41 N.Y.S. 112 | N.Y. Sup. Ct. | 1896
This action is brought to set aside two deeds, one dated October 31, 1889, and the other June 19, 1893, given by the defendant Bobert 0. Fonda to his wife, the other defendant, upon the ground that they were given with, intent to hinder, delay and defraud creditors. The facts, so far as they are material to the questions involved, are as follows:
In May, 1881, one E. M. Crawford procured the plaintiff to discount a note for $1,500, made ■ by him and indorsed for his
The statute provides that every conveyance of property made with the intent to hinder, delay or defraud creditors of their lawful suits, damages, etc., shall be void as against the creditors so hindered, delayed or defrauded. 2 R. S. 137, par. 1. The question of a fraudulent intent is one of fact and not of law. Id., par. 4. The intent is the one thing upon which the validity of a conveyance must be tested when brought in review under this act. The want of a valuable consideration is not alone sufficient to sustain the charge of fraudulent intent. It is, however, an important fact to be considered when searching for the intent. And if it be found that such conveyance includes all of the debtor’s property so that there is not enough left to pay his debts, then it is controlling evidence -of a fraudulent purpose as against his then existing creditors.
The conveyance in question being voluntary, without consideration, and covering substantially all of the property of the judgment debtor so that there is nothing left out of which the plaintiff can collect its judgment, is presumptively fraudulent if the plaintiff at the time the conveyance was made was a creditor. This I do. not understand to be seriously questioned, by the defendants, but they insist that the defendant Robert 0. Fonda was not a debtor of the plaintiff at the time the conveyance was made, and, therefore, the defendant had a perfect right to give away his property. At the time the transfer was made the defendant was indorser upon a note which had been discounted by the plaintiff; the note was not due, and until the note fell due a cause of action against the indorser could not be enforced. TJntil the note became due the defendant’s liability as indorser was contingent and depended upon nonpayment by the maker, protest and notice by the bank. That the liability at the time of the conveyance was contingent, I think, however, makes no difference. The term “ creditor ” as used in the statut’e has been and ought to be liberally construed. It should receive such an.interpretation as will enable it to accomplish the design for which it was enacted. And where a bank has- been induced to loan money upon the responsibility of an indorser, and possibly upon Ms responsibility alone, it can fairly, and justly claim the protection of this statute in reference to the indorser’s property.
Plaintiff having obtained judgment upon the note given in renewal of the original obligation, it stands in the position as if the first note had not been paid, and in law it must be treated as a creditor relating back to the date of the execution of the first note, and the fact that the defendant Robert 0. was simply an accommodation indorser makes no difference. It is true that his liability as indorser at the time of the conveyance was only contingent^ but it afterward became absolute and he thereupon became a debtor from the date of the original obligation. An indorser upon commercial paper who makes a voluntary conveyance of all his property falls as much within the provision of the statute relating to voluntary conveyances as the maker of the paper, and it makes no difference whether the debt is or is not due at the time of the conveyance. Van Wyck v. Seward, 18 Wend. 375; Moosbrugger v. Walsh, 89 Hun, 564; Thompson v. Thompson, 19 Me. 244; Stone v. Myers, 9 Minn. 303; Carlisle v. Rich, 8 N. H. 44; Crane v. Stickles, 15 Vt. 252; Bay v. Cook, 31 Ill. 336; Post v. Stiger, 29 N. J. Eq. 558; see also McLaughlin v. Bank of Potomac, 7 How. (U. S.) 220. It follows that the transfer in question cannot be supported upon the ground that when the conveyance was made the defendant Robert C. was not a debtor of the bank.
I think, however, the facts in this ease show actual fraud, and
I think the plaintiff is entitled to judgment, so far as the Conveyance of June 19, 1893, is concerned, as prayed for in the complaint, with costs.
Judgment for plaintiff, with Costs.