84 N.J. Eq. 49 | New York Court of Chancery | 1914
The bill is filed by complainant as a judgment creditor in aid of his judgment. Belief is sought by complainant against conveyances of real estate made by Ernest Armstrong, the judgment debtor, to an intermediary and by the intermediary to the wife of the judgment debtor. At the time these conveyances were made complainant was working for Mr. Armstrong, and the major part of the money for which the judgment was subsequently recovered had been earned by complainant, but was not payable until the work should be finished; a small part of the money included in the judgment was due and payable at the time the conveyances were made. If the property in question belonged to Mr. Armstrong and was conveyed to his wife without valuable consideration, the conveyances are obviously void as against complainant. Haston v. Castner, 31 N. J. Eq. 697. The defence is that the property was originally purchased by Mrs. Armstrong with her own money and title taken in the name of her husband, and that the transfer of the title from her husband to her was to restore the legal title to its owner. The joint answer of Mr. and Mrs. Armstrong asserts that the title was taken in the name of Mr. Armstrong by inadvertence and without the knowledge of Mrs. Armstrong, and that the conveyance was made to her by her husband at her instance when she discovered that the title was in his name. At the hearing both Mr. and Mrs. Armstrong testified that the title was taken in Mr. Armstrong’s name by prearrangement between them for purposes of convenience only and that the money of Mrs. Armstrong purchased the property; her canceled check for the purchase price was produced in support of their claim.
There does not exist the slightest doubt touching the facts. Both Mr. and Mrs. Armstrong deliberately perjured themselves upon the witness-stand in the hope of escaping payment of the
The facts are that the property in question was purchased by Mr. Armstrong with his own money and the improvements to the property were made by him with his own money, and no thought of Mrs. Armstrong owning the property occurred to either of them until certain difficulties occurred between Mr. Armstrong and a contractor whom he had employed to work on the property. It was then that the transfer to the wife was made, and it was then made to protect the property from claims existing or to arise against Mr. Armstrong. As against complainant the transfer is void and will be 'set aside.
A more difficult question has arisen touching a certain mortgage which has been placed upon the property since the transfer of the legal title to Mrs. Armstrong. Mrs. Armstrong procured from defendant Economy Building and Loan Association a loan secured by a mortgage on the property in question. The loan was made by the application of a portion of the amount loaned to the discharge of a mortgage then existing against the property and the balance of the loan was paid by the association to Mrs. Armstrong. (It may be added, parenthetically, that this balance reached Mr. Armstrong, but not with knowledge of the association.) It is conceded that the building association will be
So far as I am aware, this question has not heretofore arisen in this state. The authorities in other jurisdictions are in apparent conflict, but I think the clear weight of authority is to the effect that the mere fact that a deed of conveyance in a. chain of title discloses that it was a voluntary conveyance is not enough to put a purchaser upon inquiry. That doctrine is stated in Bump Fraud. Conv. § 495, as follows:
“The law sanctions a conveyance founded upon the consideration of blood, or of matrimony, merely. The legal presumption therefore is that such a conveyance is valid and not a fraud upon the rights of anyone. The mere fact that a purchaser from the holder of such a title has notice that it was not founded upon a pecuniary consideration is not sufficient to make it his duty at his peril to inquire whether the title of his grantor was not fraudulent. On the contrary, he has a right to act upon the legal presumption that such a deed of gift or voluntary settlement was honestly made until some other fact is brought to his knowledge to raise a suspicion in his mind that the conveyance is fraudulent.”
It is true that in this state a voluntary conveyance is regarded as void as against existing creditors, and in some circumstances void as to future creditors; but it is not the want of valuable consideration which renders it void; it is that circumstances accompanied by the additional circumstance of indebtedness or fraudulent intent, and even then the conveyance is only void as against creditors. A conveyance importing a valuable considera
I will advise a decree in behalf of complainant as against defendants Ernest and Anna Armstrong, and dismiss the bill as to defendant Economy Building and Loan Association.