Case ID: nys_56/html/0959-01.html
Source: Caselaw Access Project
Author: {"author": "McLENNAN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WRIGHT v. LOUD et al.
    (Supreme Court, Appellate Division, Fourth Department.
    March 22, 1899.)
    1. Fraudulent Conveyance—Evidence.
    Immediately after a debtor had induced a creditor to refrain from entering judgment for a few days, in reliance on his assurance that the debt would be paid, he conveyed his entire property, amounting, according to an inventory made with the transfer, to more than $11,000, to one to whom he was not indebted, solely to pay certain unliquidated demands of other creditors, not exceeding $3,500, and without any express agreement on the part of the transferee that he would apply it thereto. Held, that the conveyance was fraudulent.
    2. Referee’s Finding of Fact—Improper Classification—Effect.
    Though a referee’s finding of fact was called a conclusion of law, and so improperly classified in the decision, to uphold the judgment it will be given the same effect as though embraced within and designated as one of the findings of fact.
    Appeal from judgment on report of referee.
    
      Action by William B. Wright, Jr., as receiver of the property of Theodore H. and George C. Meyers, against William F. Bond, impleaded with Theodore EL and George C. Meyers. From a judgment in favor of plaintiff, entered on the report of a referee, defendants appeal.
    Affirmed.
    The action was commenced on the 11th day of December, 1896, to set aside a conveyance of personal property which was in writing, and hearing date the 10th day of November, 1866, made by the defendants Meyers to the defendant Loud, upon the ground that said conveyance is void, and was made with the intention on the part of the defendants Meyers to hinder, delay, and defraud their creditors, and especially one Charles T. Wilson, and was received by said defendant Loud with like intent On the 10th day of November, 1896, and for some time prior thereto, the defendants Meyers were co-partners, engaged in the lumber business, in the city of Buffalo, N. Y. As such co-partners they became indebted to one Charles T. Wilson, for goods sold and delivered, in the sum of $238.16. On the 21st day of October, 1896, an action was commenced in the supreme court by said Wilson against the defendants Meyers to recover such sum. At that time the defendants Meyers were indebted to other persons in large amounts and were insolvent. On said 10th day of November, 1896, which was the last day to appear and answer in the action brought by said Wilson, Theodore H. Meyers, one of the co-partners, called upon the attorney for Wilson, and requested him (said attorney) to defer entering judgment against them (said defendants Meyers) for a few days, and promised to pay, .or attempt to pay, Wilson’s said claim in the . meantime. This the attorney for Wilson assented to, and did not enter judgment against the defendants Meyers until the 17th day of November, 1896. On that day judgment was entered for the sum of $258.86, damages and costs. Execution was immediately issued thereon, and was returned wholly unsatisfied; the defendants Bleyers having no property out of which said execution could be made, or any part thereof. No part of said judgment has been paid except the sum of $50, which was duly credited upon said judgment. Immediately after the return of the execution unsatisfied, proceedings supplementary to execution were instituted, and such proceedings were had as resulted in the appointment of the plaintiff as receiver of the property >of the defendants Meyers. The plaintiff duly qualified as receiver, entered upon the discharge of his duties, and has ever since been acting as such receiver. On the said 10th day of November, 1896, and immediately after leaving the office of Wilson’s attorney, the defendants Meyers made and executed the bill of sale in question, which is in the words and figures following, to wit:
    “Know all men by these presents, that we, Theodore H. Meyers and George C. Meyers, composing the firm of Theodore H. Meyers & Co., of Buffalo, N. Y., of the first part, for and in consideration of the sum of four thousand dollars ($4,000.00), lawful money of the United States, to them in hand paid, at or before the ensealing and delivery of these presents, by William E. Loud, of the city, of Buffalo, N. Y., of the second part, the receipt whereof is hereby acknowledged, have bargained and sold, and by these presents do grant and convey, unto the said party, of the second part, his executors, administrators, and assigns, 4 horses, 2 buggies, 2 cutters, 30 carts, 1 lumber wagon, all of the stock of lumber, lath, shingles, and so forth, now contained in our yard, corner of Perry and Louisiana streets, in the city of Buffalo, all office furniture at said yard, and all of the book accounts of the said firm of Theodore H. Meyers & Co., a list of which is hereto annexed, and 4 sets of single harness. This conveyance is made for the purpose and with the understanding that the said William E. Loud shall conduct and continue the lumber business as it has been carried on by us, sell the said stock and so forth, collect the said accounts, and from the proceeds thereof pay, first, all of the indebtedness of the firm of Theodore H. Bleyers & Co. to H. M. Loud & Sons, of Buffalo, N. Y.; (2) pay all the indebtedness of the firm of Theodore H. Meyers & Co. to the Georgian Bay Lumber Go.; and (3) pay all the indebtedness of Theodore H. Bleyers & Co. to Charles H. Cutting,—to have and to hold the same unto the said party of the second part, his executors, adminiscrators, and assigns, forever. And we do covenant to and with the said party of the second part that we are the owners and have the right to sell and transfer the said property, and will defend the same against any persons whomsoever claiming the same. In witness whereof we have hereunto set our hands and seals the 10th day of November, in the year of our Lord one thousand eight hundred and. ninety-six.
    “Theodore H. Meyers. [L. S.] “George C. Meyers. [L. S.]
    “In presence of-."
    On the 11th day of November, 1896, the instrument above set forth was delivered to a Mr. Wilcox, who was the agent of, and who assumed to represent, the defendant William F. Loud; and said Wilcox, assuming to represent and act for said Loud, immediately took possession of the property in question, and caused the bill of sale to be filed in the clerk’s office of Brie county on the morning of the 14th day of November, 1896. The inventory of the property which the defendants assumed to transfer by said bill of sale, and which was annexed to the same, amounted to the sum of about $11,000. There is evidence tending to show, however, that the actual value of the property transferred was much less. At the time of such transfer the defendants Meyers were indebted to H. M. Loud & Sons Lumber Company in the sum of between $500 and $600. They were indebted to the Georgian Bay Lumber Company in about the sum of $2,500. They were also indebted to Charles H. Cutting in some amount. At the time of the transfer the defendants Meyers did not know, even approximately, the amount of their indebtedness to either of the parties above named and mentioned in said bill of- sale. At the time of the trial they did not know the amount of such indebtedness. So far as the bill of Mr. Cutting was concerned, it was for legal services, the exact amount of which had never been ascertained, and at the time of the trial he (Mr. Cutting) could only state that the services which he rendered were worth, in his opinion, about the sum of $500. The defendants Meyers upon the trial testified that they did not know whether said bill of Mr. Cutting was $500 or $2,000. There is no suggestion that Wilcox, the agent and representative of the defendant Loud, knew anything about the amount of the indebtedness of the defendants Meyers to the Georgian Bay Lumber Company or to Mr. Cutting. The H. M. Loud & Sons Lumber Company is a-corporation, of which the defendant William F. Loud, the transferee named in the bill of sale, was at the times in question a member, and was its cashier. The defendants Meyers were not indebted to him in any sum whatsoever, and the transfer to him was taken in his name through his agent Wilcox, without any knowledge on the part of Mr. Loud as to the details of the transaction, or that such transfer had been made, until possession was taken of the property.
    Argued before HARDEN, P. J., and FOLLETT, ADAMS, MCLENNAN, and SPRING, JJ.
    J. McC. Mitchell, for appellants.
    Albert G. Spann, for respondent.
   McLENNAN, J.

