Court Opinion

ID: 5181266
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:42:28.146296+00
Date Added: 2024-06-11T08:26:34.817084
License: Public Domain

Van Brunt, P. J. (dissenting):
This action was brought to foreclose a mortgage of $4,000 upon certain real property upon the westerly side of Third avenue, between One Hundred and Sixty-second and One Hundred and Sixty-third streets in the city of New York. The plot covered by the mortgage had a frontage of one hundred and nine feet on the westerly side of Third avenue ; of this frontage the most northerly *255twelve feet was owned by the infant defendant Lisette Georgi, in which twelve feet her mother, the defendant Emma Georgi, had a vested dower interest. The adjoining twenty-five feet had been conveyed to the appellant by deed, dated June 24, 1889, executed by her husband, the defendant Otto H. Georgi, and recorded November 27, 1889; and the remaining seventy-two feet of said frontage had been conveyed to appellant by her said husband by deed dated July 16, 1890, and recorded January 6, 1891.
Various parties were made defendants as judgment creditors of said Otto II. Georgi, many of whose judgments were entered prior to the 6th of January, 1891, the date of the record of the deed last above mentioned, but subsequent to the date of the deed, July 16, 1890. The defendant Sarah F. Georgi by her answer claimed ownership of the land conveyed to her by her husband, stating an alleged consideration for the conveyance, dated July 16, 1890, and asking affirmative relief against her co-defendants that her title thereto be judicially established against all claims of her co-defendants, and also asking that the mortgage debt be apportioned as between the several owners of the mortgaged property, and that she be allowed to redeem upon payment pro rata of the mortgage debt. This answer was served upon all of her co-defendants as well as upon the plaintiff, and the court ordered a reference to hear and determine all the issues arising in the action. Answers were put in by some of the other defendants, but were not served upon any of the co-defendants.
The action being tried before a referee, the referee found that the conveyance, of the first parcel mentioned, by Otto H. Georgi to his wife, Sarah F. Georgi, was valid as against the creditors of Georgi, but that the conveyance second above mentioned was made and received with intent to hinder, delay and defraud the creditors of Otto H. Georgi, and was fraudulent as against them.
The referee further reported that the portion of the premises conveyed to Sarah F. Georgi, by deed dated July 16, 1890, should be first sold under the judgment of foreclosure and sale to pay the plaintiff’s debt and the claims of the judgment creditors of Otto H. Georgi; and that if the amount realized upon the sale of this pancel was insufficient to pay the amount of the mortgage debt then that the second parcel conveyed under date of June 24,1889, should *256be sold, and that if the sale of the two parcels should not produce sufficient to pay the mortgage debt of the plaintiff, with interest, then that the portion belonging to the defendant Lisette Georgi should be sold; and that if the sale of the three parcels should not be sufficient, then that the balance of the mortgaged premises should be sold.
A decree was entered directing a sale of certain of the premises and adjudging the conveyance of the premises described in the deed of the 16th of July, 1896, to be fraudulent and void as against the creditors of Otto II. Georgi, and from so much of the judgment as determines that the lands conveyed to the appellant are primarily liable for the payment of the mortgage debt, without contribution by the owners of the other mortgaged premises, and from that part of the judgment which adjudges that the deed of July 16, 1890, from Otto II. Georgi to the appellant, was made with fraudulent intent, this appeal is taken.
The appellant’s counsel, neither upon the argument nor in his brief, points out any ground upon which he claims that the determination of the judgment that the lands conveyed to the appellant are primarily liable in payment of the entire mortgage debt, is erroneous ; and as the principle of the inverse order of alienation has been applied, which is well recognized, there seems to be no ground for interference with the decree in this respect.
He, however, insists that the evidence before the referee did not justify him in coming to the conclusion that the deed of July 16, 1890, was fraudulent and void as against the creditors of Georgi; that a full and adequate consideration was paid by Mrs. Georgi for the premises in question, and that die mere fact that the deed was not recorded until after the entry of the judgments did not justify any conclusion that it was fraudulently withheld from the record.
In respect to the question of consideration, that depends entirely upon the question as to how much of an incumbrance the mortgage of $25,000 given to secure the surety of Otto II. Georgi upon his contract could be considered to be. As it turned out, nothing whatever became due upon this mortgage, and premises, which the evidence shows were worth about $25,000, were conveyed to Mrs. Georgi for less than one-half their value.
It is true that this mortgage was outstanding, but the liability *257upon it had not been liquidated. It was not certain that there would be any liability upon it at all; it was not expected that there would be, and there seems to have been an inadequacy of consideration.
That this conveyance was made by Otto H. Georgi, for the purpose of placing this property out of the reach of his creditors, cannot be disputed upon the evidence, and the only question is whether his wife is to be considered a bona fide purchaser for a valuable consideration.
The evidence in regard to the execution of this deed seems to justify the conclusion of the referee, that it was not acknowledged until early in December, instead of on the sixteenth of July, as the certificate states, or in August, as claimed by the defendant Otto H. Georgi. The circumstances testified to by the witness Murphy and the witness Mohr, and the reasons given by the witness Murphy for being positive that it was certainly after September, show clearly that there is good foundation for the contention that this conveyance was executed in view of the judgments which were about being obtained against the grantor Georgi. It appears that, on the twenty-ninth of ¡November, the indemnity mortgage of $25,000 was gotten out of the way, and that a short time thereafter the conveyance was made, executed and delivered.
It is undoubtedly true that the action of Murphy, the commissioner of deeds, in certifying that this mortgage was acknowledged in July, when the acknowledgment was taken in December, shows a gross violation of his duty and the commission of an offense against the law, and naturally causes a court of justice to look at his testimony with considerable suspicion. But when the testimony of a witness of this character bears internal evidence of verity it must be received, though not corroborated. But in the case at bar it seems to be singularly well corroborated by the evidence of the -witness Mohr.
The excuse given by Mrs. Georgi for her failure to record this deed for six months after its execution, that she had not the money to-pay for the recording of the same, and that she only had it recorded when she found that judgments were being entered against her husband, does not seem worthy of credence. The deed was given to her as an afterthought, in view of the embarrassed circumstances *258in which her husband found himself after the settlement of November 29, 1890, and not in pursuance of any agreement made at the time the $6,000 loan was made. It is true that the deed might have been given in payment of that debt. But it would not make Mrs. Georgi a bona fide holder for a valuable consideration, because it is well settled that that means a present consideration.
Under all the circumstances of the case we see no reason for interfering with the conclusion of the referee in respect to this matter, and are of opinion that the judgment should be affirmed, with costs as against the appellant.
Rtjmsey, J., concurred.
Judgment reversed and rehearing ordered, with costs to appellant to abide the event, unless the respondents, the receiver and judgment creditors of Otto H. Georgi, stipulate to modify the judgment as stated in opinion; in case this stipulation is given within ten days judgment as thus modified affirmed, with costs to the parties represented upon this appeal, payable out of the property.