Isaacson v. Union Trust Co.

SHENK, J.

This action was brought by the plaintiff as trustee in bankruptcy of the estate of J. C. "Rice, a bankrupt, to have it adjudged that certain property described in the complaint belongs to the plaintiff as trustee for the creditors of the bankrupt, and an accounting. The court found in favor of the plaintiff and enjoined the defendants from asserting any claim or interest in any of the property in controversy. The defendants J. C. Rice Company and M. T. Wolf are the appealing defendants.

The court found that certain property, title to which stood in the name of J. C. Rice Company, was the property of the bankrupt and that the title to 247 shares of stock in the J. C. Rice Company, although standing in the name of the defendant Wolf, was the property of the bankrupt, and that Wolf held title to the same in trust for the plaintiff. These findings are attacked as unsupported by the evidence. The evidence shows that J. C. Rice was engaged in numerous promotional enterprises in real estate and other property; that he did business through the medium of corporations which he organized, owned and controlled, among which was the J. C.-Rice Company. The court found that the J. C. Rice Company was merely the

alter ego

of J. C. Riee and the evidence is amply sufficient to support that finding. The evidence also disclosed that on November 21, 1918, and at a time when Rice was insolvent, he was the owner of all of the stock of the J. C. Rice Company consisting of 250' shares, excepting three thereof issped to qualify directors; that his creditors were numerous and insistent upon payment; that on November 21, 1918, he pledged to the defendant Wolf 247 shares of said stock as security for the payment of a promissory note executed by Rice to Wolf in the sum of $21,458.79, due five years after date, with interest at seven per cent per annum payable at maturity; that the amount of the note represented an antecedent indebtedness from Rice to Wolf, with interest accrued over a considerable period of time; that in addition

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to 247 shares of stock the bankrupt pledged to Wolf other property and securities constituting in the main the entire assets of Eice which were estimated to be of the value of $75,000; that under pledgee’s sale, which took place on the ninth day of September, 1919, Wolf sold the 247 shares of stock and took the title in his own name. The court found that the pledge of the stock was a