Hy-Lo Unit & Metal Products Co. v. Ryon

[39]

SPENCE, J.

—Plaintiff brought this action seeking to set aside certain transfers of personal property and certain judicial proceedings including an execution sale upon the ground that said transfers were made and that said proceedings were taken with the intent to delay and defraud plaintiff as a judgment creditor of defendant Standard Gas Company. The cause was tried by the court sitting without a jury and from a judgment in favor of plaintiff, defendants appeal.

There were three corporations involved in the transactions out of which this controversy arose, two of which corporations were named as defendants herein.

Standard Gas Valve Company, one of the defendants, was the original judgment debtor. It was a so-called family corporation in which all of the stock was owned by the Eyon family. Defendant Eppa H. Eyon was the president and a director, and his son, defendant Tracy B. Eyon, was also a director thereof.

Eemote Control Valve & Manufacturing Company, a corporation, is not a defendant in this action. It was a competitor of defendant Standard Gas Valve Company and in 1933, said corporations entered into an arrangement whereby a new corporation was to be organized and practically all of the assets of both of the existing corporations were to be transferred to the new corporation in exchange for stock of the new corporation.

Standard Eemote Control Valve Company, one of the defendants herein, was the new corporation organized pursuant to said arrangement. Defendant Eppa H. Eyon was president and a director of this corporation, and his son, defendant Tracy B. Eyon, was a director thereof.

For the sake of clarity and brevity, we will "refer to the above-mentioned corporations respectively as the debtor corporation, the second corporation and the new corporation. The arrangement between the debtor corporation and the second corporation was that both corporations would offer their assets, including tangible assets and patent rights, to the new corporation in exchange for 420 shares of its stock. This offer was not to include the bills receivable or cash of the two old corporations, but these items were comparatively small in amount. The bills payable of the two old corporations were not to be assumed by the new corporation, but