Ellis v. Myers — 28 N.Y. St. Rep. 120

Majority

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George A. Ellis, Resp’t, v. Reuben J. Myers, as Assignee of Oliver Cady et al., Oliver Cady and John E. Cady, App’lts.

(Supreme Court, General Term, Fourth Department,

Filed December 7, 1889.)

Headnote

1. Deeds—Consideration—Husband and wife—Limitation.

A few days prior to making an assignment, one of the assignors made and delivered a deed of real estate to his wife. In an action to set aside the assignment she testified as witness for plaintiff that on settlement of the estates of her father and uncle in 1844 and 1864, she received notes given by. her husband for loans; that she gave them to him and he promised to pay her when he could, and that the deed was given in payment thei efor. Held, that such indebtedness formed a good consideration for the deed, although their marriage took place prior to the act of 1848; that the statute of limitations was waived by the conveyance and not available to plaintiff.

2. Assignment fob creditors—Omission of assets.

A mere omission from the schedule of a claim in favor of the assignor is not sufficient to warrant a finding that the assignment is fraudulent. The indebtedness, if valid, passes under the assignment even if omitted.

Appeal from a judgment entered in Tompkins county upon a decision made at special term held in that county. It was found as a matter of fact by the trial court that upon the 19th day of January, 1888, Oliver Oady and John E. Cady executed and delivered to Reuben J. Myers a general assignment, “ both as individuals and co-partners, which assignment was in due form of law, and was duly accepted by said Myers as assignee, and he duly executed and filed his bond as such assignee and entered upon the discharge of his duties.” That on the 6th of February, 1888, an inventory and schedules were filed in the clerk’s office, showing the liabilities to be the sum of $31,210.99, and the actual worth of their assets $12,105.55. On the 23rd day of February, 1888, the plaintiff recovered a judgment against Cadys for $5,291.67, “ the same being upon an indebtedness which accrued some three years prior to the said judgment. An execution was

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duly issued thereupon to the sheriff of the county of Tompkins, in which county the said defendants then lived, which execution was thereafter, and before the commencement of this action, duly returned wholly unsatisfied.”

The trial court further found, viz: “ That the aforesaid general assignment for the benefit of creditors, made by the said Oliver Cady and John E. Oady to the defendant Myers, was fraudulently made with the intent on the part of the said assignors to hinder, delay and defraud their creditors and this plaintiff.” Also : “ That by reason of said assignment, the creditors of the said assignors, and this plaintiff, have been hindered, delayed and defrauded in the collection of their debts.” Also: “ That the defendant, Myers, did not participate in and had no knowledge of the fraudulent intent of the assignors. ”

As matter of law, it was found: “That the said general assignment made by the defendants, Cadys, to the defendant, Myers, in void as to this plaintiff.”

Rick & Dutton and S. M Payne, for app’lts; Almy & Bouton,, for resp’t

On the 11th day of January, 1888, Oliver Cady executed a conveyance of 120 acres of land to his wife Cornelia Cady ostensibly in payment and discharge of an indebtedness of his to her which arose during their married life. All the facts and circumstances relating to that indebtedness were disclosed by evidence. The trial judge was requested to find as follows: “ That on the 11th day of January, 1888, the said Oliver Cady conveyed to said Cornelia Cady one hundred and twenty acres of land by deed, which said deed contains a full description of said lands, and the sale was recorded in Tompkins county clerk’s office, January 20, 1888. That said conveyance was in payment of and in full satisfaction of said indebtedness then due and owing from said Oliver Cady to said Cornelia Cady, and the said land was of the value of $-.” He refused to make the finding. We are called upon to inquire whether that proposed finding accords with the evidence.

