Case Name: Francis M. Carpenter and James H. Pettengill, Plaintiffs, v. Mathilda M. C. Adickes et al., Defendants
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1901-04
Citations: 34 Misc. 645
Docket Number: 
Parties: Francis M. Carpenter and James H. Pettengill, Plaintiffs, v. Mathilda M. C. Adickes et al., Defendants.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 34
Pages: 645–648

Head Matter:
Francis M. Carpenter and James H. Pettengill, Plaintiffs, v. Mathilda M. C. Adickes et al., Defendants.
(Supreme Court, New York Special Term,
April, 1901.)
Creditors’ action to set aside fraudulent transfers — Demurrer to complaint.
A judgment-creditors’ complaint which alleges that their judgment-debtor, the principal defendant, rendered herself insolvent, at a time when she was indebted to them on their unmatured promissory notes in bank, by transferring all her property and business to the other defendants, her children, upon considerations either nominal or for wages alleged to have been earned of her, or for money alleged to have been lent her by them, that she thereafter continued her business in the same manner for a time, and thereby induced the plaintiffs, who did not know of the transfers, to take further notes, remaining unpaid and the basis in part of the judgment, that the transfers were intended to hinder, delay and defraud creditors, that the defendants have conspired fraudulently to prevent the plaintiffs from their lawful rights, and that the transferees hold the property of their mother as trustees for her creditors, is not demurrable as failing to state facts constituting a cause of action, as, upon the facts and allegations, the transaction in question must be deemed presumptively fraudulent, and to be sufficiently alleged as intended to defraud the plaintiffs.
Action by the plaintiffs as judgment creditors to have certain transfers of personal and real property made by defendant Adickes to her children, the codefendants, adjudged fraudulent, and null and void as against her creditors. Demurrer to complaint.
The facts sufficiently, appear in the opinion of the court.
Charles M. Parsons, for plaintiffs.
Straley, Hasbrouck & Schloeder, for defendants.

Opinion:
Lawrence, J.
The action is'brought by the plaintiffs as judgment creditors of the defendant, Mathilda M. C. Adickes, upon whose judgment an execution has been issued and returned unsatisfied, to have certain transfers of personal and real property made by said defendant to her children, -the codefendants, adjudged fraudulent and null and void as against her creditors; and a demurrer has been interposed by all the defendants upon the ground that the complaint does not state facts sufficient to constitute a cause of action. It is well settled that " A demurrer upon the ground that the complaint does not state a cause of action, can be sustained only when it appears that, after admitting all the facts alleged or that can, by reasonable and fair intendment, be implied from them, the complaint fails to state a cause of action." Coatsworth v. Lehigh Valley R. Co., 156 N. Y. 451; Sage v. Culver, 147 id. 241. Tested by this rule, I think the demurrer in this case is not well taken. The complaint alleges, that the defendant Eredericka R. Adickes for many years prior to 1898 owned and conducted a coal and wood business at No. 18 Seventh avenue and No. 43 Perry street, New York city, borough of Manhattan; that on or about the 26th day of September, 1900, the plaintiffs duly recovered judgment in the Supreme Court by default, for the sum of $2,157.10; that said judgment was duly docketed in the county of New York, and execution duly issued thereon to the sheriff, and that said execution was returned wholly unsatisfied, and that there is now due and owing the plaintiffs thereon the aforesaid sum, with interest from said day; that said Eredericka R. Adickes is the mother of the other defendants, and prior to the 12th of October, 1898, said Eredericka carried on the aforesaid coal and wood business under the firm name and style of Eredericka R. Adickes; that on the 3d of October, 1898, she sold, assigned and transferred the said business, and all its appurtenances, to Eibe H. Adickes for the sum of $1,200, to Edward J. O. Adickes for the sum of $600, to Frederick J. Adickes for the sum of $400, it being alleged that the consideration for said transfers was wages earned and money loaned by said assignees to the assignor; that on the 3d day of October, 1898, the defendant Eredericka assigned and transferred all her real property described in the complaint to her two daughters, Mathilda and Annie, for a nominal consideration; that the property was mortgaged in two mortgages for $8,000, which mortgages were canceled on the 25th day of November, 1899, and a new one issued on the same day for $9,000 in favor of Alfred P. Mayo, and remains thereon at present; that