Wilbur v. Fradenburgh , 1866 N.Y. App. Div. LEXIS 205 ( 1866 )

Scrugham, J.

It was not the object of the act of 1848, to enable a married woman to take property by gift, grant or devise, as she could do this before that act was passed; hut, on receiving it, if it was personal property, it immediately became the property of her husband, and if real estate, he took an estate in it, and was entitled to its possession.

The personal property, and his interest in the real estate, could then be taken for his debts; and the purpose of-the statute was to enable the wife to take and hold property as a feme sole, not subject to the disposal of the husband, nor liable for his debts. It enables her to take this separate estate from any person other than her husband. The object of the exception is apparent; for if it had not been made, an insolvent husband would have been enabled by the statute to place all of his property in the hands of his wife, where it would not be liable for his debts.

The act does not create any new disability. ' The wife could not before it was passed, take the property of her husband, and hold it free of the claims of his creditors existing at the time of the transfer, nor can she now. It was, however, always competent for a husband who was not at the time indebted, to make an advancement and provision for his wife. She could not take by grant directly from him, because of the marital relation and the legal fiction that husband and wife are but one person, but a conveyance could be made to a trustee for her benefit, and if made in good faith and without intent to defraud creditors, it would be upheld against subsequent creditors of the husband.

-The act of 1848, has not changed the law in this respect. The solvent husband, acting in good faith and without design to defraud his creditors, may still convey property to a trustee for the benefit of his wife. Before the act it was necessary that the trustee should continue to hold the title, as it could not vest in the wife, without subjecting the property to the control of the husband, and rendering it liable for his debts.

How, however, as a married woman may hold property as a feme sole, the trustee can safely convey to her the legal title to land of which she is the equitable owner.

The relation of trustee and cestui que trust existed between Anson B. Hoyt and Eliza Ai Eradenburgh, from the time he took the coveyance from Abram Eradenburgh until he conveyed the property to her. He held the legal title to laud of which she was the equitable owner, and his conveyance vested that title in her.

The validity of the deed from the husband is not affected by the act of 1848, but depends—as its design was confessedly to make an advancement or provision for the wife out of the husband’s property—upon the same circumstances of good faith and solvency which would be considered in testing the validity of such an advancement made before that act took effect.

No part of the debt for which the judgments were recovered, upon which this action is founded, accrued before the conveyance to Hoyt; and therefore that conveyance cannot be impeached in this action, unless it appears that it was made with fraudulent intent. Abram Fradenburgh is shown to have been indebted at that time to S. & N. B. Fitch in the sum of $2000. They were informed by him, before the transfer, of his intention to make it, and knew of it at the time it was made. He was then engaged in business, and his credit was good. The deeds to and from Hoyt were recorded on the 13th of November, 1857, within a month after their execution; and it does not appear that any concealment was practiced in respect to them, or any misrepresentation made in regard to the ownership of the property. All that Fradenburgh is shown to have owed at its date, appeared to have been paid early in 1858, and he continued his business until October, 1859, about two years after the transfer.

The money used for the purchase of the lot, and the building of the house upon it, was not taken out of his business at the time of the purchase, but it was an accumulation of small sums deposited with his wife, and set apart for this purpose at different times from 1852 to 1857, and the whole amount was accumulated about ten months before the transfer was made.

These circumstances repel any presumption of fraud arising from Fradenburgh’s indebtedness at the time of the transfer. Whether that indebtedness was sufficient in amount to afford reasonable evidence of a fraudulent intent in the transfer, could only be determined by comparing it with the amount of property, in stock, credits and otherwise, which Fradenburgh then possessed, and the plaintiffs gave no evidence upon this subject. They have,'therefore, in my judgment, failed to impeach the transfer, and I must hold that it was made in good faith, and without intent to defraud creditors.

It is not claimed that the assignment which was made by Abram Fradenburgh to the defendant Hendricks was invalid upon its face, but it is urged that it was made with intent to defraud creditors, and that this is shown by the remarks which Fradenburgh made to Hendricks when he requested him to became the assignee, and by the subsequent conduct of the parties, under the assignment. The remarks upon which the plaintiffs rely to show that the assignment was made with intent to defraud creditors, are given in the testimony of Hendricks, as follows: “He said he would like I should sign such a paper; he thought he would have to make an assignment. He would be crowded—he wanted a chance—had a good deal of debts standing out, $3400 to $5000.” These declarations are not clearly expressive of a fraudulent intent in making the assignment, but are reconcilable with a disposition to prevent his property being absorbed by a few creditors to the prejudice of the others; and upon being cross-examined as to these statements, the witness testified that Fradenburgh said he wanted to make the assignment for the benefit of his creditors; that some were pressing him, and he wanted all to have a share.

Hor is the circumstance that the assignee constituted the assignor his agent, alone sufficient to show that the assignment was made with fraudulent intent. The busi ness which the assignor had been conducting was that of furnishing and laying stone pavements, curbs, &e. in the town of Yonkers. Contracts for such work and materials, which had been made by him, had been partly performed at the time of the assignment, and completion of the work was necessary to entitle the assignee to demand payment of the contract price.

The assignee was not familiar with the business, nor an inhabitant of Yonkers, and had no acquaintance with those who were indebted to the assignor. That he should under such circumstances employ the assignor as his agent, was not improper, if he had confidence in his integrity; and as he was personally responsible for his agent’s conduct of the business, and was possessed in his own right, of a greater amount of property than the whole value of the assigned estate, no inference of fraud can fairly be drawn from that employment.

When Abram Fradenburgh purchased the lot now belonging to his wife, he agreed with his grantor, as part of the consideration of the conveyance, to pay a portion of the sum secured to Mr. Ethan Flagg by mortgage upon this and other lands. This he did, on the 3d December, 1858. The title to the property was then in his wife, and a release from the mortgage was executed to her. By the purchase of the premises and his covenant to pay this portion of the sum secured by the mortgage to Mr. Flagg he became personally liable for its payment, and might have been compelled to pay it, by action. His act in making the payment cannot therefore be considered as voluntary, or in fraud of creditors.

As the property was at the time held by his wife, subject to the mortgage, he became substituted to the rights and interest of the orginal mortgagee in the premises.

It may be questioned whether he relinquished those rights by accepting from the mortgagee a release of the land from the lien of the mortgage, which covered other lands, and was for a much larger amount than the sum paid, and whether he could lawfully do so while indebted; hu;t I do not think that I am required to pass upon those questions in this action, which is not brought to establish or enforce such rights, but to set aside the deeds to and from Hoyt, and the assignment to Hendricks, as fraudulent.

[Westchester Special Term, September 3, 1866.

The complaint should be dismissed, with costs.

Scrughmn, Justice.]