[107 NJSuper Page 428] This is an action by a trustee in bankruptcy to set aside cash purchases of a series of annuity contracts made by the defendant Reverend Arthur A. Little (Rev. Little) with defendant The Equitable Life Assurance Society of the United States (Equitable). It is alleged that such purchases were made with intent to hinder, delay or defraud plaintiff, a creditor of Rev. Little, and should
be set aside to the extent necessary to satisfy the judgment plaintiff subsequently obtained against Rev. Little.
On or about March 14, 1963 Rev. Little loaned $50,000 to Office Buildings of America, Inc. He was repaid $52,500 by this corporation on May 15, 1963. On or about June 26, 1963 Office Buildings of America, Inc. and its related corporations filed petitions in bankruptcy. On September 24, 1963 plaintiff O'Neill was appointed trustee for said bankrupt corporations.
On October 3, 1963 Rev. Little entered into two annuity contracts with Equitable for which he paid a total of $50,000 in return for two lifetime annuities on which he was to receive the aggregate sum of $233.24 monthly. On October 14, 1963 he purchased a third annuity contract from Equitable for which he paid $15,000 designed to yield him $69.98 monthly.
On October 19, 1965 plaintiff's counsel wrote Rev. Little that as a creditor of Office Buildings of America, Inc. he received from it the sum of $52,500 within four months of the filing of the petition in bankruptcy. The letter further states that such payment constituted a preference and demanded a return of said sum.
In the pretrial order Rev. Little acknowledged receipt of the letter but did not stipulate the date when the same was received. It may reasonably be inferred that he received this letter in the due course of mail. Alexander v. Rekoon , 104 N.J.L. 1 (Sup. Ct. 1928). It certainly was received prior to October 27, 1965. On that date Rev. Little entered into a fourth annuity contract with Equitable for which he paid $15,000 and which was to yield him $70.82 monthly. On December 20, 1965 plaintiff instituted an action in this court against Rev. Little seeking the return of the $52,500, claiming the same to have been a preferential payment.
On October 25, 1966 Rev. Little wrote to Nathan Hilton, the agent for Equitable, who apparently sold him the annuities, in which he inquired as to the four annuities already purchased:
1. Is an annuity purchased with your company in good faith unattachable?
2. Can a judge in bankruptcy court issue an injunction? Can he take the annuities or a percentage of the money which I am now receiving from your company?
In that letter Rev. Little also stated that "The money to buy the annuities is now in question," and further asked Mr. Hilton to "please keep this matter confidential." Hilton referred Rev. Little's letter for reply to Charles W. Muller, assistant counsel for Equitable. On November 4, 1966 Muller wrote Hilton that:
There is no statutory provision in New Jersey for annuities as there is for insurance whereby payments would be exempted from the ...