Del Valle v. Hyland

Tins action is brought by a judgment creditor of the defendant Navarro to set aside the transfer made to the defendant Hyland of •.five life insurance policies upon the life of the defendant Navarro for $10,000 each, on the ground that the samé was made to hinder, .delay and defraud the creditors of N avarro.

The first trial of this action resulted in a judgment dismissing the •complaint upon the plaintiff’s case, which judgment upon appeal to this court was reversed, and a new trial ordered (40 N. Y. St. R,epr. •■924) upon the ground that the proof would have sustained, although it did not require, a finding that the assignment was made in bad ffaith, and with intent to hinder creditors, and that it was error to •dismiss the complaint.

Upon the second trial and upon the whole evidence, as well of the •defendants .as of the plaintiff, a judgment was rendered dismissing •the complaint .as to both defendants upon the merits.

As upon the first trial, it now apjiears that “in January or February, 1889, Mr. Josiah A. Hyland, one of the defendants, found •on the table in his private office a written instrument purporting to have been executed by Mr. Jose F. Navarro, the other defendant, on the 31st day of December, 1888, whereby that gentleman transferred to him all his right, title and interest in and to five policies •of life insurance for $10,000 each, subject to a claim thereon of ,$15,000 by Charles Coudert’s executor, for which Mr. Ooudert held the policies as collateral security.”

Although the transfer was not personally delivered to the defendant Hyland, but was, as stated, found by him on his table, it appears by the evidence of both defendants that its being placed there was the result of prior conversations resulting in an agreement by Mr. Navarro to deliver such policies in payment of his indebtedness to Mr. Hyland.

The value of such policies on the 31st of December, 1888, in case of the death of Navarro, was considerably over $50,000, and as paid-up policies, nearly that amount, and their value as cash policies on that date was $24,039.95. So that if we deduct the $15,000 due to Mr. Coudert and interest, there would remain a cash value in the policies of about $9,000.

It was found by the learned trial judge, and conceded, that at the

Cash prior to and up to tbe 24th day of November, 1880. $6,132 00

Interest on same wbicb tbe defendant Navarro guaranteed to tbe defendant Hyland on tbe money given him from November 24,1880, to December 31,1888. 2,981 IT

Indebtedness of defendant Navarro to defendant Hyland for professional legal services from in or about 1880 up to December 31, 1888........................ 5,000 00

Indebtedness of defendant Navarro to defendant Hyland for office rent of defendant Navarro’s two sons...... 2,000 00

Deficiency judgment paid by defendant Hyland on or about February 29, 1888, on a bond given by him at tbe request of tbe defendant Navarro for money received by defendant Navarro on a loan on real estate in Eighty-seventh street, New York' city........... 2,5T3.11

These claims for moneys advanced, services rendered, office rent, and for tbe payment of tbe deficiency judgment, were supported by tbe testimony of both defendants, and if sucb testimony is to be credited, then tbe findings of tbe court below were amply sustained and tbe judgment should not be disturbed. Because it would thus appear tbat, for an indebtedness of about $18,000, tbe defendant Hyland bad received policies, the cash value of wbicb would not exceed $10,000 over and above the $15,000 for wbicb it wras pledged to Mr. Coudert. Tbe fact tbat tbe defendant Navarro was insolvent and tbat Mr. Hyland knew it, would not prevent tbe former from securing or paying tbe latter a valid existing indebtedness, and tbe giving of a preference to Hyland cannot be successfully assailed by tbe other creditors. Tbat a debtor has tbe right to pay tbe claim of one creditor in preference to and to tbe exclusion of all tbe others, has been many times decided.

Though a criticism can justly be made upon tbe loose way in

In an action of this kind, where an assignment or transfer is sought to he set aside upon the ground that it was made with intent to hinder, delay and defraud creditors, presenting as it does a question of fact, and when upon sufficient evidence this is determined one way or the other, and there is no such preponderance of evidence as would require this court to set aside the judgment and' grant a new trial, then the decision of the trial judge should not be disturbed.

11 ere a suspicion is created by reason of the peculiarity and stalcness of some of the items going to make up the indebtedness. And where,, as here, a claim remains unpaid for a period so long that it is barred by the Statute of Limitations, then a doubt as to whether it has not been paid, or. as to its ever having had a valid existence, is created. Hut, where it is shown that there was a moral obligation, to say the least, to reimburse the defendant Hyland for what he had paid out in settlement of the deficiency judgment or loaned in cash to Navarro, although the claim may have been barred by the Statute of Limitations, there is present a sufficient consideration for a transfer of property in payment, provided the amount of such property is not so excessive that it appears to have been made with intent to hinder, delay and defraud creditors, or provided such intent is not. otherwise shown.