Faringer v. Ramsay

4 Md. Ch. 33 | New York Court of Chancery | 1850

The Chancellor:

These bills are filed by the complainant, as the permanent trustee in insolvency of Jacob Earinger, her former husband, but now deceased, and seek to set aside the deeds therein mentioned, not as frauds upon her marital rights, but upon the ground that they were made in prejudice of the rights of creditors. The allegations to be sure, are not entirely free from ambiguity. It being in one place alleged, that one of the objects of the conveyances was “to deprive the complainant, and her children by the said Jacob, of all benefit in it, in his life, and after his death.” And in another place, that the deeds were made “to the said Eliza Ramsay for the fraudulent purpose of enjoying the property during his life, and leaving it to the said Eliza Ramsay after his death, disencumbered of the interest of the complainant therein, as the widow of said Jacob, and for the further fraudulent purpose of rendering the same free from the claims of his creditors, and of the complainant for a support.” Wherefore (the bill charges) that the said contrivance was fraudulent, and that in equity, she (the complainant) as the permanent trustee of the said Jacob, is entitled to have said property brought into the assets of the estate of the said Jacob, to be distributed according to law.” The bills, however, are filed by the complainant in her character of permanent trustee of Jacob Faringer, and not as his widow claiming her share of his personal estate, and the question, therefore, is, whether in the former capacity she is entitled to have the conveyances avoided and the property turned over to her to be administered in insolvency ?

These cases, then, in this view of the claim made by the bills, which upon the argument I understood to be the view taken by the plaintiff’s solicitor, renders inapplicable to the questions now to be decided, the principles settled by this court in Hays vs. Hays, decided in February, 1849, because in that case the deed was impeached by the complainant, as widow, and it was set aside, and the property ordered to be sold for the purpose of paying her one-third of the proceeds, as widow. Every other question affecting the residue of the proceeds of the sale being expressly reserved.

The deeds in these cases were all made to the defendant, Eliza Ramsay, and vest in her the absolute and unqualified title to the property embraced in them. There is not upon their face the slightest reservation or indication of an interest, legal or equitable, in Jacob Faringer, and consequently his permanent trustee cannot question their validity or effect, unless she can show either that they are fraudulent under our insolvent system, or under the statute of Elizabeth, or that from the nature and justice of the case there is a resulting trust for the benefit of Jacob Faringer to be implied by law, from the fact that the consideration money was paid by him, and as trusts of this description are expressly excepted from the operation of the statute of frauds, the fact of the payment may be established by parol proof. But although the fact of the payment of the money may be shown by parol proof, the evidence must be so strong and decisive as to leave no reasonable doubt upon the subject. The cases all concur in this because of the danger of this description of proof, not only as tending to perjury, but on account of the insecurity to which its introduction exposes the paper title. Boyd vs. McLean, 1 Johns., Ch. Rep., 582.

In this case I have examined the proof very carefully, and though there are circumstances connected with the transaction, and the condition, habits and occupation of the parties from which it may be inferred that the purchase money for these parcels of the property was paid by Faringer, I do not find that clear and positive testimony which the principles so frequently and finally settled imperatively demand. The evidence upon this point, in my judgment, falls far below the standard established by the authorities, and I, therefore, do not feel warranted in declaring that this property is impressed with a ■resulting trust for Faringer.

The deed from William E. Beale to Eliza Ramsay, was executed on the 7th of April, 1845, and that of Daniel J. XIoppoldt and Samuel Kramer, to the same party, on the 4th of February, 1847. On the day of the execution of the first deed, Eliza Ramsay executed a mortgage of the property thereby conveyed to her, to David K. Brown, to secure the payment of $212, for which she had given him her promissory note, so much being due to him from Beale, and which by agreement of the parties, she, Eliza Ramsay, W'as to pay to Brown, and on the 31st of March, in the year 1846, the debt due to Mr. Brown having been paid by Eliza Ramsay, he, on that day, released the mortgage which she had given to him to secure its payment.

Faringer died in the year 1849, but the precise time of his death is not stated, having in the same year applied for the benefit of the insolvent laws, and the bill alleges, that the complainant was appointed his permanent trustee on the 11th of June of that year.

The bill does not allege, nor is it shown in proof, that he was indebted at the • time of the execution of the conveyances in question, unless the charge that “they were made to Eliza Ramsay for the fraudulent purpose of rendering the same free from the claims of his creditors,” can be construed to amount to such an allegation. It seems to me, however, that the averment referred to, may quite as well apply to subsequent as prior creditors. But even if it is to be understood as meaning prior creditors, and that the object was to defraud them, there is no proof in support of the allegation, the existence of no such debt being shown. There is, besides, neither allegation or proof, that Jacob Paringer at the time of the execution of these instruments contemplated availing himself of the insolvent laws, or that they were made, or caused to be made by him with any such view or expectation, and, therefore, they cannot be declared to be void ns frauds upon the insolvent system.

Neither upon the allegations of the bill, or the proofs in the «cause, can they in my judgment, be pronounced fraudulent and void under the statute of Elizabeth, as having been made with intent to delay, hinder and defraud creditors. It is not averred, or proved, that there were any creditors at the date of those conveyances to be defrauded, hindered and delayed, nor indeed is it directly charged or proved, that Paringer contracted debts subsequently, even if the deeds could be regarded as fraudulent as against subsequent creditors. The fact of his having taken the benefit of the insolvent laws, in the year 1849, furnishes to be sure a strong presumption that he was indebted at the time, but there is nothing in the record, either in the shape of pleadings or proof, to show the amount of such indebtedness, or the value of the property which came to the hands of the complainant as his trustee. But if these defects in the case of the complainant were removed, still there would exist the difficulty of showing that the money with which the property was purchased was supplied by Paringer. It is true, there are circumstances from which it may be inferred' that his money paid for the property, but it is equally true, that there are circumstances of a countervailing character, and the answer of the defendant responsive to the bill, stands directly opposed to any such inference.

William M. Addison, for Complainant. Charles IT. Pitts, for Defendants.

Upon a careful consideration of the whole case, therefore, I do not feel myself at liberty to grant the relief prayed by these bills. The parties by their counsel have signed and filed an agreement that the proof taken in the first of the foregoing cases may be used in the second cause, as if taken in it, and for dividing the expense of executing the commission between the two causes which have been argued together, and depend upon the same principles. They will, therefore, he consolidated, and the bills dismissed, but under the circumstances they will be dismissed without costs.