Case ID: ny-st-rep_19/html/0122-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Gray, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Horace Bush et al., as Administrator, etc., Resp’ts, v. Henry L. Roberts, Impleaded, etc., App’lt.
    
    
      (Court of Appeals,
    
    
      Filed November 27, 1888.)
    
    1. Declarations—When admissible in evidence.
    In order tliat the declarations of a party, •which are claimed to be a part of the transaction which is in question, may be admissible, theymust grow out of the principle fact or transaction, illustrate its character, be co-temporaneous with it and derive some degree of credit from it.
    2. Same—When not part oe res gestíe.
    On the trial of an action to set aside a certain conveyance of real and personal properly made by the defendant Robbins to the plaintiff Roberts, and have it declared fraudulent and void as to the intestate, who was a creditor of said defendant Robbins, the question involved was whether Roberts had actual notice of Robbins intent or a knowledge of the circumstances connected with Robbins’ act in disposing of his property to defraud his creditors. Reid, that proof of the declarations or misrepresentations of Robbins respecting his indebtedness, and the value of his property made before the transfer and before even the negotiations for any transfer, was not competent against Roberts; that they in no sense formed part of the.subsequent transaction between them.
    Appeal from a judgment of the supreme court, general term, fifth department, affirming a judgment in favor of the plaintiff entered at special term.
    The plaintiffs, as administrators of one Henry T. Wake-field, deceased, brought the present action to have set aside and declared fraudulent and void as against a judgment recovered by them, a certain conveyance of real and personal property, made by defendant Orrin G-. Robbins to defendant Henry L. Roberts.
    The defendant Robbins did not appear or defend in the action, and the trial was had upon the issues raised by the answer of the defendant Roberts to the complaint. At the time of the death of the intestate, Wakefield, on November 29, 1883, the defendant Robbins, in whose employ the intestate has been for many years, was largely indebted to him. That indebtedness was to. some extent secured by mortgages on a portion of Robbins’ farm, and to some extent was unsecured.
    The judgment, which is the basis of the plaintiff’s complaint, was obtained against Robbins on January 10, 1881. The conveyance which is attacked was made on December 7, 1883, and affected a portion of Robbins’ farm, which was not covered by the mortgages, and a large amount of personal property located upon it. The consideration for the conveyance was $7,500, which the trial judge found on the evidence to be $1,600 less than the value of the property transferred. At the time of the execution of the conveyance Roberts gave his due bill for the purchase price, and the deed and due bill were deposited with a third party for three days, when the parties met, and the deed and bill were delivered to them as they were respectively entitled thereto under the transaction of sale. Within a few days afterwards the deed was recorded, and the bill paid, less the amount of a judgment for $500, recorded against Robbins, and of some unpaid taxes. Soon thereafter Robbins disappeared and was not seen again in that locality.
    The trial resulted in a judgment against the defendants. Defendant Roberts appealed therefrom to the general term, which affirmed the judgment below, and from that judgment of affirmance he appeals to this court.
    
      Watson M. Rogers, for app’lt; Thomas E. Jones, for resp’ts.
    
      
       Reversing 40 Hun, 635, mem.
      
    
   Gray, J.

Various facts, which he decided to be proved by the evidence, led the learned trial judge to conclude that the transfer of property by the defendant Robbins to the defendant Roberts was made with the intent to hinder, delay and defraud creditors, and therefore to be void; but, in the chain of evidence leading to his conclusion, which seems, so far as it establishes knowledge in the vendee, not very weighty, was a conversation had between one of the plaintiffs and Robbins, shortly after the death of the intestate and prior to the transfer of the property. The evidence of this conversation was elicited on the opening of the plaintiff’s case. Bush, one of the plaintiffs, had testified to a visit, which he and his co-administrator had made to Robbins’ house for the purpose of taking possession of the effects of their intestate, and that on that occasion he had a conversation with Robbins upon the subject of the claims of this estate held against him and this property.” He was asked by plaintiff’s counsel to state that conversation. This was objected to by counsel for defendant Roberts, who alone had appeared and was defending the action, on the ground that it was incompetent and immaterial as against that defendant; but the objection was overruled and the evidence was received. The witness thereupon testified to the statements made by Robbins in the course of the conversation. It seems to us evident that these statements were deemed of importance and material by the trial judge, because in his ninth finding of fact, after stating the circumstances of the plaintiff’s visit to Robbins’ house he incorporates them. He finds that plaintiffs had conversation with defendant Robbins, who in reply to questions put to him by Bush, one of the plaintiffs, informed them that he was a large debtor to said estate; that it had been allowed to run for years without interest being paid, and he didn’t know just how much it was,” and other facts which Robbins stated then about the quantity and value of his property. The materiality of the evidence of these declarations of Robbins, obviously, was in their bearing upon Robbins’ solvency and his motives and intent as deducible from his admissions, his misrepresentations and his conduct. Roberts, however, was a purchaser for a valuable consideration, and there was no proof establishing any conspiracy between him and his vendor Robbins to defraud Robbins’ creditors.

