Childs v. Connor — 38 N.Y. Super. Ct. 471

Majority

p. 471

DANIEL B. CHILDS, as Assignee of MICHAEL CONNOR, Plaintiff and Respondent, v. BRIDGET CONNOR, et al., Defendants and Appellants.

Headnote

STATUTE OF FRAUDS. Vacation of conveyance which is. FRAUDULENT AS AGAINST CREDITORS OR PURCHASERS. PROOFS REQUISITE.

No conveyance is to be adjudged fraudulent as against creditors, solely on the ground that it was not founded on a valuable consideration (2 Rev. Stat. 137, § 4).

In the case at bar, the question is one of fact, and if the circumstances and facts establish that the conveyance was a reasonable and proper provision for the wife ; and that her property had been employed in the purchase of the premises, and that in equity she was the creditor of her husband, in regard to the means employed to purchase the lot, and that the transaction as between the parties to the conveyance, was simply just and equitable, as a settlement for the wife, the conveyance can not be invalidated by the subsequent inability of the husband to pay a debt existing at the time of the conveyance (Babcock v. Eckler, 24 N. Y. 623 ; Baldwin a. Ryan, 3 N. Y. Sup. Ot. 251).

The evidence does not disclose any motive to induce the-defendant Michael Oonnor, to seek to defraud creditors by the transfer of the premises to his wife Bridget Oonnor, and there is an absence of proof that Michael Connor was insolvent or unable to pay all his debts at the time of the conveyance by him.

Held, That the conveyance should not be vacated.,

p. 472

Before Monell, Oh. J., and Curtis, J.

Decided January 4, 1875.

Appeal from a judgment setting aside conveyances from Michael Connor, to the defendant Sweetman, and also a conveyance by Sweetman to Bridget Connor, the wife of Michael Connor, of certain premises in the city of Bew York, and also an appeal from an order granting the plaintiff an allowance.

A. P. Hinman, attorney for appellants.

H. S. Bennett, of counsel.

King & Meyer, attorneys for respondent.

Charles Meyer, of counsel.

The conveyances m controversy were executed on April 28, 1870. The court found that the defendant Michael Connor was at that time indebted to one John Post, and one David Carpenter, and that one Gfibbens preferred a claim against him in tort, for two thousand five hundred dollars, and that by reason of the conveyance, Connor became unable to pay his debts in full, and was rendered insolvent. Subsequently, the court found at the request of the defendants, that the only creditor who held an unsatisfied claim against Michael Connor at the time of the conveyance, April 28, 1870, was John Post.

This subsequent finding accords with the evidence. The claim for the tort had been compromised for one hundred and fifty dollars, and arrangements made for its extinction, in weekly payments, by which it was subsequently, mostly, if not entirely paid, and found by the court to be paid. The indebtedness to Post, •appears to be made up of a note of Michael Connor’s for one hundred and fifty dollars, which Post bought of ■one Carpenter, and the balance of an account between Post and Connor, made up to October 9, 1871, and

p. 473

•extending from May 11, 1869, amounting to three hundred and nine dollars and fifty-four cents, as •claimed by the plaintiff. The testimony is obscure in reference to the note for one hundred and fifty dollars, .given by Connor to Carpenter, and it does not appear •to have been in existence until after the conveyances were executed. Post sold Connor, who was a blacksmith, at frequent intervals, bundles of iron on credit, receiving sums from time to time in payment. In this way he sold to Connor, up to the time of the making of the conveyances, iron amounting to five hundred and thirty dollars, and subsequently, up to October 9,1871, when he ceased to credit him, additional iron amounting to four hundred and one dollars. From the figures given in the evidence, there appears to have been at the time of the conveyance by Connor, April 28, 1870, a balance due Post of one hundred and forty dollars, or thereabouts, and between that time and October 9, 1871, Connor paid the plaintiff three hundred and •seventy-five dollars and fifty-four cents, including fifty-five dollars and fifty-four cents, in old shoes. The evidence fails to show that this balance of one hundred and forty dollars due to Post at the time of the conveyance, was not extinguished by the amounts shortly after paid * by Connor to Post, and in all amounting to three hundred and seventy-five dollars and fifty-four cents.

It would thus appear, that if there was any indebtedness to Post when Connor conveyed the lot, it was very trivial, and the question arises whether this con■veyance was made with the intent to defraud creditors, and should be set aside. The evidence shows that the •defendants Connor and his wife were very ignorant but industrious people. He working at his trade and doing a good business, and she keeping boarders and making dresses, and by their joint savings buying the lot in question. The deed was taken in his name, though the money which was applied towards paying for it, was,

p. 474

in part, her property. She became discontented with this arrangement, and when the action was brought or threatened, for the tort, claiming heavy damages, the conveyances in controversy were executed transferring the property to her.

If he was at this time solvent, and this was done as she claims, as an act of justice to her, and to provide for her and her children, it presents a case deserving of consideration. It is in evidence, and uncontradicted, that at this time Connor’s business was prosperous, and that he had other property and two horses worth nine hundred and fifty dollars, or which he subsequently sold for that sum. He had compromised the claim for the tort, and owed, if any sum whatever, not to exceed five hundred dollars, and the evidence fails to show that he had any adequate motive for attempting to commit a. fraud. It is in evidence, that about two years after the-transfer of the lot, Connor fell sick, and competition set in, and his business ran down. His wife has ever' since been in possession of the lot, and paid the interest upon the mortgage upon it.

By the revised statutes, it is declared that no conveyance or charge shall be adjudged fraudulent as against creditors or purchasers, solely on the ground that it was not founded on a valuable consideration (2 Rev. Stat. 137, § 4). The question is one of fact, and if the circumstances show that the conveyance was a reasonable and proper provision for the wife, and that her property had. been employed in the purchase of the lot, and that in equity she was the creditor of her husband, and that in the condition of the husband’s estate at the time, there-was nothing more in the transaction than what was just and fair as a settlement for her, the conveyance can not be invalidated by his subsequent inability to pay a debt., then existing (Babcock v. Eckler, 24 N. Y. 623 ; Baldwin v. Ryan, 3 N. Y. Supreme Ct. R. 251).

Upon a careful consideration of the evidence, there

p. 475

appears to be no motive disclosed to induce the defendant Connor to seek to defraud creditors by this transfer. There is an entire failure of proof that he was insolvent or unable to pay all his debts, which, if any, were insignificant in amount at the time. The conveyance to the wife was a proper provision for her; and in view of the fact that she had contributed towards the original purchase, and had always claimed that the lot should be held as a provision for her and her children, it was no more than a reasonable, and just, and prudent act on the part of the husband.

In this view of the case, it becomes unnecessary to consider the question raised by the appeal from the order granting the allowance of one hundred and fifty dollars to the plaintiff, but it is difficult to see how, in any contingency, more than five per cent, could be granted upon the amount of plaintiff’s judgment for six hundred and twenty-seven dollars and ninety-three cents against the defendant, the payment of which he seeks to recover from the property in question. The substitution of Daniel B. Childs, assignee in bankruptcy of Michael Connor, as plaintiff, on May 28, 1874, can not enlarge the amount of the claim or subject-matter involved.

The judgment should be reversed, and a new trial .granted, with costs to appellant to abide the event.

Monell, Ch. J.. concurred.

Cases cited

Babcock v. Eckler 24 N. Y. 623 N.Y. p. 471, p. 474