Case Name: Sheldon McCartney, Respondent, v. Etta Titsworth, Individually and as Administratrix, etc., of Josiah E. Titsworth, Deceased, Appellant, Impleaded with Sophia E. Barnhart and Others, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-01-11
Citations: 142 A.D. 292
Docket Number: 
Parties: Sheldon McCartney, Respondent, v. Etta Titsworth, Individually and as Administratrix, etc., of Josiah E. Titsworth, Deceased, Appellant, Impleaded with Sophia E. Barnhart and Others, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 142
Pages: 292–297

Head Matter:
Sheldon McCartney, Respondent, v. Etta Titsworth, Individually and as Administratrix, etc., of Josiah E. Titsworth, Deceased, Appellant, Impleaded with Sophia E. Barnhart and Others, Defendants.
Fourth Department,
January 11, 1911.
Fraud — conveyance in fraud of creditors — Statute of Frauds — husband and wife— oral ante-nuptial agreement — evidence showing fraudulent intent of grantor and grantee:,
Pending an action brought by remaindermen against a life tenant to recover damages for waste in selling timber cut from the land, the life-tenant married and, without valuable consideration, conveyed to his wife other lands owned' by him, pursuant to an alleged oral ante-nuptial agreement. The remainder-men were able to satisfy only a small part of a j udgment subsequently obtained in the action for waste and brought suit to set aside the conveyances made to the wife upon the ground that they were in fraud of creditors. Evidence examined* and held, that the grantor by his conveyances left himself practically insolvent and that the wife, knowing of his insolvency, participated in his intent to hinder, delay and defraud the remaindermen so that the conveyances should be set aside.
An oral ante-nuptial agreement is void under the Statute of Frauds, and although the promisee performs her part of the agreement by marrying the promisor, she cannot specifically enforce the agreement.
It seems, however, that conveyances made by a husband after marriage pursuant to a void parol ante nuptial contract are good as against him and his creditors in the absence of fraud.
Under the circumstances aforesaid proof of insolvency of the grantor upon making the conveyances is necessary to establish fraud, though, it seems, if he retains sufficient property to pay his debts the conveyances would be good as against creditors.
Appeal by the defendant, Etta Titsworth, individually and as administratrix, etc., from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Livingston on the 15th day of February, 1910, upon the decision of the court rendered after a trial at the Livingston Special Term,
Charles D. Newton and Edwin A. Nash, for the appellant.
Milton E. Gibbs and Fletcher C. Peck, for the respondent.

Opinion:
Williams, J.:
The judgment should he affirmed, witli costs.
The action was brought to set aside two conveyances of real property by Josiah E. Titsworth to his. wife, the defendant Etta .Titsworth, as fraudulent and void as to the creditors of the grantor, and to subject the property conveyed to the lien of a judgment against the grantor in favor of the plaintiff and the defendants other than the grantee. The grantor's first wife was Eleanor M. Titsworth. They had two daughters, Fanny McCartney and Mary E. Gilman. Both of them died before their mother. Mi's. McCartney left one child, the plaintiff Sheldon, and Mrs. Gilman left six children, Josiah A., Harry C.,. Mary E. Gilman Cole, Lucy Gilman Adams, Sophia E. Gihnan Barnhart and Fanny J. Gilman White-man. These were the only grandchildren of the grantor and his first wife. She died August 3,1901, leaving a will, whereby she gave the life use of all her property to her husband, and at his death one-half to the child of Mrs. McCartney and the other half to the children of Mrs. Gilman. The will was probated, and the husband took possession of the property. A part of it was a farm of about 360 acres in Allegany county. While in possession as life tenant the husband, by two contracts made in December, 1902, sold the timber from the farm for $2,000, and received- the money therefor, and the timber was removed under the contract. This constituted waste of the grandchildren's property. An action for such waste was commenced May 10, 1905, and June 19, 1906, á judgment was rendered in favor of the grandchildren-against the life tenant for treble damages, $9,000, and costs, amounting in all to $9,160.90, and forfeiting and terminating the life estate, and directing the premises to be forthwith surrendered to the grandchildren. Prior to the commencement of the action for waste, but after the waste had been committed, and February 4, 1905, the grantor married his second wife, the defendant Etta Titswortli. -He was then eighty-two years old and she was forty-seven years old.