The force of the action was directed against Roberts to deprive him of the property which he had bought and the action could only prevail by proof that he had actual notice of a fraudulent motive on Robbin’s part, or knowledge of circumstances which was equivalent to such notice. If he knew, or had believed the motives of his vendor to be fraudulent, then, by aiding him in his scheme, he made himself a party to the fraud. Parker v. Conner, 93 N. Y., 118. But no evidence is competent proof to affect him, or his right to the possession of his property, which falls short of proving the nature of the transaction, and of illustrating the guilty participation of the vendee. If this was a case of a conspiracy to defraud Robbins’ creditors, admitted or proved, the admissions or declarations of either would be competent as against the other; the principle of their admissibility assuming the fact of the conspiracy being established. Cuyler v. McCartney, 40 N. Y., 221-228. But this is not such a case, and no proof is admissible as against Roberts of acts or declarations of Robbins, unless a part of the res gestae, or unless falling within the rule of admissibility as being against his (Robert’s) interest; and the fact that Robbins is a party defendant does not make them so. In order that the declarations of a party, which are claimed to be part of the transaction, may be admissible they must grow out of the principal fact or transaction; illustrate its character; be cotemporaneous with it and derive some degree of credit from it. Lund v. Tyngsborough, 9 Cusb., 36. But proof of the declarations or misrepresentations of Robbins respecting his indebtedness and the value of his property, made before the transfer and before even the negotiations for any transfer, is not competent against Roberts; for they in no sense formed a part of the subsequent transaction between them, and their admission into the case to charge Roberts with the liability to restore the property is, we think, clearly a violation of the principles of evidence in such cases and without support in authority.

The question here is whether Roberts had actual notice of Robbins’ intent, or the knowledge of circumstances connected with Robbins’ act in disposing of his property to defraud his creditors. Did he for his own advantage, or with no such idea, make himself a participant in the fraudulent plan? Unless the proofs are confined within the limits of charging Roberts with such a participation, the safeguards designed by the rules of jurisprudence, as a protection to those who act in good faith and with honest motives, are endangered. The trial judge found as facts the existence of the fraudulent intent in the vendor, Robbins, and of notice in the vendee, Roberts, of that intent; but these findings, it is manifest from his decision, rested more or less on the statements of the vendor to the plaintiff, Bush. While expressing no opinion here as to the general merits of the case, or as to the weight of the proof, we do say that in a case of such a nature, where the proofs are conflicting, and not clearly preponderating against the defendant, the erroneous admission or exclusion of evidence was likely to have affected, in a material degree, the conclusions of the judge.

We see no reason why the principle of the decisions in the cases of Tousley v. Barry, 16 N. Y., at page 500, and of Truax v. Slater, 86 N. Y., 632, should not control in the present case. In Tousley v. Barry, Johnson, Ch. J., decided that the admission of a previous owner of a chose in action cannot be proved against a purchaser from him, who has bought for a fair consideration and between whom and the former owner there exists no other relation than that of purchaser and seller; that it was not the case of á nominal purchase, the former owner retaining the equitable interest, ut of an actual and complete transfer of all interest to the purchaser.

In Truax v. Slater, Earl, J., held that “the mere declarations of an assignor of a chose in action,_ forming no part of any res gestee, are not competent to prejudice the title of his assignee, whether the assignee be one for value, or merely a trustee for creditors, ana whether such declarations be antecedent or subsequent to the assignment.”

We think, for the error pointed out, the judgment should be reversed, and a new trial granted, with costs to abide the event.

All concur