Case Name: BYRON J. SCOFIELD, as Receiver, etc., of WILLIAM SPAULDING, Respondent, v. WILLIAM SPAULDING and PHILO B. SPAULDING, Appellants
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-11
Citations: 61 N.Y. Sup. Ct. 523
Docket Number: 
Parties: BYRON J. SCOFIELD, as Receiver, etc., of WILLIAM SPAULDING, Respondent, v. WILLIAM SPAULDING and PHILO B. SPAULDING, Appellants.
Judges: Merwin, J., concurred.
Reporter: Supreme Court Reports (Hun)
Volume: 61
Pages: 523–532

Head Matter:
BYRON J. SCOFIELD, as Receiver, etc., of WILLIAM SPAULDING, Respondent, v. WILLIAM SPAULDING and PHILO B. SPAULDING, Appellants.
JPi-audulent conveyance — declamations of the alleged, fraudulent grantor, made before and after the conveyance, competent against him — his declarations made subsequent to the conveyance (even in the case of a conspiracy) not competent against his grantee.
In an action brought to set aside a conveyance of real estate, which recited a consideration of $3,200, it appeared that the actual consideration given for the conveyance was a deed for a patent-right, which the referee found was of no value. He further found that the exchange was made “with intent to cheat and defraud, hinder and delay the creditors of William Spaulding (the grantor), and that it was with a like intent on the part of Philo B. Spaulding, the grantee.” The grantor remained in possession of the real estate, taking a lease thereof for a year from his grantee, at a rental of $125 a year; and at the expiration of one year Philo gave a lease to William’s wife, and William and his family remained in possession down to the day of the trial.
On the trial the plaintiff was permitted to prove declarations of the grantor, some made before and some made after the conveyance.
Held, that the admissions or declarations of the grantor were competent evidence, as against himself, as he was a party defendant.
That, as evidence was given which tended to establish a conspiracy to defraud the creditors, entered into between the grantor and grantee, the admissions or declarations of the grantor made before the conveyance were competent evidence as against them both.
That evidence of the grantor’s declarations, which were made subsequently to such conveyance, and also testimony given in proceedings supplementary to execution against him, subsequent to such conveyance, were incompetent as against the grantee.
That the judgment should be reversed.
Appeal by the defendants from a judgment, entered against the defendants, upon the report of a referee, in the office of the clerk of' the county of Otsego, on the 26th day of February, 1889, and from the whole and every part thereof.
This action was brought by the plaintiff to set aside a conveyance of a house and lot in Oneonta, also a vacant lot; which conveyance was executed by "William Spaulding on the 3d day of January, 1885, and recorded on the 6th day of January, 1885, and recited a consideration of $3,200. The grantee Philo B. Spaulding, gave in exchange for the conveyance, a deed of a patent-right for shears or pruning hook, for the territory of thirty-one counties in the State of Pennsylvania.
The referee has found that the deed of the patent-right territory was of no value, and that the exchange was made “ with intent to cheat and defraud, hinder and delay the creditors of William, and that it was with a like intent on the part of Philo B.” At the time of the conveyance in question the house and lot was of the value of about $3,500, and the vacant lot of the value of about $250; and the grantor had goods in the store of the value of about $1,500; and he had accounts of the value of about $2,000, and he had a horse, wagon, harness and robes, etc., of the value of $200, making the total value of his property some $7,400. His indebtedness amunted to about $2,000. On the 28th of December, 1884, William transferred to his infant son, William H. Spaulding, his horse, wagon, harness, robes, whip, etc., assuming thereby to pay a debt to his son of $200. This transfer was in the presence and with the knowledge of Philo. When the conveyance of real estate was made, Philo had notice that William was in debt. On the 16th of January, 1885, William gave a chattel mortgage to his wife for the express consideration of $2,410, covering the store and goods and all his accounts, and on the 26th of •January^ 1885, William gave his wife another chattel mortgage upon a quantity of tobacco which he had received after the execution of the first chattel mortgage; making the second chattel mortgage collateral to the first one. William remained in possession of the real estate, taking a lease thereof for a year from Philo at a rental of $125 a. year, and at the expiration of one year Philo gave a lease to William’s wife, and William and his family remained in ■the possession of the house and lot down to the day of the trial. No evidence was given tending to establish the indebtedness of William to his son or to his wife, other than appears in the transfers made to them.
Evidence was given upon the trial tending to show a fraudulent intent on the part of William at the time of the execution of the conveyance, and that Philo had knowledge of William’s indebtedness, and that William desired and intended to cover up all his property or put it beyond the reach of his creditors. Before this action was commenced the receiver offered to Philo a reconveyance of the territory covered by the assignment and demanded a conveyance of the real estate. Philo refused to receive the deed of the territory and refused to execute a conveyance of the real estate.
