Summary
In Obermeyer Liebmann v. Jung, 51 A.D. 247, it is held that a deed, executed in consideration of an existing debt due from the grantor to the grantee, takes precedence over a judgment against the grantor, docketed after the execution but before the recording of the deed.
Summary of this case from Adirondack Hardware Co., Inc. v. WalshOpinion
May Term, 1900.
Albert G. McDonald [ Edward T. Horwill with him on the brief], for the appellant.
Frederick E. Crane, for the respondents.
This action was brought for the partition of real property. The answer denied the title of the plaintiff, and the sole question to be determined by the referee was whether the plaintiff (a corporation) was the owner of a one-quarter interest in the property, or whether it belonged to Paulina A. Jung. The referee decided in favor of the latter, and from the judgment entered appeal comes to this court.
Henry A. Jung was originally the owner of the property in question. Upon his death the property passed by will to his four children, subject to the dower right of his widow. By a provision of the will, the widow was permitted to elect whether or not to accept a portion of the value of the property, upon its sale, in lieu of dower, and this she subsequently did. By an arrangement between the parties the title became vested in the four children of Henry A. Jung. The amount of the widow's dower was fixed at $4,000, which sum was paid to her son Adolph M. Jung, who undertook to carry on the saloon business left by the father. Adolph used a considerable portion of this money, so that on the 17th day of June, 1897, he was owing his mother $1,614.61, as found by the learned referee. On the evening of that day Adolph M. Jung, by an instrument in writing duly executed, acknowledged and delivered to the defendant Paulina Jung his certain deed, conveying the undivided one-fourth part of the premises in question, in consideration of the sum of $1,200. The learned referee finds that "said deed on its face bears date the 18th day of June, 1897, the acknowledgement thereto is stated to have been taken on the 18th day of June, 1897, and said deed was duly recorded in Kings County Register's Office in Liber 9, page 42 of Conveyances, in Section 7, Block 1905, on June 18, 1897, at 35 minutes past 11 o'clock in the forenoon. That said dates of June 18, 1897, as the date of the deed and the acknowledgment thereof, were inserted in said deed through error and mistake, the deed having been executed, acknowledged and delivered on the evening of June 17th, 1897." This finding of fact is fully sustained by the evidence, and the question presented on this appeal is whether the judgment entered by the plaintiff in an action against Adolph M. Jung for $1,438.86, and docketed on the eighteenth day of June at nine-fifty A.M., under which the plaintiff afterward secured a sheriff's deed, has priority over the unrecorded deed of Paulina A. Jung. We share in the opinion of the learned referee before whom the case was tried that Adolph M. Jung had divested himself of all title to the property before the docketing of the judgment, and that Paulina A. Jung was the owner in fee of the interest which the plaintiff claims under its sheriff's deed at the time of docketing the judgment against Adolph M. Jung. The evidence showed that there was no new consideration moving from Paulina A. Jung to Adolph M. Jung at the time of the transfer; that the deed was given in payment of an existing debt. If the plaintiff had had a prior equitable lien or title, there is no doubt that the court would not permit her to retain the legal title to the injury of the plaintiff. ( Dickerson v. Tillinghast, 4 Paige, 215, 222.) But in the case at bar the evidence shows that the plaintiff had no lien whatever upon this property at the time of the delivery of the deed to Paulina A. Jung, and in the absence of fraud there is no reason why a debtor should not be at liberty to pay one creditor as well as another. This conclusion is not in conflict with that of Mr. Justice CULLEN (cited by the appellant) in Howe v. Sommers ( 22 App. Div. 417), but is in entire accord with that case, where he says: "I concur with the presiding justice that the debtor, though insolvent, had the right to prefer one creditor to other creditors; that fraud is to be proved, not presumed; and that if the facts proved are as consistent with innocence as with guilt, the evidence is insufficient to establish the fraud." In the case then under consideration the Special Term had found that the transfer of property was made for the purpose of defrauding the creditors and there was grave doubt of the existence of any indebtedness, and it was in relation to this condition of affairs that the remarks of Mr. Justice CULLEN were made, which the appellant seeks to make applicable to the case at bar.
The suggestion of the appellant, that the deed was not delivered and accepted, presents a question quite fully discussed by this court in National Bank v. Bonnell ( 46 App. Div. 302), and we are of opinion that in the case at bar there was a full compliance with the law, and that the delivery and acceptance were complete and operated to divest Adolph M. Jung of all title or interest in the property. It has been held that where a deed is delivered to a third person, and the delivery is absolute and unqualified, the grantor not reserving any future control over the deed, the estate passes — the assent of the grantee to accept the conveyance being presumed from the fact that the conveyance is beneficial to him. ( Munoz v. Wilson, 111 N.Y. 295.) In the case at bar the deed was not only delivered to Paulina A. Jung, but was by her delivered to a third person for the purpose of recording, and was duly recorded on the following morning. The title being in Paulina A. Jung at the time of the docketing of the judgment, the judgment did not become a lien upon the property in question, and the purchase by the plaintiff at sheriff's sale after the recording of Paulina A. Jung's deed did not operate to give the plaintiff any rights. The judgment appealed from should, therefore, be affirmed, with costs.
All concurred, HIRSCHBERG, J., in result.
Judgment affirmed, with costs.