Case Name: George H. Spitzli, as Receiver, etc., Plaintiff, v. Michael J. Dulan et al., Defendants
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1896-09
Citations: 18 Misc. 121
Docket Number: 
Parties: George H. Spitzli, as Receiver, etc., Plaintiff, v. Michael J. Dulan et al., Defendants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 18
Pages: 121–123

Head Matter:
George H. Spitzli, as Receiver, etc., Plaintiff, v. Michael J. Dulan et al., Defendants.
(Supreme Court, Oneida Special Term,
September, 1896.)
Fraudulent conveyances — Evidence.
Where the evidence, in an action brought to set aside a conveyance made by a husband to a wife, tends to show that the wife, many years before the trial, made slight advances to her husband to assist him in his business; that these advances were never made the subject of a claim by the wife against the husband until he became embarrassed, and that they were then attempted to be made the basis of a demand note given by the husband to the wife, the transaction is fraudulent, and the conveyance predicated upon the note must be set aside.
Action to set aside certain transfers of property as being fraudulent and void as against creditors.
Charles H. Searle, for plaintiff.
M. H. Sexton, for defendants.

Opinion:
Hiscock, J.
This is an action to set aside as fraudulent and void as to plaintiff and the creditors whom he represents:
1. A certain transfer executed by the defendant Michael J. Dulan, through one Moak, to. the defendant Mary E. Dulan, on or • about May 25, 1877, of his interest in certain premises situate in' the city of Utica.
2. A deed executed by the said Michael J. to the said Mary E. on or about September 25, 1894, of certain premises in said city,
3. A transfer executed by said Michael J. to said Mary E. on or about said last-mentioned date of certain goods and book accounts,
The case is submitted to rue upon the evidence' as taken before Justice Vann, and I have not, therefore, had the advantage of personally seeing and hearing the parties and witnesses testify. I have, however, very carefully examined the record as submitted to me in the light of the. very full and painstaking arguments presented by counsel for the respective parties, both orally and by briefs, and after such examination, I.am led to the conclusions:
1. That the deed of May, 1877, is valid and should stand.
2. That the deed and transfer of September, 1894, are each invalid as against plaintiff and the indebtedness which he represents and should be set aside.
I am convinced that originally the parties to these transfers intended to uphold them as given mainly in consideration and settlement of an alleged indebtedness due from Michael J. Dulan to his wife for services claimed to have been performed by the latter in the store of the former. Later, when the difficulties of sustaining them upon this theory were more considered, the attempt was made to sustain them as. given in payment of moneys loaned, by Mary to Michael as claimed to be represented by the. note of May 4, 1893. ' .
It is possible that the defendant Mary E. Dulan did have. some, moneys/from time to time,, which were her own and which she could and did give to her husband. But I cannot bring myself to the conclusion that at the date said note was given he owed her for tona fide indebtedness, $3,952, or anything like that amount. If she advanced him any. moneys they were of. insignificant sums x as compared with that' sum. Furthermore, I believe that such advances, if any, had'been paid or offset in some manner long before the note was given, or, if this had not been done, it was be'cause they were regarded by both parties as contributions by the wife to the success of her husband's business which were not to be treated as actual live indebtedness upon which his property could be taken away from undisputed creditors. This is shown in various ways. Upon Mrs. Bulan's own evidence these alleged debts were allowed to lie for years and years until they were all, I think, outlawed. It is true that she claims to have repeatedly asked for payment of these, but the readiness with which the husband executed to her the demand note in 1893, and the subsequent transfers of his property make it difficult to believe that there had been for almost twenty years, in the case of some of the alleged items, an unsuccessful effort to enforce a bona fide indebtedness. Upon his part, the husband admits, in one place, that this now alleged indebtedness was treated as " a kind of dead letter," and in another place that it was a subject to which " he never gave ' a thought." . Hone of the inventories, statements and books kept in Michael's business and which were open to both contained the slightest record of or reference to this alleged indebtedness which, if it existed, aggregated more than all of Michael's other debts and had rendered him hopelessly insolvent during all of the time when the record discloses the condition of his business.
The impression forced upon my mind by all of the evidence, both upon the trial and in the supplementary proceedings, is that in 1893, Michae.1 J- Bulan commenced to become embarrassed financially to his' wife's knowledge, and they commenced preparations to save his property from the wreck when it should come. In accordance with this purpose the note was given which could be enforced at any time and, subsequently, based upon it, the transfers complained of. Still later when these acts were, attacked by creditors the attempt has beeu made to sustain them upon the alleged consider a tious in which I have referred, and which do not seem to me to have any legal existence.
If my views are correct, Mary E. Bulan was necessarily a party to the fraud, and the deed and bill of sale of September, 1894, should be set aside absolutely and entirely.
Findings and judgment in favor of plaintiff in accordance herewith may be prepared.
Judgment for plaintiff.