New-York tribune., 1841-09-29

corrected by the Assistant Vice Chascsiior
Is c#AxcrRY, BEFORE TIE AsssrAsT VICE CHANCELLOR
The United stefe' Of 4nser'eG Right of subsequent
VS.. Creditors TO impeaoh u
Henry Patio, LoHiSG Angelo coryrvanca
Caustei, and Others.
ls4, July lG-sfr Wiiam Kent forthe Complainant,
Aag. 3.-Osden Hoffman and DIR. A"'hoH tof INC
Defendant, Causici.
THE ASSISTANT Vrcz CHAScELLoR-Ihe HE
terial facts of this are these On the M
November the defendant, Patio, was seizen u '"e
premises in question: subject TO certain A''
and he then executed deed with covenants - '-'
defendant Causici, in consideration Oh 3o-'O''
citing thar i, was subject 10 three mortgages amount
ina n $4,000. This deed was acknowledged on
&c ..,oa d., but ne, recorded. Mr.. Grim states
,b., in n.vnent Of the consideration money, wiz
a1a oooj bills were drawn BY Mrs Caesici IN favor
of PATIO and endorsed by him the order OF Castro
pnon the House Of Hounger & Co. Of Paris; that
the deed was left with him as an escrow to be de-
livered absolutely upon the payment Of such bills
These were all dated the said 18th Of November,
a, 100 days sight, and accepted on the 9Th OF
January. and paid on the 9th of May, l335. On the
18th OF June, s35, new deed was executed, ac-
Jnowledged and delivered by Patio to Mrs. Causici
the old one being retained by Mr.. Grim and produced
in evidence.
This transaction is thus explained The mort
gagees had insisted upon payment in the interim be
tween the delivery in and the payment of the
bills. The deed being in escrow, no legal title OF
course existed in Mrs Causci enable her to mort
gage. Patio alone could do this 1t was found that
bv means of a new mortgage the money could be
raised. This was executed by Patio and counsel
then deemed !, advisable TO take new deed from
him.
/, also to be noticed that Mr. Grim swears cx-
pressly tina, the rents and profits after November,
1894 we're received by him account Of t.s defend
ant Patio was allowed TO collect while the first
deed remained in escrow, before advice Of the
payment Of the bills but he accounted the witness,
for his receipts.
In the course of the month Of March 1885, and
after the 2st the defendant, Patio became indebted
on Custom House Bonds 10 the United States, and
judgements were recovered agains, him from the 9th
10 the 10Th October 1888.
There is evidence that PATTI, at the date of the
transaction in November 1884 wa, indebted at ALL
excep, upon his bond accompanying one of the mort
cages upon the premises. The only testimony in the
cause to the point is that of Dias who says he under
stood from Castro that Patio worth nothing. He
owned the property in question, on which he had Dor
rowed $4,000 and which was worth more than all the
incumbrances upon it. The only debt which appears
was secured.
1t is very clear that the transaction is to be test
ed by the situation of the parties in November,
1884 Whether at law the deed then executed
would be treated after paymcnt of the bills vest
ing the title from its date to me iRmatcrial
1t is enough that in this court it would be consid
cred as an executing contract: and If made in
good faith, and for fair consideration, the decd
executed in pursuance of it, or in fact the contract
without any deed, would supersede and take pri
ority over every subsequent Judgment.
Then the question is resolved into this, whether
the transaction in November, 1884, was honest, or
meant TO deceive and defraud the United States /;
whether made with view TO the creation of the
debt subsequently entered into. and for the purpose
of sheltering the property from the liability which
that debt might be the means of fixing upon 1t; or
at least whether it was made with view to future
debts generally, and for such purpose.
put the point strongly in this form, because
am satisfied tina, the law of our state now requires
this where prior creditor assails the conveyance.
purely voluntary this would be test
In the long history of the cases upon the statute
of the 18th Elizabeth, point was of course al I
lowed, that voluntary conveyance was void as TO
subsequent creditors if it could be shown that it
was made with view TO the creation Of the debt
in question, and to defeat It's recovery.
There arose another doctrine strongly sustained
by authority, that prior creditors successfully
sailed it, subsequent creditors should be let in to
share in the property. And then n very few cases
and several dicta and much reasoning of eemen-
taIy writers are TO be found to prove that subsc-
queut creditors could themselves, without the aid
of previous ones, impeach such conveyance.
Without going into the numerous cases, it will
suffice to refer TO the learned opinion Of Chan
cellor Kent, in Read W.. Livingston IS, John {.
RI
1t was not, as the Chancellor states, the point
before him. and the not an express decision;
but ii was deliberately argued by him, and has al
ways been received with great Difference. The
summary of it Is, that subsequent creditors could
overthrow voluntary deed, by proving heavy
amount of Indebtedness at the time that slight
and current debt for ordinary expenses would not
do, and on the other side absolute insolvency was
not necessary.
In subsequent case Richardson VS. Smallwood,
/ Jucobs 552) Sir Thomas Plumer strongly argued
in favour OF the right of future creditors TO impeach
= voluntary deed As decision, the case is open
10 two observatons--frSt, that the party
der contingent liability at the date OF the convey
ance which he subsequently paid Now it has
been held in our country that sach liability, for
example that of u surety, brings the party within
the statute OF Elizabeth as an existing creditor
(C0riisie vs.. Rich, \ II. Rep. So. Hors vs.
IF0rd Greencaf, 1856. See also Whiting ham
VS.. Jennings e Si,nonS iQ3
Neat, the settler was dead There were some
of the prior debts still due. and the master of the
rolls said it was fully decided that the property be-
come assets, and all creditors would be let In Still