was his partner, or to the partnership; and that the purchase was an actual or constructive fraud on the complainant. The fact of indebtedness, though alleged and sworn to in a very indefinite manner, is perhaps sufficiently verified for the purpose of an injunction ; and the purchase of the property by Gwynue, and that it was paid for with his own money and not that of his wife, is admitted by the answer. But these facts are not sufficient to sustain the injunction. It is a well settled principle that in such cases of alleged fraud in the purchase or disposition of property, this court will not interfere in favor of a creditor at large who has no judgment or other claim that would be a lien on the property if the title was in the debtor. Wiggins v. Armstrong, 2 Johns. C. R. 144; Edgar v. Clevenger, 1 Green’s C. R. 258; Young v. Frier, 1 Stockt. 465. If this property had been bought by Gwynne in his own name, the complainant could not now prevent his heirs or devisee from selling it free from his debt, nor could he prevent a sale by Gwynue, if living. The second ground is, that the land was bought by Gwynue, in the name of his wife, with the funds of the partnership, and therefore a trust results in favor of the partnership, and that the complainant has a lien as partner, upon the property. Admitting the principle, that if one partner purchases property with the funds or assets of the firm, either in his own name or that of his wife, it will be held by them in trust for the firm, yet to sustain the injunction, the fact that it was so purchased with the funds of the firm must positively appear by the bill and proofs; and even then, the injunction will be dissolved if the fact is denied by the answer. The answer denies that it was purchased with the [32] funds of the firm ; it is full and complete, and states fully and without evasion, that it was not so purchased ; and further, that it was paid for with the private funds of Gwynne, and states the source from which they were derived. This answer would be sufficient on this point to dissolve the injunction, were it not that the facts are not in the knowledge of the defendant. To make the denial in an answer the ground of dissolving an injunction, it must be of facts within the knowledge of the defendant. Roberts v. Anderson, 2 Johns. G. R. 202; Everly v. Rice, 3 Green’s C. R. 553; Williams v. Stevens’ Adm’r, 1 Halst. C. R. 119; Lines v. Spear, 4 Halst. C. R. 154; Morris Canal v. Jersey City, 3 Stockt. 14. As a matter of pleading the defence is full and complete. But upon examining the bill and the annexed affidavits, upon which the injunction was granted, it will be found deficient in proof on this very point. There is not any proof that Gwynne paid for this property with the funds or assets, of the firm. None is attempted, except by inference from the fact that he had no property to pay with, except the partnership assets and the patent rights. By the written agreement set forth in the bill, the patent rights did not belong to the partnership, but one half to each partner, individually. And there is nothing in the bill or proofs of the complainant to show that he might not have procured the money by the sale of his share of the patents. It is another established principle of this court in the matter of injunctions, that all the facts necessary to sustain the injunction must be verified by positive proof, or the injunction will be dissolved. Campbell v. Morrison, 7 Paige 157; Bank of Orleans v. Skinner, 9 Paige 305; Bogert v. Haight, Ibid. 297; Perkins v. Collins, 2 Green’s C. R. 482. The question, whether new matter can be set up as a ground for dissolving an injunction, does not arise here. The allegation, that the funds with which the land was paid for, were Gwynne’s own funds, and derived from the sale of his individual property, is responsive to the charge in the bill that it was bought with partnership funds. Let the injunction be dissolved.