Bennett v. Paulson

SPENCE, J.

This suit to set aside an alleged fraudulent transfer and for other relief was originally brought by Norman H. Bennett as a judgment creditor of defendant George P. Paulson. Thereafter said defendant was adjudicated a bankrupt and said Norman H. Bennett was appointed trustee. By order of the trial court Norman H. Bennett, as trustee of the estate of George P. Paulson, bankrupt, was substituted as party plaintiff herein. The cause was tried by the court sitting without a jury and resulted in a judgment denying plaintiff any relief. Plaintiff appeals from said judgment.

Defendants George P. Paulson and Peter Boudoures were partners doing business under the firm name of “Maison-Pjral Grill”. During the pendency of an action in which Norman H. Bennett was plaintiff and said George P. Paulson was defendant, said George P. Paulson recorded notice of his intention to sell all of his interest in and to said partnership to his said partner Peter Boudoures. At the time and place specified in said notice the partners executed an agreement, whereby the partnership was dissolved and defendant Paulson assigned all of his right, title and interest in and to said partnership and all of its assets to defendant Boudoures. In consideration of such transfer, defendant Boudoures agreed to assume all of the outstanding partnership obligations and to release defendant Paulson from all claims. After said Norman H. Bennett had obtained judgment against said George P. Paulson individually in the action then pending and after execution had been returned wholly unsatisfied and resort had been had to supplementary proceedings, said Norman H. Bennett commenced this suit. In the complaint herein, plaintiff alleged that said transfer was made without any consideration and was made with the intent on the part of defendants to hinder, delay and defraud plaintiff as a judgment creditor of defendant George P. Paulson. Plaintiff prayed that the transfer be set aside' as fraudulent, that a

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receiver be appointed for the purpose of an accounting and that an order be made charging the interest of defendant George P. Paulson in said partnership with the payment of the judgment in the action above mentioned.

The trial court made full and complete findings and found against plaintiff on many of the material allegations of the complaint. The trial court found among other things that the transfer by defendant Paulson to defendant Boudoures of the partnership assets was not made with the intent to hinder, delay or defraud any creditor of either of them; that said copartnership had not been earning any profits for some time prior to the transfer and that at the time of said transfer the liabilities of the copartnership exceeded its assets; that said transfer was made in good faith and for a good and valuable consideration; that by reason of the fact that the assets of said copartnership were insufficient to pay its liabilities there would have been no assets remaining for the individual use or benefit of either of said partners in the event that the copartnership affairs had been wound up at the time of the transfer.