Laidlaw v. Gilmore

Loew, J.

This action was brought on the equity side of the court, for the purpose of having a conveyance of a house and lot of land, in West Fifty-second street, in this city, adjudged fraudulent and void, as against the plaintiffs, who are judgment creditors of the defendant, Gilmore.

Although the judgment against Gilmore was not recovered until nearly three months after he had conveyed the premises in question to his brother-in-law, the defendant, Kissick, yet the indebtedness accrued previous to the time when the transfer was made.

The judge, before whom this cause was tried, has found, as matter of fact, that at the time of said conveyance the defendant, Kissick, had no knowledge that Gilmore was indebted to any person besides himself. This finding is supported by the evidence of the defendants, both of whom were examined on the part of the plaintiffs.

But even though Kissick had accepted the conveyance, with knowledge that Gilmore was in embarrassed circumstances, that would not necessarily imply that he took it with a fraudulent intent. And, where the conveyance is made for a fair and reasonable consideration, the court would not be warranted in declaring the same fraudulent and void, as regards the grantee, unless either fraud or a fraudulent intent be made to appear on his part, as well as on the part of the grantor (Carpenter agt. Muren, 42 Barb., 300; Waterbury agt. Sturtevant, 18 Wend., 353).

In the case at bar, the learned judge has found that there was no intent to hinder, delay or defraud the creditors of Gilmore, either in the making or acceptance of said conveyance. This the evidence authorized him to find, at least, in so far as the defendant, Kissick, was concerned. It is not disputed that the latter was a creditor of Gilmore’s to a large amount, for money which he had in good faith loaned and advanced to him at different times. There was, therefore, nothing unlawful or improper in Gilmore’s preferring Kissick to his other creditors, and transferring to him some of his property in payment of this indebtedness; and the latter had a perfect right to receive the same, in satisfaction of his just demands, provided no fraudulent intent entered into the transaction (Auburn Exchange Bank agt. Fitch, 48 Barb., 344; Waterbury agt. Sturtevant, supra).

It is, however, urged that the consideration paid for the premises was inadequate. It is true, the witness, Henry, swears that in April, 1869, he sold an adjoining house for $22,000, and gives it as his opinion that the premises in question were worth the same. But the uncontradicted testimony of the witness, Martin, shows that property, in that neighborhood, depreciated from twenty to forty per cent between April, 1869, and November of the same year, when the conveyance to Kissick was made. He, therefore, fixes the value of the house and lot in question, at that time, at from $14,000 to $15,000.

Now, it appears from the evidence that the consideration paid by Kissick to Gilmore for said conveyance, by releasing the latter from his indebtedness to him, and assuming the payment of a mortgage and other incumbrances, on the property, exceeded in amount $13,500. This consideration is not so obviously and clearly inadequate as to justify us in holding that the judge below erred in finding that the conveyance was made for nearly or quite the fair market value of said premises, and deciding that it should not be adjudged fraudulent or otherwise interfered with on that ground.

That there are suspicious circumstances in this case cannot be denied. And, although fraud need not necessarily be proved by direct evidence, but may also be inferred from the circumstances (Newman agt. Cordell, 43 Barb., 448), nevertheless, in the present case, we think they are insufficient to warrant us in finding or concluding that the grantee intended to hinder, delay or defraud the creditors of Gilmore, and more especially as the judge at special term has found that there was no such intention on his part.

The judgment should be affirmed.

Daly, Ch. J., and Robinson, J., concurred.

Judgment was entered for the defendants in accordance with the above opinion, and the plaintiffs appealed to the court of appeals, which court, in March, 1874, held that the judgment was correct, and affirmed the same.