at and prior to the time of said transfer, and since, and at the time of the commencement of this action, the defendant Eredericka E. Adickes was wholly insolvent, and, with intent to delay, hinder and defraud her creditors, transferred the aforesaid business and real estate to the other defendants, and that they conspired to fraudulently prevent the plaintiffs from their lawful rights; that prior to the time of said transfers and up to the 19th day of December, 1898, said defendant Eredericka, through her attorney in fact, Mathilda M. 0. Adickes, made notes payable to plaintiffs' order amounting to $1,000, and on the day of said transfer two notes of Eredericka B. Adickes, aggregating $951.62, were in plaintiffs' bank awaiting maturity; that after said transfers the said Eredericka E. Adickes continued to transact her said business in like manner and in like intent by soliciting and urging, both in person and through her attorney in fact and by letters, to make notes to the order of these plaintiffs, and made them believe that she was still the lawful owner and holder of the premises and business aforesaid, and in consequence thereof the plaintiffs accepted two notes to their order aggregating $897.64, dated October 27, 1898, and December 19, 1898; that plaintiffs did not know of above transfers until the 21st day of December, 1898, and thereupon refused to have any further dealings "with the defendant Eredericka; that on or about the 21st day of December, 1898, the name and style of said coal and wood business was changed to the name of Eibe H. Adickes, and the same appears on their wagons and remains thereon at present ; that the property so transferred comprises all the property of Eredericka E. Adickes applicable to the payment of her debts, and said transfers leave her insolvent; that the dates set forth in the complaint as to the times of filing said transfers were taken from the records of the register's office of the county of Mew York; that said property is now held by the said transferees as trustees for the benefit of creditors of said Eredericka E. Adickes, etc. It was held in the case of Coatsworth v. Lehigh Valley R. Co., supra, that " averments which sufficiently point out the pleader's dalma are sufficient, if under them he would be entitled to give the necessary evidence to establish his cause of action." It seems to me that under this complaint the plaintiffs may be said to have alleged that the transfers in question were made with intent to defraud the creditors of the said Eredericka Adickes, and among them the plaintiffs, and that, as it is alleged that by making such transfers, at the time she was insolvent, she stripped herself of all her property, while notes in the sum of $1,000 were outstanding against her, the transaction must be deemed presumptively fraudulent. First National Bank v. Miller, 163 N. Y. 164; Smith v. Reid, 134 id. 568. I have not overlooked the case of Wood v. Amory, 105 N. Y. 278, which is much relied on by the plaintiffs' counsel, nor other cases which support the general proposition that mere general allegations of fraud or conspiracy are of no value as stating a cause of action. In that case the action was brought for a conspiracy and it was held that "No legal duty rests upon a party to an action, in whose favor a judgment has been rendered therein, to disclose a mistake made in his favor to his opponent; and an agreement between him and an assignee of the judgment to keep silent as to the mistake, is not actionable fraud, and that such an agreement is not made illegal by an averment, in an action for alleged fraud that it was made pursuant to conspiracy and collusion between the parties." That was a very different case from this. This is a case in which a transfer is made by a mother in insolvent circumstances to her children, and it is alleged, either directly or impliedly, under the decisions of the Court of Appeals above mentioned, that the transfer was made with intent to hinder, delay and defraud the creditors of the mother, and, among others, the plaintiffs. The action is not one for conspiracy. The case of Cohn v. Goldman, 76 N. Y. 284, was also a case of conspiracy in which no facts were alleged and the complaint simply stated that " the defendants, in concert, did by connivance, conspiracy and combination, cheat and defraud the plaintiff out of certain goods of a value specified," and it was there held that the complaint did not state facts sufficient to constitute a cause of action. I do not think the case is any authority for holding" the complaint in this case as insufficient. For these reasons, I am of the opinion that the' plaintiffs are entitled to an interlocutory judgment overruling the demurrer, with costs, with leave to the defendants to answer upon payment of costs.
Demurrer overruled, with costs, with leave to defendants to answer upon payment of costs*