Case Name: Ella L. O'Brien and Mary E. Brady, Respondents, v. Bertha E. Whigam and Catherine Etzel, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 9 A.D. 113
Docket Number: 
Parties: Ella L. O’Brien and Mary E. Brady, Respondents, v. Bertha E. Whigam and Catherine Etzel, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 9
Pages: 113–115

Head Matter:
Ella L. O’Brien and Mary E. Brady, Respondents, v. Bertha E. Whigam and Catherine Etzel, Appellants.
Fraudulent conveyance—a lessor, under an existing lease, is a creditor of a fraudulent grantor—evidence of fraud.
In an action brought to set aside a conveyance as fraudulent, it appeared that at the time of the conveyance the plaintiffs and the grantor occupied the relation of landlord and tenant under a lease which provided for a renewal, if "necessary, by arbitration. Pursuant to this provision a new lease was made under an arbitration as to the amount of rent, and the tenant continued in occupation but made default as to subsequent rent, for which the plaintiffs recovered judgments against her.
Meld, that as there was both before and after the alleged fraudulent conveyance a subsisting continuing liability upon the part of the grantor to pay rent to the plaintiffs, they were creditors within the meaning of the statute at the time the transfer was made, and were entitled to attack it.
What evidence is sufficient to warrant a finding of - fraudulent intent in making a conveyance, considered.
Appeal by the defendants, Bertha E. Whigam and another, from a judgment of the Supreme Court in favor of the plaintiffs, entered-in the office of the clerk of the county of Kings on the 16th day of May, 1896, upon the decision of the court rendered after a trial at the Kings County Special Term.
Frank Gardner, for the appellants.
Francis R. Whitney, for the respondents.

Opinion:
Hatch, J.:
This is a judgment creditor's action which asks to have set. aside -as fraudulent a conveyance made by the judgment debtor, Bertha E. Whigam, to Catherine Etzel. Plaintiffs aré the owners, of certain premises which, at the time when they acquired title,, were leased to the defendant Whigam for a term of. five years at the annual rental of $2,100. This léase provided for a renewal, at a rental to be agreed upon, and in the event' of failure by the parties to agree, the stun was to be determined by arbitrators as. provided therein. The lease expired in 1894, and tiie parties being-unable to agree, arbitration fixed the yearly. rental- at $2,300.. The defendant Whigam continued under this lease until February,, 1895, when she was dispossessed for non-payment of rent. On the 2d day of November, 1893, she transferred all her property, consisting of several pieces of real estate, to her-sister, the defendant ' Catherine Etzel. A nominal consideration of one dollar for the transfer was expressed in the deed; The deed was- not recorded until the ltth day of May, 1894. There was a failure to pay rent tinder the 'renewed -lease, and judgments were recovered therefor in the aggregate sum .of $1,580.37, on the 13th day of July, 1894, and the 29th of March, 1895, respectively. The court below ' found that1 the transfer of the real property by the defendant Whigam was in fraud of plaintiffs' rights and adjudged .the same void.: It was not.essential to the maintenance of' this 'action-.that the defendant Whigam should, have been indebted' to the plaintiffs at the time when she made the transfer of her property. If sha in fact made ¡the- transfer, intending thereby to place her property beyond the reach of those who might subsequently become her creditors, the transfer became .void as to. them, as- well as to those who had subsisting claims at the time the transfer was made. (King v. Wilcox, 11 Paige, 589.)
At the timé when the conveyance was made, there was a Subsisting lease, the privilege of renewal .existed, and whether it should be renewed or! not was at the option of the lessee. , She having exercised that option by a renewal, there was at all times an existing continuing liability Upon.her part to pay the rent secured, thereby. This condition constituted the plaintiffs creditors - within the meaning of the statute at the time the transfer was made. (Young v. Heermans, 66 N. Y. 374; Anderson v. Anderson, 64 Ala. 403; Bump Fraud. Conv. § 501-506.)
. In either aspect of this case the plaintiffs are to be treated! as creditors having a standing .to attack this conveyance. (Savage v. Murphy, 34 N. Y. 508 ; Cole v. Tyler, 65 id. 73.)
The evidence warranted the finding of the -fraudulent intent in making the: conveyance. It is needless to examine and set out: in detail each particular fact which authorized the finding of the fraudulent intent. The main. features -are found in the fact that . defendant Whigam was conducting a losing business upon the leased prémises; there appeared to be no necessity for the conveyance, as the sister was not pressing for payment, assuming the debt- existed, and was not aware of the conveyance at the time it was made. The deed expressed a nominal consideration only, and was withheld from record for a considerable period after its execution, and was only placed thereon shortly before an installment, of rent fell due. The court might well say that the consideration for the deed, which was subsequently asserted, was an afterthought. • It is quite clear that the sum claimed for wages to the sister was extravagantly large; no contract was ever made to pay her wages, and nothing was ever paid to or demanded by her on account thereof. The circumstances attending the creation of this claim authorized its entire rejection. If, however, full effect was given to the whole consideration claimed, it still failed of being adequate for the property conveyed, upon a conceded valuation, by between $5,000 and $6,000. Within the authorities cited the court was clearly authorized to make the finding which it did. (Fuller v. Brown, 76 Hun, 557; Smith v. Reid, 13 N. Y. 568.)
The judgment should be affirmed, with costs.
All concurred.
Judgment affirmed, with costs.