Kain v. Larkin

On the first day of May, 1889, when 'Patrick Larkin delivered to his daughter, Maria E. Larkin, a deed of' his house and lot in Kingston, N. Y., an action was pending against him, brought by Margaret Kain, as administratrix of David Kain, deceased, to recover damages for his wrongful act, by which the death of the deceased was caused, in which judgment was recovered on the 16th day of October, 1890, in favor of the plaintiff for $987.34 damages and $530.94 costs. Although the plaintiff’s claim was founded on a tort, and its amount was undetermined at the time of the conveyance in question, Patrick Larkin could not defeat its collection by a fraudulent disposition of his real estate. A deed executed to defraud one having a claim arising out of the commission of a wrongful act has no greater, validity than one made to prevent the collection of a liability arising on a contract. Martin v. Walker, 12 Hun, 46 ; Jackson v. Myers, 18 Johns. 425 ; Ford v. Johnston, 7 Hun, 563 ; Baker v. Gilman, 52 Barb. 26 . The plaintiff, therefore, at the time mentioned had a just claim' against Patrick Larkin, the amount of which was undetermined,' but was afterwards found to be $987.34, besides costs of the action^ which had then accrued. Before the execution of the deed from¡ Patrick Larkin to his daughter, the former therefore had real estate worth $3,000, out of which plaintiff’s demand could have-been collected. The necessary effect of the conveyance was to>prevent the collection of any judgment the plaintiff might thereafter recover, as Patrick Larkin, besides the house and lot, had no' other property except six or eight hundred dollars in money,' which was insufficient to pay the plaintiff’s demand, and which, was- afterwards expended by him in the payment of debts anefc living expenses. We are called upon to determine whether, as: against the plaintiff thus standing in the position of a creditor, the, finding of the trial court that the deed in question was made by Patrick Larkin and received by Maria E. Larkin, in good faith„ and without any intent to defraud creditors or other persons, can be sustained.

“ I came home on the condition that I should come home and ¡he [her father] would recompense me for it, * * * That I should remain at home, and take care of her and him, and the place would be mine after a while; and I did so. * * * He gave me the deed, and told me torput it away; it was mine, and I should take care of it. He said, ‘All I want is my support, and to be cared for during the rest of my life.’ I promised to take care of him during the rest of his life, and that is part of the consideration of this deed to me. * * "* He never agreed to convey the property until I returned from New York at the time my stepmother was sick. That was after he had returned from prison.”

On her examination on the trial her statement of the facts is somewhat different. She said on her direct examination:

“My stepmother was sick, and not in her right mind, and he [Patrick Larkin] asked me to come and take care of her. He said he would do as he had promised to do before; he would deed me the property,—the house where we lived in. * * * Q. Under what agreement with your father? A. I remained under the agreement that he would deed me the place if I took care of, ;her.”

On cross-examination she said, in answer, to the following question in regard to her testimony on her examination in supplementary proceedings:

“Q. In answer to this question, ‘What was said at the time with, reference to this deed ? ’ did you say: ‘ He gave me the deed, and told me to put it away; it was mine, and 1 should take care of it. He said, “All I want is my support, and to be cared for during the rest of my life.’ I promised to take care of him during the rest of his life, and that is a part of the consideration of this deed tome.” A. He said that. I remember saying nothing. It was my intention. I meant to support him. I made no answer. Q. Did you so testify ? A. I may have. Q. Didn’t you promise to take care of him ? A. I intended to do so. * * * I didn’t promise'it, though.”

Of course, the deposition signed and sworn to by Maria E. Larkin was competent evidence against her.

As to Patrick Larkin, in his deposition (which was competent evidence against him) he said in answer to the following question:

“ Q. The consideration states in consideration of natural love and the sum of one dollar? A. Yes, and for my daughter to support me in my old age.' That answer is not written in the deed. That was a part of the consideration,—that she should support me in old age, and for her services before her mother died and since. That is not written in the deed. Q. Did yon put this in your daughter’s name for the purpose of protecting it? A. I did.”

On the trial, however, he stated the consideration" of the deed to be as follows:

“Part of the money her mother had in it, and her own services, and for what her stepmother left her when she was taking care of her.”