In the memorandum which the trial judge delivered accompanying his decision of the case, he remarked: “I think, from the evidence, that over forty years ago Oliver Cady obtained from his wife the sum of money claimed. I think, furthermore, that he obtained from his wife the sum of money claimed at the death of Mr. Goddard. These moneys were used for their joint benefit, without an intention, and without a promise by Oliver Oady to his wife to repay them. * * * During the whole forty years no recognition of that as a debt was ever made until within a month or two of the assignment. All these circumstances lead me to the conclusion that there never was a promise, express or implied, by Oliver Cady to repay those sums to his wife, and that, at the time of the assignment, there was no indebtedness, legal or equitable, from him to her.”

Mrs. Cornelia Cady was placed upon the stand as a witness by

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the plaintiff. He thus vouched for her credibility and «reliability as a witness. From her testimony we leam that she was a daughter of John Phillips, who died when she was about six years of age, and that her uncle, Schuyler Goddard, was appointed her guardian after the death of her father, and that the guardian made several loans of money belonging to the estate of her father to Oliver Cady and received his notes therefor. By a release, which was produced in evidence, executed by Oliver Cady and Cornelia Cady, bearing date the 24th day of May, 1845, it appears that there was a settlement between Schuyler Goddard, as such guardian, and a recital therein that Cornelia and Oliver had “ received from said Schuyler Goddard $842.42, in full of all demands against him “ as such guardian; ” that receipt was corroborated by the testimony of Mrs. Cady and of her husband, Oliver Cady; and there is no evidence in the appeal book to the contrary on the subject of the amount of moneys that came from the estate of Mrs. Cady’s father. The fact should therefore be regarded as satisfactorily established. It also appears that Mrs. Cady became entitled to certain moneys from the estate of Schuyler Goddard after his death, and that Augustus Phillips, brother of Mrs. Cady, was appointed executor, and that she had a settlement with the brother in reference to the estate of her uncle, Schuyler Goddard; and that the executor turned out to her a note of $600, which he had taken from Oliver Cady in settlement of Mrs. Cady’s interest in Schuyler Goddard’s estate; the note was produced upon the trial. It bears date February 29, 1864, and is for $600 and interest, and was executed by Oliver Cady and John Cady, and there had been endorsed thereon $42, in payment of interest, March 6, 1865.

Mrs. Cady testifies that her husband said to her he would pay this money and the interest upon it to her. The origin and existence of the indebtedness of $600, is also stated in the testimony of Oliver Cady, and that Mrs. Cady had not been paid at the time ■of the execution of the deed in question, on the 11th of January, 1888, either the money which her husband had received from her father’s estate, or the indebtedness which accrued as has just been stated. Mrs. Cady testifies that she turned over the notes which came to her from her guardian, Goddard, to her husband ; and she says, viz.: “ At that time he told me he would pay me the money back, and the interest on it. That was in Í844. He said that when he got the money.” She testified, in speaking of the $600 received from the Goddard estate, viz.: “ My husband said that he would pay this money to me and the interest when he could; he told me last November or December that he would give me a deed to pay me for what he owed me.” Mrs. Cady is not a party to the action, and after making due allowance for her relation to the defendants, after weighing her testimony in connection with the papers produced, and the evidence of her husband, so far as it corroborates her testimony, we are led to the conclusion that at the time her husband received the several sums of money there was an agreement that he should return the same with interest to her; and we are of the opinion that the indebtedness formed a consideration for the conveyance which she received

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from her husband. It was competent for him to pay that indebtedness ; it was lawful for her to receive the payment thereof by the conveyance in question. Grafel v. Hodges, 17 N. Y. State Rep., 87.

In Jewett v. Noteware, 17 Weekly Dig., 438, it appeared that a debt, eighteen years after its origin, was secured by a mortgage together with the interest on the indebtedness; that indebtedness was due to a wife for money borrowed, and the intent of the husband in executing the mortgage “ was to secure his wife in any event,” and it was held, viz.; “ that as the debt was bona fide, the judgment creditor could not attack the mortgage.”

