Sakelos v. Hutchinson Bros.

Urner, J., delivered the opinion of the Court. The question to be decided on this appeal is mainly one of fact. It arises in an equity proceeding by a creditor to vacate what is allog’ed to be a fraudulent transfer of property by the debtor. Lpon the evidence in the record, which need not be recited, the facts we are about to state have, in our judgment, been conclusively proven.

In January, 1914, N. Sakelos and Company, a partnership engaged in conducting a restaurant in Baltimore at 306 East Baltimore street, purchased from the appellee corporation certain steam tables, ovens, kitchen utensils, and other articles, to the value of about $600, for use in a branch restaurant which the firm had acquired at 308 West Baltimore street. The negotiations for the purchase were carried on by Nicholas Sakelos, who was the head of the firm and the manager of the business at both of the places mentioned. The East Baltimore street restaurant was known as the “Olympia,” and the one operated on West Baltimore street was given the name of the “New Olympia.” In October, 1914, the West Baltimore street restaurant was taken over ³⁰² by the New Olympia Company, a corporation formed for that purpose by Nicholas Sakelos and two other persons. The New Olympia was at that time unprofitable, and the corporation which assumed the business appears from the beginning of its brief career to have been hopelessly insolvent.

A receivership for the company shortly ensued, but nothing is available for the creditors from that source. About the time of its incorporation the New Olympia Company notified the appellee that it had been formed with a view to the purchase of the restaurant business conducted at 308 West Baltimore street by'Nicholas Sakelos and Theodore Oarsotas, partners trading as Sakelos and Company. After the receipt of this notice a representative of the appellee had several interviews with Nicholas Sakelos, in which it was stated by the former that the appellee looked to the firm of N. Sakelos and Company for the payment of the claim now in suit; but a statement in writing was exacted purporting to charge the New Olympia Company also with responsibility for the debt. In reply to an inquiry from the appellee’s representative, Mr. Sakelos stated that he and Theodore Oarsotas composed the debtor firm.

Upon this information suit was brought by the appellee in the following April against Nicholas Sakelos and Theodore Oarsotas, partners trading as N. Sakelos and Company, and judgment by default for the amount claimed was recovered in due course. Shortly before that suit was instituted, the business, stock and fixtures of the East Baltimore street restaurant were transferred by N. Sakelos and Company, as a partnership, to N. Sakelos and Company, Incorporated. The latter organization was formed by the members of the pre-existing firm, who received, in lieu of their interests as partners, corresponding proportions of the corporate stock. The bank deposits of the firm were cheeked over to the incorporated company in the interval between the bringing of the appellee’s suit at law and the recovery of the judgment against the partnership.' The ered ³⁰³ itors of the firm were not given any notice of these transactions.

By way of defense to this suit in equity to have the transfers just mentioned set aside as a fund upon the rights of creditors, it is asserted that the West Baltimore street restaurant, for which the appellee furnished the articles listed in the pending claim, was owned and operated by a partnership which was entirely distinct from the one conducting the Hast Baltimore street enterprise. The testimony of the defendants is to the effect that Theodore Carsotas, who was the co-partner of Sábelos in the' West Baltimore street firm, had no interest in the East Baltimore street business, and that Costas Vlahavas and Anthony Copoulos, who were the associates of Sábelos in the firm operating the East Baltimore street restaurant, when the debt to the appellee was contracted, had no connection with the partnership which owned the other establishment. An effort was made to show that there was a difference in the names of the two partnerships, it being testified on the part of the defendants that the name of the Eastern firm was “H.