Appeal, No. 264, Jan. T., 1953, from decree of Court of Common Pleas No. 7 of the Philadelphia County, June T., 1952, No. 3893, in case of Jack Berger, Trustee, Estate of Samuel Kraisman, v. Bernard Kraisman. Decree affirmed.
Reuben Singer, with him John R. Meade and Meade & Singer, for appellant.
Albert S. Fein, with him Benjamin H. Levintow, for appellee.
Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.
OPINION BY MR. JUSTICE MUSMANNO
Samuel Kraisman, feeling the flood waters of insolvency rising about him, looked for a financial craft which would carry him to the solid ground of a new business where he could begin life afresh in some new and profitable enterprise, unencumbered by past mistake or misfortune. With two others (Albert Merkin and Nathan Korff) he organized a corporation which issued three certificates of stock of 50 shares each, one going to Merkin, another to Korff and the third to his (Samuel Kraisman's) daughter Dorothy Meil.
Upon receiving her certificate Mrs. Meil immediately executed a power of attorney to her father. Still later she transferred, without consideration, the stock to her brother Bernard Kraisman. One year later Nathan Korff transferred his 50 shares to the same Bernard Kraisman. Within the next year Bernard, who was only 21 years of age, acquired the remaining 50 shares of stock and he thus became the sole owner of the Colonial Furniture Company. His father Samuel Kraisman became the president of this organization.
Feeling that he had built himself a firm fortification of immunity from the attack of his creditors, Samuel Kraisman now went into voluntary bankruptcy. In his application he did not list as assets any of the Colonial Furniture stock. While society and the law laud the resolution of any one who has failed in business to build anew, such resolution cannot be founded on the unpaid debts of legitimate creditors. One cannot rob Peter to set up business with Paul. A study of the record in this case reveals a crafty, even if awkwardly executed, design on the part of Samuel Kraisman to bury all his financial difficulties in the pit over which was built the structure of the Colonial Furniture Co. The stock issued to Dorothy Meil was not paid for by her, so that she in truth was not vested
with a title that she could transfer to her brother who, in his turn, paid nothing for it. The stock transferred by Nathan Korff to Bernard Kraisman was paid for by the Colonial Furniture Company so that Bernard had no legitimate title to this stock either.
It is obvious that in these transactions Dorothy and Bernard were figures of straw being moved by and in the interests of their father. At the time of the incorporation of the Colonial Furniture, Bernard was only 19 years of age and, therefore, could not be utilized as a business confederate. However, only 6 days after he attained his majority, the transfer of the stock from his sister was effected. This highly suspicious circumstance and others induced the trustee in bankruptcy to question all of Samuel Kraisman's dealings with the Colonial Furniture Company and he filed a bill in equity, charging Kraisman with illegally ...