Summary
In Shand v. Hanley (71 N.Y. 319), it appears there was testimony which tended to show that the debtor bought goods of the plaintiff with the preconceived purpose not to pay for them; that the transfer of the real estate was made with the purpose of screening it from the debt thus created, and the deed was a part of the same plan, and all the parties were conspiring to carry out the same fraudulent purpose.
Summary of this case from Carr v. BreeseOpinion
Submitted November 16, 1877
Decided November 27, 1877
Benj. F. Carpenter, for appellants.
S.W. Fullerton, for respondent.
The plaintiff is a judgment-creditor of the defendant, William Hanley. This suit is brought by the plaintiff as such creditor, to set aside a deed of real estate made by that defendant to the defendant, Francis Hanley, and a deed of the same premises made by Francis to the defendant, Catharine Hanley. The ground of the suit is, that those deeds were made by the parties to them, with the intent to defraud the plaintiff of the debt to him for which his judgment was recovered. The Special Term found the fact so to be. It is true, that the debt was created after the execution of the deed to Francis Hanley. The plaintiff was not an existing creditor of William Hanley then. William Hanley had, however, obtained credit on the strength of his ownership of the premises. He continued in possession of them, and in seeming ownership, and kept up his credit thereby. In such case a transfer of real estate may be made with an intent to defraud one who has after that become a creditor, as well as one who before that has become a creditor; and the fact of fraudulent intent appearing, the deed will be declared void against the subsequent creditor. ( Savage v. Murphy, 34 N.Y., 508; Case v. Phelps, 39 N.Y., 164.) The cases cited are not analogous in all their facts, but they maintain the principle above stated. There is no difference in result, as there is no difference in the intention to produce the result, between a transfer of property to defraud a creditor existing at the time, and a creditor thereafter to be made. And in answer to the first point of the appellants, let it be said here, that the complaint in this suit puts the cause of action upon the ground above stated. It does, indeed, in general terms, aver an existing indebtedness to the plaintiff and others, and that it did in fact exist at the time of the execution of the deed to Catharine Hanley. But the explicit and detailed averments of the complaint are of continued possession, and continued credit by reason thereof, and the incurring of indebtedness to the plaintiff after the deed to Francis Hanley.
If, then, there is evidence in the case to sustain the finding above mentioned, the judgment, so far as the question above stated is concerned, must be affirmed. The motion to dismiss the complaint, and certain of the requests for findings of fact, which were refused, properly raise that point. We have attentively considered the testimony. There was in it that which tended to show that William Hanley and his partner bought chattels of the plaintiff with the preconceived purpose not to pay for them. There was also in it that which tended to show that William Hanley made the transfer of the real estate to his brother, with the purpose of screening it from the debt thus created; and that the deed from the brother to the wife of William, was a part of the same plan; that both deeds were upon no real and honest consideration; and that all the parties to them were conspiring to carry out the fraudulent purpose. It is not necessary to go into the details of the testimony.
It makes no difference on appeal to this court, in a case passing through the General Term as this did, that there was also testimony which, if believed and relied upon, would have showed the contrary of all that. It was for the Special Term to pass upon the credibility of witnesses, and it could rely upon which it put faith in when there was conflict in their testimony. Nor was it needful that there should be direct testimony of fraudulent knowledge and intent in the parties to the conveyances. The Special Term, from facts shown, could infer the existence thereof. These elementary propositions are stated to meet somewhat that is said in the first and second points of the appellants. And what has been said, also meets, in part, the fourth point of the appellants. The Special Term has found that the conveyances were without consideration, or if the first was upon a consideration, it was taken only as a security for a debt which was paid before the last was given, which last was made with the intent of the defendants above named, all of them, to cheat and defraud the plaintiff and other creditors.
It is claimed in the fifth point of the appellants, that the attacking creditors, even if successful in fixing a lien upon the premises, should not have the benefit of a new building erected thereon. This is based upon the assertion that the defendant, Catharine, placed the new building there. There is no finding of fact that she did. That finding was requested but refused. There was testimony that she put up the building. That testimony was from the defendant, William Hanley. If it was to be believed, there was proof which required the Special Term to make the finding asked for. But, as before said, it was for the Special Term to pass upon credibility of the witnesses. It is quite plain that it did not believe William Hanley. Hence, we cannot treat it as a fact in the case that his wife made the improvements upon the premises, nor can we say that there was error in refusing the finding requested. Besides, she took her deed, and if she made the improvements made them, after the filing of the lis pendens in the action upon the debt of the plaintiff against William Hanley and his partner, wherein an attachment was issued on the ground that this real estate had been assigned with fraudulent intent. This was constructive notice to her of the insecurity of her title, and of the equitable lien of the plaintiff, and apprised her of the imprudence of making any outlay upon the premises. She may not now absorb the value of the premises, over and above the amount of the mortgage which is recognized by the judgment appealed from. Her inchoate right of dower is preserved, which seems to be the only interest which she has in the premises. In this connection it is claimed that the judgment was erroneous in directing the appointment of a receiver, and that the defendants, William Hanley and wife, convey to him all their title and interest in the premises, save that she is not required to release her inchoate right of dower therein, and that the receiver sell the premises. As this suit was begun in behalf of the plaintiff as judgment-creditor and of all other judgment-creditors who would come in, it was not an improper judgment, on arriving at the conclusion that the conveyances of the land were void, to adjudge the appointment of a receiver to take a conveyance and to sell. It is true that a sale by a receiver in such case will not give a title good against valid liens existing prior to the filing of the complaint. ( Chautauque County Bank v. Risley, 19 N.Y., 369.) But where the holder of a lien, or claimant of other interest in the premises, is made a party to the suit, and the validity of his lien or claim is made a question therein, and is adversely disposed of by the judgment, a sale and conveyance by the receiver will vest in his grantee a title superior to that lien or claim ( Ibid). We see no reason, then, in the claim of the defendant, Catharine, to be allowed for the improvements put upon the premises, why the judgment is erroneous or ill-advised, in directing the appointment of a receiver to sell and convey.
The judgment appealed from should be affirmed.
All concur.
Judgment affirmed.