Case Name: Frank M. Hickok, as Receiver of the Personal Property of Frank H. Cowperthwait, Respondent, v. Frank H. Cowperthwait and Others, Appellants, Impleaded with Brooklyn Chair Company and Brooklyn Factory and Power Company (Limited), Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-11-17
Citations: 147 A.D. 121
Docket Number: 
Parties: Frank M. Hickok, as Receiver of the Personal Property of Frank H. Cowperthwait, Respondent, v. Frank H. Cowperthwait and Others, Appellants, Impleaded with Brooklyn Chair Company and Brooklyn Factory and Power Company (Limited), Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 147
Pages: 121–133

Head Matter:
Frank M. Hickok, as Receiver of the Personal Property of Frank H. Cowperthwait, Respondent, v. Frank H. Cowperthwait and Others, Appellants, Impleaded with Brooklyn Chair Company and Brooklyn Factory and Power Company (Limited), Defendants.
Second Department,
November 17, 1911.
Debtor and creditor — transfer in fraud of creditors — conflicting evidence at successive trials—when assignee under burden of showing innocence.
Where a defendant in a suit brought to set aside a transfer of property-alleged to have been made in fraud of creditors gave one explanation of ' .the transfer in supplementary proceedings, abandoned the same at trial as palpably false and gave another explanation, and upon a second trial attempted 'to make a third explanation of the transfer, his evidence is entitled to little credence.
Where the fraudulent purpose of the transferor is clearly established by competent evidence, the transferee who parted with no consideration is under the burden of showing innocence of purpose upon his part.
The mere existence' of an antecedent debt "is not sufficient to establish an innocent purpose on the part of the transferee.
Thomas and Carr, JJ., dissented, with'opinion.
Appeal by the defendants, Frank H. Cowperthwait and others, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 20th day of July, 1910, upon the decision of the court rendered after a trial ‘at the Kings County Special Term.
Hector W. Thomas [Lewis Squires with him on the brief], for the appellant Frederick S. Cowperthwait, trustee.
W. H. Van Benschoten [John J. Halpin with him on the brief], for the appellant Aymar.
Samuel Evans Maires, for the respondent.

Opinion:
Burr, J.:
The fraudulent character of the transactions condemned by the judgment under review was considered by this court, so far as Frank H. Cowperthwait, the judgment debtor, is concerned, on the appeal from a judgment dismissing the complaint. (Hickok v. Cowperthwait, 134 App. Div. 617.) The opinion then delivered, concurred in by the entire court, discussed the evidence presented in that record. So far as the judgment is concerned the evidence is not substantially different, except. that the fraud of Frank H. Cowperthwait is , more clearly demonstrated by the fact that upon this trial an attempt was made to give a third explanation of the purposes of the transfer. As was pointed out in the opinion when the case was here before, when- examined in supplementary proceedings he gave one explanation of the transfer; upon the trial he abandoned that as palpably false and untenable, and attempted a second, inconsistent with it, hut equally unsatisfactory; upon this trial a third attempted explanation is made. As pointed out by Mr. Justice Clark in his opinion, such attempts by new evidence and new theories to meet the difficulties of the case, as indicated in the opinion previously given, are entitled to little credence and merit severe condemnation. The fraudulent jrarpose of Frank H. Cowperthwait being clearly established by evidence entirely competent as against him, the burden of proof then devolved upon the other defendants to show an innocent purpose upon their part. This burden has not been,met. As pointed out in the previous opinion, the mere existence of an antecedent debt is not sufficient to establish an innocent purpose on the part of the grantee, when fraudulent intent upon the part of the grantor is shown. On , the contrary, the very fact that such a debt existed may furnish a pretext to the grantees to unite with the grantor in a fraudulent purpose to put his property in a position, not where the antecedent creditors may he secured, but where the judgment debtor may continue to use the property for his own purpose, as manifestly he did in this case. The position of the defendants Aymar in this case is not helped by the evidence upon this trial, and for the reasons stated by Mr. Justice Jenks in his opinion on the Aymar Appeal— Hickok v. Cowperthwait (137 App. Div. 94), it is impossible to close one's eyes to the fact that these persons were entirely ready to unite with Frank H. Cowperthwait, the judgment debtor, in putting his property in such a shape that he could continue to use it, possibly to some extent for their benefit, but primarily for his own, freed from any claims of his judgment creditors.
I recommend that the judgment appealed from be affirmed, hut in view of the full discussion in the two opinions above referred to, it seems to me that further discussion is unnecessary.
Jenks, P. J., and Rich, J., concurred; Thomas, J., read for reversal, with whom Carr, J., concurred.