Court Opinion

ID: 3624597
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:05:31.05642+00
Date Added: 2024-06-11T11:53:08.571532
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 75 
It is objected by the appellants that the judgment in this case was erroneous in directing a sale by a receiver; and that the proper course, if the conveyances to Mrs. Crawford were to be set aside, was to have the plaintiff to sell on execution against Crawford, on his original judgment.
This objection cannot be sustained. The court has power to order a transfer to a receiver in such cases. (Chatauque CountyBank v. Risley, 19 N.Y., 369.) The practice, as laid down in that case, permits the court to make an order that the judgment debtor should convey to the receiver. That course was not pursued in the present instance, the judgment simply directing that the receiver should sell, execute deeds, etc. If this direction was erroneous, we are of opinion that the error is not to be rectified by an appeal from the judgment, but a motion should have been made to correct the judgment, the matter being one merely of detail, and not affecting the decision of the cause upon its merits.
It is also claimed that there was no intent on Crawford's part to defraud his creditors, and that the findings of the judge upon this subject were not sustained by the evidence. It was not necessary that there should be any actual fraudulent intent. (Mohawk Bank v. Atwater, 2 Paige, 54.) The requisite intent may be inferred from the circumstances of the case. The evidence showed that Crawford was indebted, when he made his conveyance to Mr. Glassey and through him to Mrs. Crawford, to an amount largely beyond his remaining property, or, in other words, after deducting the *Page 78 
amount conveyed, he had by no means sufficient property to pay the plaintiff. It will be said that he was in prosperous business, and might soon have acquired the necessary means. This suggestion is not to the purpose. The true inquiry is: Had he, at the time the alleged fraudulent conveyance was made, sufficient means to pay his debts? It was at one time the rule that a voluntary conveyance by one indebted at the time was fraudulent, as a matter of law, towards his creditors. No evidence was allowed to rebut the presumption of fraud. (Reade v.Livingston, 3 J. Ch., 481.) This rule was subsequently deemed to be too severe by the courts, and the less stringent rule was adopted, that while a conveyance by a person indebted was presumptively or prima facie fraudulent, the presumption might be rebutted by proof to the contrary. (Seward v. Jackson, 8 Cow., 406.) This presumption, however, is not to be overthrown by mere evidence of good intent or generous impulses or feelings. It must be overcome by circumstances showing on their face that there could have been no bad intent, such as that the gift was a reasonable provision, and that the debtor still retained sufficient means to pay his debts. He can no more delay his creditors by such voluntary conveyance than he can actually defraud them. (Carpenter v. Roe, 10 N.Y., 230; Babcock v.Eckler, 24 id., 623; Dygert v. Remerschnider, 32 id., 648;Curtis v. Fox, 47 id., 300.)
The judge found, as a fact, that the conveyance was made for securing certain parcels of land to the wife, and saving the same from the claims of all parties whomsoever, and also for the purpose of hindering, delaying and defrauding creditors. There was evidence to sustain this finding, and it cannot be disturbed here.
It was, however, urged, on the argument, that conceding the correctness of these views, in general, the conveyance was not fraudulent as to the plaintiff. This was maintained on the ground that the transfer to Mrs. Crawford was no secret. The plaintiff knew that it was to be made — knew that it was made and raised no objection. It is therefore insisted that he *Page 79 
was privy to the transfer, assenting to it, and forever estopped from questioning it as fraudulent.
This claim, I think, is without force. Though the plaintiff knew of the transfer, there is not a particle of evidence that he knew that the defendant Crawford was depriving himself of the means of paying his debts. The presumption was the other way. They were intimate friends. It was undisputed that the plaintiff had the greatest confidence in Crawford. The very openness of the transaction would naturally tend to disarm all suspicion. Could it be that a trusted friend would make such a transfer openly, and yet design to defraud him? Such would not be the ordinary supposition. Moreover, the plaintiff might well think that he had his legal rights. Mr. and Mrs. Crawford were bound to know the law and to be aware that they could not defraud the plaintiff. He was no assenting party so as to create an estoppel, certainly so long as he did not know the true state of Crawford's affairs, and the fact that he was defrauding himself of his estate so as to be unable to pay his debts. It is not necessary to inquire whether he would have been estopped had he known all the facts. As matters stood, he certainly was not. It would be dangerous, as well as unreasonable, to extend the doctrine of estoppel to such a case as the present.
The plaintiff has in no respect forfeited or compromised his right to proceed against the property of Crawford in the hands of the heirs of Mrs. Crawford, in order to reimburse himself for his claims as creditor.
There was some suggestion that there was collusion between the plaintiff and Crawford in bringing this action; such collusion was not found as a fact, and we cannot assume its existence.
There were some exceptions to the exclusion of evidence, which we do not deem it necessary to notice specially. The rulings of the judge were correct.
The judgment should be affirmed.