Hyde v. Houston

Headnote

Fraudulent conveyances—"When not.

A purchase of land in the name of a daughter of the judgment debtor and conveyance to her, though leased by her to the debtor, were held, under the circumstances of this case, not to be in fraud of creditors.

Appeal from a judgment dismissing the complaint.

The opinion of Mr. Justice Bradley, at special term, is as follows :

The defendant Margaret S Houston is the daughter of the other defendant, and at the time the contract was made she was only a few months more than twenty-one (21) years of age. She then had no property or estate of her own, and since that time her father and his family have resided upon the premises, and the defendant Margaret has also resided there. It is alleged—and such is the contention on the part of the plaintiff—that a contract and a part of a conveyance were taken in the name of Margaret as a cover, and in fraud of the creditors of the defendant Charles Gr. Houston, who, it is alleged, has paid the purchase money, or the most of that which was paid, upon the contract, and has since the conveyance been paid upon the bond and mortgage. If that contention is supported, in the sense so charged,' the plaintiff is entitled to relief. The fact that the premises were so occupied, and that the defendant Margaret had no means in the outset, and was engaged in no service, away from home, to produce any income, while her father was receiving a salary for his services, would, without some further proof on the subject, seem to justify the inference that he was substantially the beneficiary of the purchase, and that the payments on the purchase money, and on the taxes, insurance, etc., were his, and had, by fraudulent diversion from his creditors, been put into the property, and, in relation to the title taken by the daughter, such payment constituted voluntary gifts to her, to the prejudice of her creditors. This is the theory upon which the plaintiff has proceeded.

Hpon the main proposition the question is one largely of credibility of the witnesses on the part of the defense, who were the defendants, and the wife and mother of them. The defendants, before the commencement of this action, were examined in proceedings supplementary to the execution. The facts, as are represented by their testimony on the trial of their action, are much more ample or extended than they are represented by their de

positions taken upon the supplementary proceedings to have been' there stated; and such a construction may be put upon their depositions as tends to show that they did not then recollect some things to which they testified on the trial. Their evidence, and that of Mrs. Houston, tends to prove that a person called by them “ Aunt Manda Green ” induced Margaret to purchase the property, in the first instance, by promising to help her pay for it, and that she did advance to Margaret two hundred dollars ($200) with which to make the first payment, and let her have, altogether, for that purpose, and to pay taxes, five hundred dollars ($500); that the father rented the premises of the daughter at the monthly rental of twenty-five dollars ($25), which he paid her, and it was used to make payments ; that the mother of Margaret, having received some money from the aunt’s estate, furnished some to her daughter; and that the latter was employed by her father at the weekly price of three dollars ($3) for her service in the house. All of which, the evidence of those witnesses tends to prove, were the sources of the fund with which she made, or caused to be made, payments of the purchase money, etc., of the premises. In that manner the payments by her may be substantially accounted for. The rent at twenty-five dollars ($25) from April 1, 1885, to May 1, 1893 (the' time the last payment upon the bond, eight years one month); the three dollars per week for her services -during the same time; and the moneys which the evidence tends to prove were advanced to Margaret by the aunt, Manda Green,—made an amount more than sufficient to pay all that was paid on the contract and mortgage, and for insurance, taxes, local assessments, and water rents, since Margaret took the contract, and entered into the possession of the premises. It may be assumed that Mr. Houston desired that the premises should be purchased by his daughter, and that she made the purchase (encouraged to do, as she may have been, by her aunt) with a view to a home for her parents, as well as for herself. Such inducement, for it does not necessarily characterize the transaction between herself and her father as fraudulent against his creditors, if the amount of rent he promised to pay her was not unreasonable ; and, as to that, the only evidence upon the subject is that the rental of twenty-five dollars ($25) per month was reasonable in amount. It also appears, by evidence to that effect, that Margaret was induced to remain at home, and perform services in the house for her father, by his promise of compensation for doing so. In view of the evidence the conclusion is fairly justified that the payments before mentioned upon the property were made by Margaret, or with money to which she was entitled, and that the charge of fraud as against creditors, in that respect, is not supported.

There is, however, a further fact, upon which the plaintiff seems to rely in support of the claim that money of the defendant Charles Houston went into the property. This has relation to the sum of six hundred dollars ($600) which his wife, the mother of Margaret, let her have to make certain improvements on the premises, and which were used "for that purpose. Their aunt, Manda Green, lived with them, in the house on the premises, and

was taken care of there for some time prior and up to the time of her death. She left a' will, by which she gave to Mrs. Houston a legacy of three hundred and fifty dollars ($350), a legacy to Mr. Houston of five hundred dollars ($500), and a legacy of fifty dollars ($50) to Margaret. Mr. Houston was executor of the will. Mrs. Houston made and presented a • claim against the estate of the testatrix, amounting to six hundred dollars ($600), for services in taking care of her. The claim was awarded or allowed to her by the surrogate, against the estate, and was paid by the executor to her. The money, or the amount of it, Mrs. Houston let Margaret have the benefit of, for the purpose of building an addition to the house on the premises in question, and it was so used. It is urged by the plaintiff that the money belonged to Mr. Houston, and therefore the plaintiff should, at least to that extent, have relief by the way of charge upon the premises. If there was a liability from Mrs. Green for services performed by the wife, the presumption, in an action brought by the husband to recover pay for them, would have been in support of recovery by him. Birkbeck v. Ackroyd, 74 N. Y. 356 . And an agreement of a husband to pay his wife for services performed in his household, or for him, is not effectual to support her claim for payment against him. Coleman v. Burr, 93 N Y. 17 ; Blaechinsha v. Mission & Home, 130 N. Y. 497 ; 42 St. Rep. 387 . But circumstances might have existed which would have supported the claim of Mrs. Houston for the services performed by her for Miss Green. Reynolds v. Robinson, 64 N. Y. 593 ; Burley v. Barhard, 9 St. Rep. 587 ; Stamp v. Franklin, 35 id. 828; 12 N. Y. Supp. 391 , and cases before cited. The monej"' allowed was paid to Mrs. Houston upon her claim o,f liability to her from the testatrix, at the time of the death of the latter, for services performed by the claimant for her. It will not nor cannot be assumed, in the absence of Mrs. Houston as a party to the action, that the circumstances which would entitle her to payment did not exist for its support. In an action by her or her husband to recover for the services, a different question would arise. Then to whom the liability was incurred would necessarily be the question for determination, and upon the disposition of it'would depend _the result. The asserted obligation to pay Mr. Houston for the services has been discharged by the allowance and payment to her, and, before denial of her right to the money she claimed and received on that account, she is entitled to the opportunity to be heard. It must, therefore, in the present case, be assumed that Mrs. Houston obtained the money from the estate of the testatrix upon a claim or right to it founded upon facts for its support, and that no relation, in respect to the money received from her mother by Margaret, arose between the latter and Mr. Houston. And inasmuch as it cannot, in the present case, be treated as a gift by him to her, the plaintiff can here found no claim upon its use in making improvements on her premises. The conclusion follows that the complaint should be dismissed.