Shoemaker v. Hastings

61 How. Pr. 79 | N.Y. Sup. Ct. | 1881

Talcott, P. J.

This action was tried at the Steuben county circuit, and the exceptions sent to be heard here in the first instance after a verdict for the plaintiff. The action was brought to recover the value of one yoke of oxen and of certain railroad ties, which the defendants had caused to be levied upon and sold as the property of Daniel Shoemaker, Sr., the father of the two plaintiffs, by virtue of a judgment and execution against him.

The defendants claimed that a certain contract between said Daniel Shoemaker, Sr., for the conveyance to the plaintiffs of certain real estate and personal property consisting of cattle, horses., farming utensils, &c., by Daniel Shoemaker, Sr., to the plaintiffs, and of which the yoke of cattle sued for constituted a portion, was void as having been made with the intent to hinder, delay and defraud the creditors of the said Daniel Shoemaker, Sr. The contract in question was made in September,. 1876. It seems that the father was a man of intemperate habits, having a wife and four children. The plaintiffs were two of those children. The other two consisted of a son aged fourteen and a daughter of the age of eleven. The two plaintiffs had for some time carried on the principal business of the plaintiff’s farm, and then owned, as tenents in common in their own right, a tract of land adjoining their father’s farm, known as the “ Blakesly lot.” For some time the business of carrying on the farm owned by the father had, by reason of his intemperate habits, devolved on the plaintiffs, and they had been negotiating with him for a purchase of the farm owned by him, which consisted of a lot known as the “ Kilbury lot,” containing about 110 acres, of which he held the title in fee, subject to a mortgage of about $1,250, and another parcel known as the Dorsey lot, which he held under a contract of purchase, on which there was, with the accumulated interest due, some $850. The real estate appears to have been worth as follows : The “ Kilbury lot,” twenty-five dollars per acre, $2,750 ; the “ Dorsey ” lot, twenty dollars per acre, fifty-eight acres, $1,160. He was also indebted upon certain outstanding notes given by him to various parties prior to the 1st of September, 1876. He also owned certain personal property con-siting of cattle, horses and farming utensils, some grain and cord wood. In negotiating with the boys, Daniel, senior, claimed that this personal property was worth $1,500. But the parties disagreed as to the value .of the personal property and they finally agreed to leave it to a neighbor, a Mr. Brooks, to appraise the value of the personal property, which he fixed at only $1,800, for which they were to give the father a mortgage payable iñ ten years, with annual interest. But before the agreement was made the plaintiffs and their father, at the suggestion of Mr. Brooks, agreed to maintain the two younger children until they should respectively arrive at the age of twenty-one years, and then to pay each of them $150, and that the mortgage to the father should be made for $1,000 instead of $1,300. Finally the articles of agreement were entered into under the date of September 20, 1876, the father agreeing to convey to the plaintiffs the “ Kilbury lot ” by a quit-claim deed, and to assign the contract for the “ Dorsey lot,” and the plaintiffs on their part agreeing to pay all the promissory notes of their father given before September 1, 1876, and to pay the mortgage on the “ Kilbury lot,” and the amount unpaid on the contract for the “ Dorsey lot,” and also to support and maintain the two younger children until they should respectively arrive at the age of twenty-one years and then to pay each of them $150, and to give their father a mortgage for $1,000 as specified. Soon after the conveyances were executed and delivered as agreed. On the trial it appeared that the plaintiffs had caused to be cut and drawn to the neighboring railroad, for sale to the road after they should have been inspected by' the inspector for the railroad, the railroad ties which the plaintiffs had sold on their execution. They had been cut and drawn from the various lots mentioned, and how many were cut upon each lot seemed to be uncertain.

The court held and ruled that the transfer was void under that section of the statute which is contained in the Revised Statutes as the first section of the statute of frauds, and which is in the following words, viz.:

“All deeds of gift, all conveyances and all transfers or assignments, verbal or written, of goods, chattels or things in action, made in trust for the use of the person making the same, shall be void as against the creditors existing or subsequent of such person.” (2 R. S. [2d ed.], 70.)