But he did not deny that the conversation between him and his daughter as stated in his disposition, which had been read in evidence when he was sworn, had in fact occurred. In his disposition he had testified:

“She said at the time I deeded it to her that she would take care of me in my old days, and that I would have a home with her. She promised to do that for me. I didn’t know that it was necessary to insert that in the deed. I gave her that deed in consideration of her taking care of me.”

The evidence in the case leads us to believe that when Maria Larkin left her business in New York, and came to Kingston to the care of her stepmother, her father agreed at some future time to convey his house and lot to her, either for taking care of him and his wife or for taking care of Mrs. Larkin alone. But when the deed was actually executed, an additional consideration was agreed upon,—the future support of the grantor. Both of the defendants in their depositions say that that consideration was agreed upon, and we think, under the circumstances, the fact so testified to should be deemed established. Hence, á portion of the consideration for the conveyance in question being an agreement by the grantee for the future support of. the grantor, the deed to the plaintiff must be held fraudulent and void. Jackson v. Parker, 9 Cow. 73 ; Robinson v. Stewart, 10 N. Y. 189 ; Young v. Heermans, 66 N. Y. 374 ; Todd v. Monell, 19 Hun, 362 ;

It is claimed, however, that at the time of the delivery of the deed, both Patrick Larkin and his daughter believed that the action to recover damages for the death of David Kain had terminated by the judgment in favor of the former, and hence there was no intent to defraud the plaintiff. This claim as to Patrick Larkin—his attorney residing in the same city, and an appeal being then pending in the action—does not require serious consideration. As to the defendant Maria, we are inclined to believe that, having knowledge of the action commenced by the plaintiff to recover damages for the death of the decedent, that fact made it her duty to institute inquiries as to the suit. Baker v. Bliss, 39 N. Y. 70 . But if she had no knowledge that the plaintiff’s action to recover damages was pending at the time of the conveyance, or of circumstances that made it her duty to inquire as to the condition of the suit, that fact could not avail her, unless she was a bona fide purchaser in good faith. If we are correct in our contention that a portion of the consideration ©f the conveyance was a secret trust for the future support of the grantor, the deed was not made in good faith. Lukins v. Aird, 6 Wall. 78 ; Moore v. Wood, 100 Ill. 451 ; Lawson v. Funk, 108 Ill. 502 -513. As said in Lukins v. Aird, supra:

“Such a transfer may be upon a valuable consideration, but it lacks the element of good faith; for, while it professes to be an absolute conveyance on its face, there is a concealed agreement between the parties to it inconsistent to its terms, securing a benefit to the grantor at the expense of those he owes. A trust thus secretly created, whether so intended or not, is a fraud on creditors, because it places beyond their reach a valuable right,—the right of possession,—and gives to the debtor the beneficial enjoyment of what rightfully belongs to his creditors.”

In Robinson v. Stewart, supra, the defendant in his sworn answer denied that he knew of the existence of the note of the plaintiff at the time he took the conveyance, and there seems to have been no proof given in that regard. Bat there being a trust in favor of the grantor, the deed under which the defendant claimed was held void. In Moore v. Wood, supra, it is said that a secret “trust for the future support of a grantor, whether so intended or not, is a fraud on creditors.” The trial court, however, found that the consideration of the deed was the promise of said Patrick to and with said Maria to convey the premises to her for her giving up her business and returning to his home to care for his wife, and for and in consideration of the moneys invested by her deceased mother. It will be observed that the con

We think in this case there was no sufficient legal or valid consideration for the conveyance in question, whether such consideration was the arrangement between the parties made on Christmas, 1888, whereby the said Patrick agreed to convey the premises to said Maria in consideration of her future care of Mrs. Larkin, or the agreement entered into when the deed was delivered for the future support of the grantor. In either case the contract was fraudulent and void as against an existing creditor under the authorities to which we have referred, and the grantee could not be deemed a purchaser in good faith.

We conclude that from the facts appearing in this case the inference must be drawn that the conveyance in question was executed with intent to hinder, delay and defraud the plaintiff, and hence that the judgment should be reversed, and a new trial granted; costs to abide the event.

PARKER, P. J., and LANDON and HERRICK, JJ., concur. MERWIN, J., concurs in result.