R. E. Mcdonald & Co. Et Al. v. Finkovitch

SANDERSON, J. This is a bill in equity filed by creditors and an assignee of Clifford C. Fox, formerly of St. Louis, Missouri,
against M. Finkovitch, Inc., Joseph A. Finkovitch and Arthur Finkovitch, reciting that Fox was indebted to the plaintiffs
in the various amounts set forth in the bill, and was also indebted to the defendant corporation, whose controlling officers
are the individual defendants. The bill sought to set aside a conveyance made to the defendant Joseph A. Finkovitch by Fox
while insolvent on the ground that it was a conveyance in trust for the use and benefit of the plaintiffs and that the defendants
had procured such transfer by fraud, or, in the alternative, that it was a conveyance to hinder, delay and defraud creditors;
and that in either event the property be reached and applied to satisfy the plaintiffs' claims. The case was heard by a Judge of the Superior Court without a jury, who found that the conveyance was in fraud of Fox's creditors,
made with the intent to hinder, delay and defraud them; that in this fraud the defendants participated, and that the claims
of four of the plaintiffs were established in specified sums, which were less in amount than the value of property alleged
to have been fraudulently conveyed. He ordered the defendants to pay them respectively the sums found to be due. The findings
upon which this decree was based were in substance that in December, 1921, Fox wrote certain of his creditors that his assets
were approximately $4,000 in excess of his liabilities but that he was unable to meet his obligations. The defendant corporation
received one of these communications, and Joseph A. Finkovitch went to St. Louis and discussed with Fox the quickest way to
liquidate. An arrangement was made between them by which Fox would turn over to Joseph A. Finkovitch all his assets including
merchandise and bills receivable. It was agreed that the latter would settle the account of the defendant corporation and
the accounts of two other creditors, for whom he purported to be acting, and that he would then obtain an extension for six
months from all other creditors by paying them thirty per cent. on their claims, leaving Fox to pay the balance at the expiration
of the extension period. Finkovitch also agreed to give Fox a new line of credit to enable him to sell goods at low prices
so that he could make enough money to pay the other creditors the balance of their claims. Thereupon, shoes worth at least
$6,000 were packed and shipped by Finkovitch to the 'Boston Novelty Shoe Company' in Boston, a name sometimes used by the
defendant corporation in its business. The accounts receivable amounting to $6,300, some of which were uncollectible, were
then assigned to him.