The counsel for the plaintiffs requested the court to submit to the jury the question whether this transfer was fraudulent, and the question whether the transfer of the land was fraudulent. But the court declined to submit either question to the jury, but held that the transfer was fraudulent and void per se under the said section of the statute, and only left to the jury the question of the amount and value of such of the railroad ties as had been cut from the “ Blakesly lot.” To such ruling the plaintiff’s counsel excepted, and that is the question presented by the case. We think the learned justice at the circuit erred in his construction of the statute in question. 1. Because the statute, by its terms, only applies to personal property, and could not affect the transfer of the land, and this error was in confining the question submitted to the jury to an investigation of the number and value of the railroad ties which had been, by the plaintiffs, got from the “ Blakesly lot; ” and, secondly, the statute referred to does not apply to actual sales, whether fraudulent or not, but only to transfers, &c., without consideration, and in trust for the exel/wswe benefit of the grcmtee, and the transfer in this case did not purport to be of that character.

This section of the statute came under the examination of the court of appeals in the leading case of Curtis et al. agt. Leavitt (15 N. Y., 9); and in that case judge Comstock, after an exhaustive examination of the statute, holds the following language at page 122 of the case:

“All reasoning and authority, as we have seen, concur in the conclusion that it (the section in question) has no application to cases of real and actual alienation upon valuable consideration, and for active and real purposes, although incidental benefits are reserved to the grantor. There is -one other possible interpretation of the statute, and that is the one to which the language points. It is the deed to the use of the grantor which is void, and not the deed to other uses and for other objects. Its true name should be a statute of personal uses; the object is to simply render ineffectual purely nominal transfers of personal estate. Where the entire use and control are, by a declaration of trust, in or out of the instrument left in him who makes the transfer, its policy is not unlike that of the statute concerning passive uses or trusts in lands, which have had, along with this, a contemporaneous existence of some centuries. It is not in any proper sense a statute against frauds, although fraudulent practices may have led to its enactment, but it is founded on the self-evident principle that man’s property should pay his debts, although he has vested a nominal title in another. For that purpose the statute declares the title to be in the debtor, and no transfer which is entirely nominal can stand in the way. It has no reference to intentions, whether fraudulent or honest. * * * The statute only avoids conveyances which are wholly to the use of the grantor.” Judge Brown, who also delivered an opinion ir. the same case, after an examination of the statute, and a reference to the case of Mackie agt. Cairns (Hopk., 373), and quoting a portion" of the opinion of the chancellor delivered in that case says: “ These observations exhibit the true rule of construction, and show that the trusts referred to in the section are those mere passive trusts, exclusively for the use of the grantor, and where the title of the trustee is purely nominal, and the grantor is to retain the control and enjoyment of the property, and not trusts which are incidental expressed or resulting to the use of the grantor.”

It is stated in the series of propositions adopted by the court, at the close of the case of Curtis agt. Leavitt (at page 295, proposition 3) that the court is “ of the opinion that the statute applies only to the conveyances, &c., primarily for the use of the grantor, and not to instruments for other and active purposes, where the reservations to the grantor are incidental and partial.” We are of the opinion, therefore,, that the learned justice at the circuit erred in holding that the statute in question applied to the case. The transfer was intended to be an actual alienation of the property described in it, and was not a conveyance in trust for the use of -the grantor alone, and therefore did not fall within the condemnation of the section of the statute referred to. Aside from the ruling by which it was held that the assignment of the property was, on its face and per se void, and considering the amount of the property left in the hands of the father by the mortgage from the plaintiffs to him as compared with the small amount of those debts which were not assumed by the plaintiffs, together with the willingness manifested by Daniel, senior, to secure by good, indorsed notes the payment of the plaintiff’s debt, and all the other debts then owing by him, we think the evidence presented a question of fact, as whether Daniel Shoemaker, Sr., intended by the transfer of his real and personal property to delay, hinder or defraud his creditors, which should have been submitted to. the jury, in accordance with the request of the plaintiff’s counsel. We do not see anything in the transfer of the property to the plaintiffs which necessarily operated as a fraud on the creditors of their father. .

A new trial is ordered, costs to abide the event.