Opinion
December Term, 1860
Thomas C. Welch, for the appellant.
Thomas C. Reyburn, for the respondent.
The case of Garfield v. Hatmaker ( 15 N.Y., 475) decides that there was no estate in Curtis Mann upon which the plaintiff's judgment could attach as a lien. The plaintiff was not, therefore, entitled to relief in this action upon the footing of a suit to remove an impediment to the remedy at law. But the case cited decides that, under the 52d section of the statute relative to uses and trusts (1 R.S., 728), a trust resulted to the then existing creditors of the party advancing the purchase money (in this case of Mann), to the extent to which it might be necessary to satisfy their demands. The statute declares, in terms, that every such conveyance as that which was made to Mrs. Mann in the present case "shall be presumed fraudulent as against the creditors at the time of the person paying the consideration; and that where a fraudulent intent is not disproved, a trust shall result in favor of such creditors to the extent that may be necessary to satisfy their just demands." Then the next section contains a saving in favor of purchasers for a valuable consideration without notice of the trust. (§ 54.)
The plaintiff's case is not the worse on account of the fact found by the judge, that Mann paid the purchase money and caused the conveyance to be taken to his wife, with intent to defraud his creditors. Such would be the judgment of law upon the transaction without any extrinsic evidence of a fraudulent intent. The only effect of this part of the finding is to preclude the idea of an advancement to the wife. A case may be supposed where the indebtedness of the party advancing the consideration was so small in proportion to his property as to negative the allegation of a fraudulent intent. But no such feature was presented in the present instance, for it is found as a fact that Mann was largely indebted and insolvent at the "time of recovery of the judgment which the plaintiff owns, and ever since."
The case then is precisely within the statute, and the plaintiff is entitled to subject the land to the payment of the debt, unless the Hollister Bank, which the defendant represents, stands in the position of a bona fide purchaser within the meaning of the 54th section. We are of opinion that such is not the case. It is found that the bank had no notice or knowledge of the judgment against Mann; but it is not stated that its officers were not aware that the premises were purchased with the money of Mann, or that they were ignorant of his indebtedness and his insolvent condition. If, therefore, the decision depended upon the question whether the defendant had notice of the trust, the case would not be free from embarrassment. But the mortgage was taken as collateral security for an antecedent debt, nothing being advanced at the time and no security given up. It is not found that there was any definite contract for extending the credit on the demands which the bank held against Mann; but for anything which appears these demands might have been prosecuted immediately notwithstanding the execution of the mortgage. Where a conveyance is made or a security taken the consideration of which was an antecedent debt, the grantee or party taking the security is not looked upon as a bona fide purchaser. The expression in the statute is borrowed from the language of courts of equity, and must be interpreted in the sense in which it is there understood; and it is well settled that a grantee or incumbrancer, who does not advance anything at the time, takes the interest conveyed, subject to any prior equity attaching to the subject. ( In the matter of Howe, 1 Paige, 125; Arnold v. Patrick, 6 id., 310; 3 Barb. S.C.R., 267.)
We think the complaint was well enough adapted to the case made by the evidence and to the facts found, and that the relief granted by the Supreme Court was appropriate to such a case. The judgment must, therefore, be affirmed.
All the judges concurring,
Judgment affirmed.