Although the marriage between Mrs. Cady and her husband took place prior to the act of 1848, for the protection of the property of married women, his promise to her made to reimburse her the money which he borrowed from her furnishes the foundation in equity for upholding a conveyance made for that purpose. He had a right to decline to assert absolutely his marital rights to the personal property of his wife, and to borrow the money of her with the understanding and agreement that it should be repaid.

In Jaycox v. Caldwell, 51 N. Y., 395 , it was held in the case involving a similar question, that “ the agreement is for a good consideration, and imposes an equitable obligation upon the husband ; and a preference of the debt in good faith and without an intent to defraud, in an assignment for the benefit of creditors, is legal and does not vitiate the assignment." And it was further said in that case that there is no distinction between cases where the property at the time of marriage consisted of money in the possession of the wife and those where it consisted in choses in action. The doctrine laid down in Jaycox v. Caldwell, 51 N. Y., 395 , was reaffirmed by the court of appeals in Syracuse Chilled Plow Co. v. Wing, 85 N. Y., 426 .

We think it is quite apparent from the evidence that Mrs. Cady expected to receive a return of the money which she allowed to pass into the hands of her husband, with interest thereon, and that he promised from time to time after receiving the money to make good the same to her, and that he had never done so prior to the conveyance of the 120 acres. We think these remarks appropriately apply to the money which came from her father’s estate as well as the money which came from her uncle’s estate. We, therefore, differ with the learned trial judge and cannot accede to the comments made upon that transaction in his memorandum.

While the plaintiff was at liberty to contradict the evidence given by Mrs. Cady, and to prove the facts other than as stated by her, yet we think that such contradiction and proof are not furnished.

We are of the opinion that the trial judge should have found in accordance with the request made in regard to the indebtedness to Mrs. Cady, at the time of the execution of the deed of 120 acres, and that the conveyance was made for the purpose of paying to her a valid indebtedness.

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It does not aid the respondent’s case if it be conceded that she had no demand in January, 1888, which in law she could have enforced as against the statute of limitations; the plaintiff is not in a situation to insist upon the statute of limitations against that indebtedness. That defense is personal to the debtor and manifestly was waived when the settlement and payment of the indebtedness took place by means of the conveyance. See Jaycox v. Caldwell, supra.

If the trial judge had found in accordance with the views which we have expressed upon the subject we have been considering, it is inferable that his general finding that the assignment in question was fraudulent in fact might have been otherwise. We therefore think there should be a new trial.

(2) We think the criticism that the schedule of assets did not contain a claim of $1,000 in favor of Oliver Cady against one of his daughters is not sufficient to warrant a finding that the assignment was fraudulent in fact. After an inspection of the evidence we are inclined to think there is some doubt as to the validity of any such supposed indebtedness. However, if it be a valid claim, the schedule may be amended and the assignee may bring an action to recover the indebtedness; if there was one existing, it would pass under the, assignment to the assignee even if omitted from the schedule. Warner v. Jaffray, 96 N.Y., 253 ; chap. 466, Laws 1887.

We see nothing in the circumstances attending the omission of the alleged indebtedness of the daughter to Cady from the schedule made after the assignment, which clearly or satisfactorily establishes an intent on the part of the assignors in the execution of the assignment to commit a fraud upon their creditors. Clark v. Taylor, 37 Hun, 314 .

There is no collusion shown on the part of the assignee in respect to that supposed indebtedness or the withholding of the same from the schedules. If any remedy is needed in respect to that indebtedness, it may be sought by the assignee in proceedings to have the schedule and inventory amended, or by bringing an action to recover the amount of the indebtedness. Miller v. Halsey, 4 Abb., N. S., 28; Wilson v. Forsyth, 24 Barb., 105 ; American Exchange Bank v. Webb, 15 How. Pr., 193 ; Carpenter v. Muren, 42 Barb., 300 .

Judgment reversed on the exceptions and a new trial ordered, with costs to abide the event.

Martin, J., concurs; Merwin, J., concurs in the result.