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KARKUS v. SIEFERT

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY


March 17, 1958

Ezra W. KARKUS, Receiver in Bankruptcy of Vreeland L. Siefert, Bankrupt, Plaintiff,
v.
Vreeland L. SIEFERT, Myrtle A. Siefert, John F. X. Greene, Sudler Construction Co., a corporation, Seymour Paskow, Wilmore Co., a corporation, Defendants

The opinion of the court was delivered by: FORMAN

This is an action brought by Ezra W. Karkus, Receiver in Bankruptcy of Vreeland L. Siefert and Myrtle A. Siefert, against them, John F. X. Greene, Sudler Construction Company, Seymour Paskow and Wilmore Company. Plaintiff has discontinued it against the Wilmore Company. The purpose of the suit is to set aside certain deeds and mortgages alleged to have been made fraudulently during insolvency. Evidence has been heard and briefs have been submitted.

It is undisputed that on April 18, 1957, involuntary petitions were filed against Vreeland L. and Myrtle A. Siefert. They were adjudicated bankrupt on May 8, 1957. Plaintiff was appointed receiver in each case May 20, 1957, and elected trustee, January 8, 1958.

 Vreeland L. Siefert was the major stockholder of the Lincoln Foundry, Inc., which was adjudicated a voluntary bankrupt on January 9, 1957.

 Together with his wife, as tenants by the entirety, they owned their residence on approximately five and one half acres of land located in Oceanport, Monmouth County, New Jersey, referred to hereinafter as the Oceanport property. Prior to December 20, 1956, it was encumbered with a first mortgage of $ 15,000, held by the Carteret Savings and Loan Association; a second mortgage of $ 9,500, held by the Rutledge Realty Co.; and a third mortgage of $ 5,000, held by the Wilmore Company. The latter two mortgages, originally for $ 24,000 and $ 7,000, respectively, were arranged by defendant Seymour Paskow, and were given as collateral security for loans to the Lincoln Foundry, Inc.

 On December 20, 1956, the Sieferts gave to defendant Paskow a mortgage in the sum of $ 8,500, on the Oceanport property, allegedly as security for prior loans made by Paskow to Siefert for the operation of the Lincoln Foundry. On January 8, 1957, the Oceanport property was conveyed by Vreeland L. and Myrtle A. Siefert, without consideration, to John F. X. Greene. It was subsequently conveyed, subject to the $ 15,000 first mortgage only, to the Sudler Construction Company, on April 23, 1957, for a $ 4,000 purchase money mortgage given to Greene, and $ 1,000, in cash, alleged to have been given by Sudler Construction Co. to Paskow. The $ 1,000 in cash is further alleged to have been returned by Paskow to Sudler Construction Company on the subsequent refusal by the Referee in Bankruptcy to approve a sale of the property.

 Defendants Vreeland L. and Myrtle A. Siefert deny any wrongdoing. Defendants Paskow, Greene, and Sudler, however, do not contest plaintiff's demand for a judgment setting aside the conveyance to Greene, the subsequent conveyance to Sudler, and the mortgage from Sudler to Greene. Defenses originally raised relative to the jurisdiction of this court over the instant case and the right of the receiver to bring this suit, were dropped at the pretrial conference.

 The sole issue now concerns the Siefert-Paskow mortgage. Plaintiff contends (1) that this mortgage is part of a larger scheme which involved the deed from Siefert to Greene, and the deed and mortgage transaction between Greene and the Sudler Construction Co., and that each transaction 'was fraudulent and made with intent to hinder and delay the creditors of the bankrupt'; and (2) 'that it (the Siefert-Paskow mortgage) also constituted a preference'. Both contentions were denied by Paskow, who, for his part, asserts that the $ 8,500 mortgage was to secure antecedent indebtedness, except for a sum of $ 525.12, which he claims to have given Vreeland L. Siefert on January 24, 1957, in reliance on the said mortgage. The evidence disclosed that Paskow began a series of money transactions with Vreeland L. Siefert and the Lincoln Foundry, Inc. in 1954. It was shown that Lincoln Foundry, Inc. drew checks to Paskow from January to November of 1956 in the following dates and amounts: Checks Issued by Lincoln Foundry, Inc. to Seymour Paskow During 1956 Date Exhibit Issued Amount No. ////-- ////-- ////--- Jan. 2 $ 250.00 51A Jan. 2 39.00 33 Feb. 3 750.00 46 Feb. 7 1,000.00 47 Feb. 9 150.00 51B Feb. 9 250.00 51C Feb. 10 750.00 48 Mar. 8 150.00 49G Mar. 9 750.00 37 Mar. 16 750.00 36 Mar. 23 150.00 49 Mar. 30 750.00 38 Apr. 6 750.00 39 Apr. 23 1,187.51 40 Apr. 26 100.00 49E May 10 100.00 49D May 16 475.00 35 May 16 525.00 34 May 18 100.00 49B May 23 100.00 49C June 8 200.00 49A June 26 200.00 49H Aug. 9 240.45 50B Sept. 6 250.00 50A Oct. 15 2,500.00 41 Oct. 15 250.00 50C Oct. 30 523.00 42 Oct. 30 150.00 50D Nov. 1 2,000.00 43 Nov. 5 200.00 50E Nov. 7 2,000.00 44 Nov. 15 2,000.00 45 Total... $ 19,589.96

19580317

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