Case Name: Charles G. Howe, Respondent, v. Charles H. Sommers and Mary A. Berrian, Otherwise Known as Mary A. Lyddy, Appellants, Impleaded with Edward L. Stevens
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1897
Citations: 22 A.D. 417
Docket Number: 
Parties: Charles G. Howe, Respondent, v. Charles H. Sommers and Mary A. Berrian, Otherwise Known as Mary A. Lyddy, Appellants, Impleaded with Edward L. Stevens.
Judges: 
Reporter: Appellate Division Reports
Volume: 22
Pages: 417–426

Head Matter:
Charles G. Howe, Respondent, v. Charles H. Sommers and Mary A. Berrian, Otherwise Known as Mary A. Lyddy, Appellants, Impleaded with Edward L. Stevens.
Preference of one creditor by an insolvent debtor — what facts establish an intent to defraud creditors.
In an action brought by an attorney to set aside an assignment, made by his client, of a legacy, in recovering which the attorney had rendered legal services, it appeared that, after one adjournment of an action in a City Court brought by the attorney to recover for such services had been obtained by the client upon a statement made by his counsel that the plaintiff would be able to collect any judgment from the defendant, the attorney recovered judgment; that the client then obtained a stay of proceedings upon the ground that he was able to pay and intended to give security upon an appeal; that on the same or on the next day, when the attorney entered judgment in his action, the client assigned the legacy, his only property, to a woman who was a most intimate personal friend and a witness in his favor upon the trial in the City Court, in payment of an alleged debt to her not satisfactorily established; that-within a few weeks she assigned the legacy to her sister for an inadequate-consideration. There were also other circumstances tending to strengthen the-conclusion that the client’s obj ect was to put the property out of the reach of his creditors, and that in this design his friend and assignee participated.
Held, that the evidence tended to show that the preference was invalid; that the assignment was made by the client with intent to hinder and delay his creditors, and that his immediate assignee shared in that purpose.
Goodrich, P. J., dissented.
Appeal by the defendants, Charles H. Sommers and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of' the clerk of the county of W estchester on the 6th day of May, 1897, upon the decision of the court rendered after a trial at the Westchester Special Term declaring null and void an assignment from the defendant Challes H. Sommers to the defendant Mary A. Berrian, and setting the same aside so far as the plaintiff is concerned, and directing the defendant Edward L. Stevens to 'pay to the plaintiff or his attorneys the sum of $1,340.68.
The facts are fully stated in the dissenting opinion of Goodrich, P. J.
John T. Ganavan, for-the appellants.
James M. Hunt, for the respondent.

Opinion:
Cullen, J. :
This is a judgment creditor's action to set aside as fraudulent an assignment of a legacy. I concur with the presiding justice that the debtor, though insolvent, had the right to prefer one creditor to other creditors; that fraud is to be proved, not presumed; and that if the facts proved are as consistent with innocence as with guilt, the evidence is insufficient to establish the fraud. At the same time, fraud can rarely be proved except by circumstantial evidence; and though the issue be fraud, still in a civil action it is not necessary that the charge should be proved beyond a reasonable doubt; it is sufficient that it is established by a fair preponderance of evidence. Also, we cannot treat the case as though it were before us in the first instance. To reverse the judgment it is not sufficient that we might have reached a different conclusion from the evidence, but we must be able to assert affirmatively, with reasonable certainty, that in its findings the trial court erred, The learned Special Term found that the transfer was made by the judgment debtor with intent to defraud his creditors, and that there was grave doubt as to the existence of the consideration. We think the evidence is sufficient to support these conclusions, and for myself I may say that were the case before me for original disposition I should be inclined to reach the same conclusion.
The relation between the judgment debtor and his assignee was more than that of debtor and creditor. It appears to have been that of a most intimate personal friendship. On the trial of the ¡action in the City Court of Yonkers, brought by the plaintiff against the defendant Sommers to recover liis claim, the defendant Berrian .appeared as a witness. She must have been familiar with the applications for delays and for stays. A postponement of the cause was ¡requested on the ground of the defendant's illness, and an hour ¡afterwards he appeared in court with the defendant Berrian. The counsel stated to the court, at the time of the first application for the postponement, that the plaintiff would be able to collect his judgment from the defendant Sommers, and on this statement obtained an adjournment for a week. When the cause was tried ¡and a verdict rendered in favor of the plaintiff, the defendant asked for a stay on the statement that he was fully able to respond to the claim and to give a bond. On this same day, either at the time the statement was made or after the stay had been granted on the faith of the statement, Sommers assigned the legacy in suit to Mrs. Berrian, stripping himself of all his property. It was the plaintiff's services that led to the discovery of the very fund which was thus assigned to defeat his claim. It is true that Sommers had the right to prefer Mrs. Berrian (if she was his creditor) to the plaintiff, no matter what his equities may have been, but if his intention was to prefer his creditor by the payment of an honest debt, he does not seem to have formed it until the very moment when he found he was no longer able to prevent the plaintiff from recovering his just claim. After the receipt of the assignment from Sommers, Mrs. Berrian, within a few weeks, assigned the legacy to her sister. The amount coming on the legacy was about $6,000. The alleged debt from Mrs. Berrian to her sister was about $900. There are other circumstances, unnecessary to recite, which further strengthen the conclusion that the object of Sommers was not to pay his debt, if there was one, but to put his property out of the reach of his creditor (the plaintiff), and that in this design the defendant Berrian participated. If there were a valid debt existing from Sommers to Mrs. Berrian, that fact would not support the transfer or assignment if it was made in bad faith, to hinder or delay Sommers' creditors, and in that purpose the defendant Berrian shared. (Billings v. Russell, 101 N. Y. 226.) I am also of opinion that the existence of the claim of Mrs. Berrian against Sommers was not satisfactorily established, and that the trial court would have been justified in holding it did not exist.
The judgment appealed from should be affirmed, with costs.
All concurred, except Goodrich, P. J., dissenting'and reading for reversal.