Case Name: Edwin D. Webb, as Trustee in Bankruptcy of Mary Feller, Respondent, v. Louis Manheim, Appellant, Impleaded with Others
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905-11
Citations: 109 A.D. 63
Docket Number: 
Parties: Edwin D. Webb, as Trustee in Bankruptcy of Mary Feller, Respondent, v. Louis Manheim, Appellant, Impleaded with Others.
Judges: 
Reporter: Appellate Division Reports
Volume: 109
Pages: 63–65

Head Matter:
Edwin D. Webb, as Trustee in Bankruptcy of Mary Feller, Respondent, v. Louis Manheim, Appellant, Impleaded with Others.
First Department,
November, 1905.
Fraudulent conveyance — when receiver of rents pendente lite should not be appointed.
A receiver of the rents and profits of real estate should not be appointed in an action by a trustee in bankruptcy to set aside the conveyance thereof by the bankrupt as in fraud of creditors, when the, only prima facie evidence of fraud is that the purchaser, who has paid full value, was the lawyer of the bankrupt’s-husband who held her power of attorney, and the purchaser shows that he is financially able to respond to a judgment for - the value of said rents and profits.
The lis pendens filed protects against a transfer of title by said purchaser. ■
Appeal by the defendant, Louis Manheim, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 18th day of July, 1905.
Benjamin W. Cardozo, for the appellant.
Addison S. Pratt, for the respondent.

Opinion:
Patterson, J.:
This appeal is from an order appointing a receiver of rents and profits of real estate pending suit. The plaintiff was appointed trustee in bankruptcy of Mary Feller in May, 1905. In September, 1904, Mary Feller conveyed to Louis Manheim several parcels of real estate at Second avenue and East Fourteenth street in the city of Hew York. The trustee in bankruptcy brings this action to set aside and annul these conveyances on the ground that they were made to secure an antecedent indebtedness of the grantor to the grantee and also with intent to hinder, delay and defraud creditors. A notice of. Us pendens was filed. Affidavits were submitted in support of the motion to appoint the receiver,'in reply to which the defendant Manheim says that in the early part of September, 19.04, the property was offered to him'for sale for $210,000 ; that he went to see it, went over it, examined the leases and the rentals and made an offer of- $200,000' for it, and that after two weeks' negotiations he agreed to bay it. for' $203,000, subject to a first mortgage on one of the houses of $82,00.0, and on another of $56,000, and a general mortgage of $52,000, which left an equity of $13,000 to be paid for in cash; that he bought the property, paid the full purchase price of $13,000 over and above the -mortgage, with the exception of $400, retained to cover the adjustment of rents. His affidavit also shows that the price paid by him of $203,000 was the full value; that taxes amounting to $1,800 were to become due within a few weeks and that the purchase price was virtually $214,800, and that the value of the premises was impaired by-a restriction. . The defendant also shows that he is a man of responsibility and that if the plaintiff succeeds in setting aside the transfer of the property to him,, 'he is abundantly able to account for all the rents he has received while the property has been in-his possession.
In looking through the record, we are not satisfied that sufficient prima facie evidence has been adduced of the fraudulent character of these transfers to authorize ihe appointment of a receiver. It does appear that Louis Manheim was a lawyer and that for about a year and a half he was the attorney for the husband of Mrs. Feller; that Mr. Feller had a power of attorney from his wife and conducted business in her name, but these.bare facts are not sufficient to show that the transaction, by Avhich Manheim took title to this-property was in fraud of creditors, or that there was an agreement by which he was to hold the property in trust for the bankrupt or her husband. It would appear that Manheim paid full value for the property. That fact is not necessarily inconsistent with the existence of an intent to defraud, but here such an intent is not to be inferred from what is contained in the affidavits presented. There is no sufficient reason shown why this property should be taken out of the hands of the grantee who apparently paid full value therefor and the rents sequestrated. There is a lis pendens on file which would affect a transfer of the title from Manheim, and it is shown that he is abundantly able to respond to any judgment that probably may be recovered against him for the rents received by him. This is not a case in which presumptions of fraud are to be indulged, and the order should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
O'Brien, P. J., Ingraham, McLaughlin and Laughlin, JJ., concurred.
Order reversed, with tern dollars costs and disbursements, and motion denied, with ten dollars costs.