Court Opinion

ID: 5183304
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:45:06.267798+00
Date Added: 2024-06-11T08:26:38.973384
License: Public Domain

Goodrich, P. J.
(dissenting) :
The action is brought to set aside the conveyance of a house and land at Rockaway, made in 1889, by Harris Cohen to Jacob Cohen, who afterwards became his son-in-law. The plaintiffs claim that the deed was the result of a fraudulent conspiracy between the two Cohens, and was executed by Harris Cohen when he was insolvent, without any valuable consideration paid by Jacob Cohen, for the mere purpose of hindering, delaying and defrauding the creditors of Harris and as a part of a scheme and device to defraud his creditors, in which fraud Jacob participated and of which he had full knowledge. I assume that the testimony clearly shows a fraudulent intent on the part of Harris to hinder, delay and defraud his creditors; but a fraudulent intent on the part of Jacob, or some active partidpation by him in the alleged conspiracy, or, at least, notice which would compel his inquiry, is equally requisite with a fraudulent intent on the part of Harris. Both must co-exist to sustain an action of this character. A failing debtor, in pursuance of a positive intention to cheat his creditors, may dispose of his property for a valuable consideration, where the consideration approximates the fair value of the property, to a stranger to his intention who has no knowledge or notice of the fraudulent intent, and such transfer will be sustained. Any other doctrine would be fatal to the rights of innocent purchasers. Such is the unquestioned doctrine of the authorities.. (Laidlaw v. Gilmore, 56 N. Y. 621; Zoeller v. Riley, 100 id. 102.)
It is true that the payment of a fair consideration upon a sale of property is not conclusive evidence of the good faith of the purchaser, but it affords strong evidence thereof and requires clear proof of á fraudulent intent on the part of the vendee in order to overcome the presumption of honest motives. (Starin v. Kelly, 88 N. Y. 418; Billings v. Russell, 101 id. 226; Nugent v. Jacobs, 103 id. 125.)
*102With these principles in view, the learned justice at Special Term, whq had before him the parties to the alleged fraudulent transaction, after' a patient and painstaking hearing, with the benefit of the “ personal equation ” involved in the appearance of' the witnesses, and their manner of giving evidence,. and the testimony as to the character of the principal and uncorroborated witness for the plaintiffs, who cheerfully and willingly testified as to his participation in a fraudulent conspiracy with Harris Cbhen to cheat his creditors,came to the conclusion that Jacob Cohen was not participant in any conspiracy or fraud; that he had no notice of any fraudulent intent-on the part of Harris, and that he paid full value for the property.. It is no part of our duty to disagree with these findings unless the-testimony was inadequate to support the decision of the learned-justice, and I cannot fail, after an elaborate examination of the evidence, to concur in his judgment. ' .
It ■ makes no difference that the parties are closely related; the reasons and circumstances detailed by Jacob seem to afford an adequate reason for his purchase. Neither is it important that a- part, of the consideration, some $3,500, was for an antecedent indebtedness of Harris to Jacob. There is no evidence impeaching the existence of this indebtedness, and the, balance of the purchase money was paid in a check which was received by Harris, deposited in his bank and paid by the bank on which it was drawn. That Jacob has permitted his father-in-law and family to occupy the house under lease might be considered a significant fact if the evidence did not- also disclose the manifold difficulties which seem to-, have arisen between them as to the collection of the rent, and tliat on more than one occasion Jacob was compelled to pay money for the wrongful acts or neglect- of his father-in-law, once in payment of interest on the mortgage, which resulted in a suit for foreclosure. I think the learned justice at Special Term -came to a correct conclusion upon all the evidence, and that his. finding of the facts-should not be disturbed.
There is one exception, however, which requires mention. Harris, on cross-examination, had been questioned by the plaintiffs’ counsel as to the payment by him of a sum of money to a firm of attorneys, which was bringing what was claimed to be a collusive suit by one of his creditors- against him and at his own instigation, *103for the purpose of seizing his stock in trade and preventing it from coming into the hands of other creditors. He had either denied it or had been unwilling to answer fairly the questions designed to prove the fact, and the plaintiffs’ counsel offered in evidence a paper signed by him in which he had authorized the payment. The admission of this paper might have strengthened the proof of Harris’ fraud, but that'fraud I have assumed to be proven, and I cannot see how it could affect Jacob, who was not a party to the incident and who was not in any way connected with it. There was no offer to connect Jacob Cohen with the transaction, and, although it would have afforded proof of contemporaneous fraud on the part of Harris, it would not, under my view of Jacob’s position, have affected him. It was a transaction between Harris and his co-conspirator, and cannot affect Jacob, even though it may be proof of the fraudulent intent of Harris, so that the result of the trial was not affected thereby, for there is the broad gulf between the plaintiffs’ claim and the defendant Jacob still unbridged by the evidence, as the court has found that Jacob was not a participant in any fraud.
There are no other exceptions which affect the result, and I think the judgment should be affirmed.
Bradley, J., concurred.
Judgment reversed and new trial granted, with costs to abide the final award of costs.