M. B. Williams was called as a witness for the plaintiff, and testified that he indorsed a note for William Spaulding April 1, 1884, and that he had a conversation with him at the time of that indorsement with reference to his property. He was then asked to state the conversation, which was objected to and the referee overruled the objection as to William Spaulding and sustained them as to Philo Spaulding. He stated the conversation, and he then added: “ I had a conversation with him after that; after his failure; transfer of his property; it was after it came out that he had. put his property out of his hands and before the sale of the goods in the store; it was about the last of January or first of February. Q. Tell us what occurred then? (Objected to by defendants’ counsel as incompetent, improper and immaterial, and as no evidence against P. B. Spaulding. Objection overruled. Exception by defendants’ counsel.) A. He said he had property enough to pay me; I asked him where, and he did not say where; but he said he could pay me; but he was going to beat that damned Keyes; I asked him how he could beat Keyes when I was the banker. Says J: I have got to pay if you don’t pay; well he said he, had enough to pay me, and keep still I should have my pay ; I don’t know whether I kept still or not; I presume I did not, I felt a little worked; I don’t remember anything further there; I had or heard a conversation with him at the Ballard House in Cooperstown, I think, in May, 1887, when he was there at some court. Q. Tell us what that conversation was ? ” This question was objected to by the counsel for Philo Spaulding on the grounds before stated. The objections were overruled and the defendant took an exception. . The witness answered, viz: “ It is too damned bad you are here; you have no business here,” says I, “ I know it; pay your bills and I will go out; he says, I have got property enough to do it, but I ain’t fixed just now so I can do it; he said Keyes drawed me into it; if I hadn’t went into it with Keyes I wouldn’t have went into it; I told him I didn’t know whether Keyes drawed me into it or he did; I took it he drawed me into it; you compelled me to come; he said Keyes ought to be shot, he ain’t fit to live; there ain’t a Keyes on this side of hell fit to live; I asked him the reason why, and he did not give me the reason why he was not fit. Q. What did he say about the transfer of this property, or why he transferred it ? A. He talked just as. though he owned it; he asked me what I thought his property was worth; says I, it is worth what you appraise it at, $4,000; he said yes it is worth $4,500; that was about all there was in the conversation of the property business that I know. * * * I think he said Barnes had no business to be there for he had paid him up and I think he said he had got about $1,500 or $2,000 after he paid him up out of the book accounts.”
Three other witnesses testified to similar statements made by "William Spaulding, some before and some after the transfer of the property conveyed had been made and the deed delivered and recorded, to which objections were taken by the defendant Philo Spaulding, which were overruled and exceptions taken.
William Spaulding had been examined in proceedings supplementary to execution before Charles L. Wilber," as referee. The plaintiff offered to read portions of the evidence thus taken and given by William Spaulding from the referee’s report taken on the 16th of May, 1885. Specific objections were taken by the counsel for Philo B. Spaulding. The referee made the following ruling, viz.: “ If the testimony covers declarations and transactions previous to the 1st of January, 1885, that I exclude so far as details which occurred after the time Philo Spaulding is shown to have any connection with it, that I will hear.” The plaintiff then read the following testimony, viz.: “ I have transferred my real estate to my brother Philo B. Spaulding; I transferred real estate first on the second of this last January to my brother.” * * * “ Three thousand two hundred dollars was the consideration for which this deed was given. I did not get the money for* this deed; I got territory on the Ainley patent shears ; I got a deed of some patent territory; this territory is in Pennsylvania; there was thirty-one counties embraced in this territory.”
Evidence was given on the trial tending to show that the patent-right was worthless; some twelve years of its life had run; while the evidence was contradictory in respect to the value of the invention, the finding of the referee that it was worthless is abundantly sustained by the evidence. William’s wife did not execute the deed. It was admitted by the counsel for Philo “ that he was in possession of the shears when the production of the same were demanded of him by plaintiff’s counsel in order that he might have an opportunity to cross-examine the witness in relation thereto. That the defendant’s said counsel refused to produce the same as did also the defendant.”
S. M. Lindslay, for the appellants.
MeT/oille Keyes, and James A. Lynes, for the respondent.

Opinion:
Haudin, P. J.:
Upon the evidence before the referee the question of whether or not the conveyance in question was made with intent to hinder, delay and defraud the creditors of "William Spaulding, was one of fact. (Peck v. Crouse, 46 Barb., 151; 3 R. S. [7th ed.], 2329.)
We think the evidence fully warranted the referee in the finding, as a matter of fact, that the conveyance was made with the fraudulent intent on the part of the grantor, and received by the grantee with the like fraudulent intent. (Starin v. Kelly, 88 N. Y., 418.)
We are of the opinion that the admissions or declarations of William were competent evidence against him, as he was a party defendant. He remained in the possession of the property, and although it is said that it was under a lease, yet the position of the plaintiff in attacking the conveyance is that the lease is only a part of a fraudulent contrivance to keep the property beyond the reach of William's creditors.
After the evidence was given tending to establish a conspiracy to defraud the creditors entered into by William and Philo, the admissions or declarations of William were competent evidence as against him. (Cuyler v. McCartney, 40 N. Y. 228; Loos v. Wilkinson, 110 id., 195; Waterbury v. Sturtevant, 18 Wend., 359.)
When the admissions and declarations of William were offered they were competent evidence against him, and, therefore, the court could not exclude them. (Wright v. Nostrand, 94 N. Y., 31.) Before the evidence closed there was abundant testimony for the referee to find that there was a combination and conspiracy between the grantor and grantee to hinder, delay and defraud the creditors of the grantor. The conversation held in the presence of Philo, in the Windsor Hotel, detailed by the several witnesses, was sufficient to indicate the fraudulent purposes of the grantor and grantee, and to establish a scheme to hinder, delay and defraud the creditors of the grantor. PMlo was present at the conversation, according to the testimony of the witnesses, and made no statement or declaration contrary to the avowed purpose of William in making the " deal " with Philo by transferring his real estate in exchange for patent right; he is, therefore, presumed to have acquiesced in the statements. (Cowen & Hill \n\ 191, 192.)
However, as the referee received in evidence declarations of William made after the deed, as well as testimony taken in proceedings supplementary to execution, against the objection of Philo, thus, in effect, holding they were competent evidence against Philo, we think an error was committed.
The opinion of Martin, J., considers this question in extenso, and the views expressed in his opinion must prevail. Therefore, we must reverse and order another trial.
Merwin, J., concurred.