131 N.Y.S. 829 | N.Y. App. Div. | 1911
Lead Opinion
The fraudulent character of the transactions condemned by the judgment under review was considered by this court, so
I recommend that the judgment appealed from be affirmed, hut in view of the full discussion in the two opinions above referred to, it seems to me that further discussion is unnecessary.
Jenks, P. J., and Rich, J., concurred; Thomas, J., read for reversal, with whom Carr, J., concurred.
Dissenting Opinion
Mary E. Cowperthwait, dying in 1888, by her will made her husband, Frank H. Cowperthwait, and her son, Frederick S. Cowperthwait, trustees to pay the income of her property to the former for his life, with remainders to her children and grandchildren. The questions here involved are (1) whether transfers of stock by Frank to Frederick, as trustee, for moneys diverted from the wife’s estate by Frank, and for moneys advanced by certain of the children, are fraudulent as against judgment creditors of Frank and Frederick; (2) whether Aymar' became a pledgee of certain of such stock in fraud of such creditors. Frank received and used personally $16,400 of money belonging to his wife’s estate, as follows: $2,900 from property sold October, 1904; $7,500 at a date earlier than that, and $6,000 June 29, 1904, the date of the transfer of the stocks. A judgment for $11,949.84 in favor of one Gerard recovered against Frank in 1894, was on January 21, 1897, purchased by the wife’s five children, each contributing $2,400 therefor, and the judgment was assigned to Frederick, trustee. For this Frank gave each child his note for $2,400, still unpaid, except the interest in part. This transaction is conceded. On or about June 29, 1904, Frederick suggested to his father that the sisters and brothers should he protected respecting their mother’s estate and the Gerard judgment, and on that day the father executed to Frederick eleven assignments of certificates of stock, aggregating ninety-nine shares of the Brooklyn Chair Company and three hundred and eight shares of the common stock and sixty-three shares of the preferred stock of the Brooklyn Factory and Power Com
“Dear- Fred.— Enclosed are the assignments of my interest in various stocks held by different parties, that I agreed to give you when you were here on the 29th ult to execute the deed of the Waverly Ave. property. They are made out to you as Trustee of the Gerard judgment that you took up .in 1897, & I hope that in time you will realize enough from them to make you whole, incldg. interest to date of final settlement. Any excess obtained to be paid towards liquidating the other debts of mine after Nancy and Daisy are' taken care of.
“Yours, &c. ' ' FATHEB.”
The action is to set aside certain of these transfers. The original assignments and the subjects thereof were thereafter somewhat modified. All the stock as originally assigned had been issued to Frank and by him pledged to creditors, and stood on the books in the name of the pledgees, and after the assignments Frank (1) procured the release of certain stock and transferred it unincumbered to Frederick, trustee; (2) regained possession of certain of the pledged stock for the purpose of having it entered on the books in the name of Frederick,- trustee, and then returned to the creditors; (3) transferred to Frederick, trustee, additional stock and made substitutions in certain instances -for stock pledged originally. Aymar is one of such creditors. Before considering his conduct, the dealings of father and soil respecting the transfer may be- examined. The status on June 29,' 1904, was that Frederick, held, subject to rights of pledgees, of chair stock ninety-nine shar.es, of power stock three hundred and eight shares common, of power stock preferred sixty-three shares. The father, in addition to the above, hadas his remaining property fifty-two power unpledged shares which, on October 25,' 1904, he transferred to his son as trustee. Aymar held as security the following: Power stock, thirty shares; chair, forty-nine shares, and to this Frank -added on Hay 25, 1905, twenty-five shares of fifty power shares presented at that date to him by the power company, of which he was president. On November 5, 1906, Aymar delivered to Frank the thirty and twenty-five shares of the power company
After this general review of transactions subsequent to the transfer of June 29, 1904, it. is necessary to examine critically the final status of Frederick, trustee, what was in fact done by James, and whether the plaintiff’s rights became superior to those of the beneficiaries and Aymar by reason of a fraud tainting their holdings. Any intelligent conception and judgment of the transaction must keep in constant foreground that
The judgment should be reversed and a new trial granted, costs to abide the final award of costs.
Carr, J., concurred.
Judgment affirmed, with costs.