The learned referee found as a fact that by the bill of sale in question the defendants Meyers, as co-partners, assumed to transfer all their property to the defendant Loud; that the defendant Loud paid no consideration whatsoever for such transfer, and that the same was wholly without consideration; that the defendants Meyers at the time of such pretended transfer were not indebted to the defendant Loud in any sum whatsoever, either individually or as co-partners. The learned referee also found, which finding was classified as a conclusion of law, “that said pretended bill of sale was made, executed, and delivered by said Theodore H. Meyers and George C. Meyers for the purpose of hindering, delaying, and defrauding their creditors.” We think the evidence amply justified the findings of the referee that the transfer in question was made by the defendants Meyers for the purpose of hindering, delaying, and defrauding their creditors. By the instrument in question, the defendants assumed to transfer their entire property, amounting, according to the inventory made by them at the time of such transfer, to more than $11,-000, to the defendant Loud, to whom they were not indebted in any amount, for the sole purpose of enabling him to pay certain unliquidated demands of other creditors to whom they were indebted, which, according to the undisputed evidence, did not exceed the sum of $3,500, and without any express agreement on the part of the defendant Loud that he would apply the proceeds of the property so transferred to him to the payment even of such indebtedness; and such transfer was made immediately after the defendant Theodore H. Meyers had a conversation with the attorney for Wilson, the natural effect of which was to induce said attorney to refrain from entering judgment for the amount of said Wilson’s claim for a few days, relying upon the assurance, expressed or implied, that no change in the property of the defendants Meyers would take place in the meantime.

It is urged on the part of the appellants that there is no finding of fact by the referee that the instrument in question was executed with intent to hinder, delay, and defraud creditors; that the conclusion of the referee “that said pretended bill of sale was made, executed, and delivered by said Theodore H. Meyers and George C. Meyers to said William F. Loud, for the purpose of hindering, delaying, and defrauding their creditors, and is void, null, and ineffectual as against the judgment of- said Charles T. Wilson,” cannot be given the effect of a finding of fact, but must be held to be a conclusion of law. This contention is not well founded. In the case of Berger v. Varrelmann, 127 N. Y. 281, 27 N. E. 1065, the court say:

“It is well settled that though a finding of fact be called a conclusion of law, and improperly classified as such in the decision signed, it will, for the purpose of upholding a judgment, be given the same effect as though embraced within, and designated as one of, the findings of fact.” Adams v. Fitzpatrick, 125 N. Y. 124, 26 N. E. 143; Christopher & T. St. R. Co. v. Twenty-Third St. Ry. Co., 149 N. Y. 51, 43 N. E. 538.

Having reached the conclusion that the learned referee found, in effect, as a fact, although classified as a conclusion óf law, that the transfer in question was made for the purpose of hindering, delaying, and defrauding the creditors of the defendants Meyers, and that such finding of fact is fully sustained by the evidence, it is unnecessary to pass upon the other questions raised by the appellants upon this appeal. It follows that the judgment entered upon the decision of the referee should be affirmed, with costs.

Judgment affirmed, with costs. All concur.