. They lived together until he died, April 28, 1907, intestate. April 15, 1905, he conveyed to her the house and lot where they lived, worth $2,000, and April 25, 1905, he conveyed to her the ware- ' house property (so called), worth $5,000. These are the two conveyances sought to be set aside in this action. It was claimed that he was insolvent when he made these conveyances; that both he and his second wife were aware at the time of the claim for waste made by the grandchildren, and that these conveyances were made . for the purpose of preventing- the collection, of this claim. There was no consideration for the conveyances except an oral ante-nuptial agreement that he would convey the property to her if. she would marry him, and the conveyances were' made pursuant to such agreement. Executions were issued upon the waste judgment to Allegany and Livingston counties and returned unsatisfied, except $457.24, collected from his other property in September and Moveinber, 1906, some time before his death. This action was commenced in April, 1908, about a year after his death. The appellant, the second wife, makes two points here: First, that the ante-nuptial contract was a good consideration for the conveyancés, and, second, that the action could not be maintained because there was ho proof of insolvency at the time the conveyances were made.
First. There was evidence by three witnesses that the oral ante-nuptial agreement was made just before the marriage and the court found the fact according to their evidence. The oral agreement when made was null and void under the Statute of Frauds. (Pers. Prop. Law [Gen. Laws, chap. 47; Laws of 1897, chap. 417], § 21, subd. 3.) After the marriage had taken place, tlie wife could not have enforced the specific performance of the agreement, on the ground that she had performed her part of the agreement. (Hunt v. Hunt, 171 N. Y. 396, and cases therein.cited.)
. It may be that the conveyances when made were valid as against the grantor, and as against creditors, in the absence of fraud. (Lloyd v. Fulton, 91 U. S. 479.)
, Put in this case no claim is made in favor of the grantor. The attack is made by creditors, the grandchildren. Their debt existed at the time the conveyances were made, at the time of the marriage; and at the time the oral ante-nuptial agreement was made. The debt ripened into a judgment before this action was commenced. The court has found fraud upon the part of the grantor and knowledge of the fraud on the part of the grantee. The important question is whether the evidence supports these findings. The criticism of appellant is mainly directed to the claim that there was no proof of insolvency of the grantor and without such proof fraud could not be established.
Second. I think it must be conceded that insolvency was necessary to establish fraud in this case. If at all times down to the making of the conveyances the grantor was solvent, and after they were given he retained still sufficient property to pay his debts, then these creditors had and have no reason to complain. I think, however, there is abundant evidence to establish the fact of insolvency, even back to the time the ante-nuptial agreement was made. The executions were returned substantially unsatisfiéd in December, 1906, one year and a half after the conveyances were given, and two years or so after the ante-nuptial agreement was made and the marriage took place. This was strong evidence of the grantor's insolvency at that time. It did not necessarily show insolvency two years and a half or three years before. The grantee, however, was well acquainted with his business and his property during these two or three years. She handled all the money and received all the income and paid all the bibs and debts. She was examined in supplementary proceedings in December, 1906, about the time of the return of the executions, and again on the trial of this action in October, 1909, two years or more after his death. It was conceded on the trial that the grantor had no property except in Livingston and Allegany counties, to which the executions were issued. The grantee testified in great detail about .the grantor's property and the money, received and.- how it was disposed of. Among other tilings- she said he was awfully in -debt when they were married and that he seemed to owe every one; that there was one judgment against him, and she paid up-things as fast as she could. The effort was to discover any property he had and what had béen done with it since the marriage. That she knew all about these mattérs can • hardly be doubted, and all the information obtainable from her was ' drawn out- by. examining counsel. I do not see how it can be claimed, in view of her evidence, that the grantor at the time of his marriage or at the time of the giving of the conveyances had sufficient property to pay his debts, including the claim for waste made by the grandchildren. lie. appears, in fact to .have had little property left after conveying .the property to his wife. He was so pressed for money that he drew money belonging to the grandchildren from the bank and used it for the purposes of his litigations with them. Based upon her evidence in supplementary. proceedings this action was prosecuted and the evidence was read oh the, trial. She was sworn • also . on the trial and made no denial of the evidence already given'by her. She did not'attempt to testify that her husband had any other property.than that she had disclosed on her former examination or that he was at any time solvent after the' marriage regarding the. grandchildren's claim as a debt owing by him. So- that the transfers of the property to the wife were evidently made .with the knowledge by both parties of the grandchildren's claim and that substantially all his property was thus disposed of and little left with which to pay such claim and debt. He could hot be compelled by her to convey the property, and his doing so was, therefore, voluntary; and if the intent,of the grantor, to the knowledge of the grantee, was to hinder, delay and defraud the grandchildren, then the conveyances were void. The court found that by the conveyances substantially all'the grantor's property was transferred to the wife and he thereby became insolvent; that' both of them knew of the grandchildren's debt, "and, therefore, the conveyances were void. These findings, I think, were abundantly sustained by the evidence."
Upon the whole case I conclude the judgment was legal and just and should .be sustained.
All concurred,
Judgment and order affii'ined, with costs.