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Palestroni v. Jacobs

Decided: March 11, 1952.

ALFIERO PALESTRONI, PLAINTIFF-APPELLANT,
v.
SAMUEL JACOBS, HARRIET KALISHER JACOBS, GERALD MARTELL, NATHAN BAKER AND SYLVIA BAKER, DEFENDANTS-RESPONDENTS



McGeehan, Jayne, and Wm. J. Brennan, Jr.

Per Curiam

[18 NJSuper Page 439] The complaint in the present action assails a deed of conveyance dated December 27, 1950, whereby Samuel Jacobs and Harriet Kalisher Jacobs granted to

Nathan Baker and Sylvia Baker three lots of land with the residence situate thereon in the City of Englewood, Bergen County, as one fraudulently conceived and consummated to hinder, delay or defraud the creditors of Harriet Kalisher Jacobs. R.S. 25:2-3.

The parties at the pretrial conference agreed "to limit the trial of this action to the following issues: 1. Whether Mrs. Jacobs was insolvent at the time of the conveyance to the Bakers. 2. Whether the deed to the Bakers was in fraud of creditors of Mrs. H. K. Jacobs."

R.S. 25:2-5 provides that "Nothing contained in this article shall be construed to impeach, defeat or make void any conveyance * * * or sale of any real estate * * * made for a good consideration and bona fide , to any person not having, at the time of such conveyance, assurance or sale, any notice or knowledge of the covin, fraud or collusion * * *." Tantum v. Green , 21 N.J. Eq. 364 (E. & A. 1869); American Surety Co. v. Conway , 88 N.J. Eq. 370, 373 (E. & A. 1917); Journal Square Nat. Bank v. Hetherington , 116 N.J. Eq. 596 (E. & A. 1934); Equitable Life Assurance Society v. Patzowsky , 131 N.J. Eq. 49 (E. & A. 1942).

Notice, however, may arise from the purchaser's knowledge of circumstances which should have put him on inquiry. Tantum v. Green, supra; De Witt v. Van Sickle , 29 N.J. Eq. 209, 215 (Ch. 1878); Dougherty v. Connolly , 61 N.J. Eq. 421, 428 (Ch. 1901); Horton v. Bamford , 79 N.J. Eq. 356, 375 (Ch. 1911).

The burden of proving fraud in a case of this nature rested upon the plaintiff. Fraud will not be presumed, and circumstances that merely arouse suspicions will not support an inference of fraud. Wolosin v. Iavarone , 112 N.J. Eq. 409 (E. & A. 1933); Security Acceptance Corp. v. Donegani , 113 N.J. Eq. 281 (E. & A. 1933); Hersh v. Levinson Bros., Inc. , 117 N.J. Eq. 131 (E. & A. 1934); Brand v. Quinn , 121 N.J. Eq. 260 (Ch. 1936); Epstein v. Bendersky , 132 N.J. Eq. 30 (E. & A. 1942).

It was incumbent upon the plaintiff to disclose that the conveyance rendered the grantor-debtor insolvent within our acceptation of that term. Conway v. Raphel , 102 N.J. Eq. 531 (E. & A. 1928); Trust Company of Orange v. Garfinkel , 107 N.J. Eq. 20 (E. & A. 1930); Camden Securities Co. v. Nurock , 112 N.J. Eq. 92 (Ch. 1932), affirmed 114 N.J. Eq. 18 (E. & A. 1933); Dunham v. Cades , 115 N.J. Eq. 290 (E. & A. 1934); Superior Finance Corp. v. Santucci , 115 N.J. Eq. 504 (Ch. 1934); Franklin National Bank v. Freile , 116 N.J. Eq. 278 (Ch. 1934), affirmed 117 N.J. Eq. 405 (E. & A. 1935).

It was also imperative to reveal that at the time of the conveyance, the grantor was insolvent or was thereby rendered insolvent. Dammers v. Croft , 111 N.J. Eq. 462 (E. & A. 1932). It will not suffice to disclose that at some subsequent time the grantor was or became insolvent. Cf. Carluccio v. Winter , 108 N.J. Eq. 174 (E. & A. 1931).

The trial judge resolved that the evidence introduced on behalf of the plaintiff was too meager and insufficient adequately to establish the essential elements of the alleged cause of action, and a judgment dismissing the plaintiff's action and also the counterclaim of the defendant Samuel Jacobs was entered. The plaintiff appeals from the dismissal of his action against the defendants.

The inadequacy of the plaintiff's proof is noticeable. With the exception of the plaintiff's brief testimony and that of his real estate expert concerning the estimated market value of the property, the only testimony is that of the defendants who were called and examined by plaintiff's counsel.

We observe that the point primarily emphasized by counsel for the plaintiff-appellant is that "the trial court unduly restricted the presentation of the plaintiff's case." We fail to detect in the record any ruling of the trial judge which ignored or contravened the objection of counsel for the plaintiff, and we therefore assume that his ...


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