Jackson ex dem. Wyck v. Seward

5 Cow. 67 | N.Y. Sup. Ct. | 1825

Curia, per Sutherland, J.

It is admitted that there was no actual fraudulent intent on the part of William Seward, in making conveyance to his son, the defendant, of the 16th of April, 1818. But it is contended that the conveyance was voluntary, and therefore fraudulent, in judgment of law, as against the lessor of the plaintiff, who was a prior creditor.

L Was Van Wyck a creditor within the statute ?

2. If a creditor, was the conveyance fraudulent as against him ?•

The case of Jackson v. Myers, (18 John. 425,) and the authorities there cited, appear to me to establish the position that Van Wyck stood in a relation to William Seward, which entitled him to the protection of the statute. Whether he was strictly a creditor or not, witnm the meaning and provisions of the English bankrupt act, I do not think it material to inquire; for our statute for the prevention of frauds, is not confined to creditors only, but it avoids all conveyances, &c. devised and contrived with the purpose and intent to delay, hinder, or defraud creditors and others, of their just actions, &c. &c.

Now most of the cases cited by the defendants’ counsel, upon this point, were decisions under the English bankrupt acts; and, admitting them to establish that the lessor of the plaintiff would not be considered a creditor under those acts, it would not follow, that he is not enti;led to the protection of our act for the prevention of frauds. In Jackson v. Myers, (18 John. 425,) it was held that, although the plaintiff had no debt or demand against the grantor in the fraudulent conveyance at the time it was executed, but merely an action in maleficio pending, the deeds were fraudulent within the true construction of the statute. And in Mountford v. Ranie, (Keb. 499,) the conveyance was held fraudulent, although the plaintiff had become creditor only by the escape of a prisoner, and although the bond on which the judgment was obtained, had been given many years subsequent to the conveyance.

The question of creditor or not, cannot turn on the ground of contingent liability when considering this act. if it should, all indorsers and sureties would be deprived of its protection. It was said in Twyne’s case, (3 Rep. 82,) and reiterated by this Court in Jackson v. Myers, that the statute extends not only to creditors, but to all others who had cause of action or suit, or any penalty or forfeiture. And it has always been held that the statute was entitled to a literal construction for the suppression of fraud.

The demand in this ease, fundamentally, as it is expressed by Roberts, (in his treatise on Fraudulent Conveyances, 459,) arose before the conveyance. It arose upon a covenant prior in date to the conveyance, for the performance of a collateral, and, if yon please, contingent act. But it cannot be said that the covenantor was ignorant of his liability, so as to exempt him from the imputation of fraud under the statute, if he has made a voluntary conveyance.

2. Was the conveyance in this case voluntary ? The consideration expressed in the deed is $10,000. The consideration proved, is an annuity to the grantor of $500 during his life ; and the bonds of the defendant to his sisters, the daughters of the grantor, for about $4500, payable in six months after his death. The annuity is proved to have beqn paid for four years. The bonds have not been paid. The grantor died in July, 1822. The essence of the transaction is the same .as though the grantor had conveyed all his estate to his children, either in equal or unequal proportions, reserving an annuity from each, proportioned to the respective portions of the estate. Instead of giving any portion of his farm to his daughters, he gives the whole to his son, and charges it with the sums intended for the advancement of his daughters. The annuity paid to the grantor, cannot enure by way of pecuniary consideration to the support of the deed. The payments were subsequent to the conveyance. The annuity was in the nature of rent for the use of the farm ; and cannot be considered the consideration for the conveyance. It is a deed of gift to his children; so intended by the grantor in perfect truth and honesty, and so understood by all the witnesses whom he consulted, or to whom he explained his views and wishes.

Is such a conveyance valid against a prior' creditor ? Chancellor Kent, in Reade v. Livingston, (3 John. Ch. Rep. 481,) has discussed this question with his usual learning and ability; and, after analizing all the cases, he comes (id. 500,) to this general conclusion: “ That if the party be indebted at the time of a voluntary settlement, it is presumed to be frauduleht, in respect to such debts; and no circumstances will permit those debts to be affected by the settlement, or repel the legal presumption of fraud.” The presumption of law in this case does not depend upon the amount of the debts or the extent of the property in settle-men t, or the circumstances of the party. “ There is,” he observes, “ no such line of distinction set up or traced in any of the cases. The attempt would be embarrassing, if not dangerous, to the rights of creditors, and prove an inlet to fraud. The law has therefore wisely disabled the debtor from making any voluntary settlement of his estate, to stand in the way of his existing debts. This is the clear alrd uniform doctrine of the cases.”

With respect to the claims of subsequent creditors, he held that the presumption of fraud, arising from the circumstance that the party was indebted at the time, may be repelled ; that it is repelled by the fact of those debts being secured by mortgage, or by a provision in the settlement: that if no such circumstances exist, the subsequent creditor may show prior indebtedness ; that as to subsequent debts, there is no necessary legal presumption of fraud, from a voluntary conveyance ; and that there must be proof of fraud, in fact; and that the indebtedness at the time of the conveyance, in order to he available to a subsequent creditor, must be such, in its circumstances and amount, as to justify the conclusion of fraud.

The Chancellor considers the case of Salmon v. Bennett, (1 Day’s Conn. Rep. N. S. 525,) as against the cur-nt and weight of English decisions ; and as not intended to conform to those decisions upon the statutes against fraudulent conveyances. It would be worse than useless, for me to follow the Chancellor in his analysis of the English cases. I have looked into most of them, and am satisfied that, so far as is necessary for the decision of this case, the conclusions which he has drawn are fully warranted, not only on the ground of authority, but by considerations of the soundest policy and wisdom.

Judgment for the plaintiff.