Opinion
November, 1898.
William B. Ellison, for plaintiff.
Evarts, Choate Beaman, for defendant demurring.
This action is brought to require Mrs. Dunham to account for property conveyed to her by her husband, with intent to defraud, as it is alleged, the beneficiaries of an estate of which he was one of the executors and trustees. She demurs on the ground that the complaint does not show any indebtedness of the trustee existing in favor of plaintiff, or any other person, at the time of the conveyances attacked; that, treating the conveyances as made prior to the time of the improper investments of estate funds, for which the trustee has been personally charged by the surrogate, the plaintiff's allegations do not bring the case within the rule according to which subsequent creditors can attack the conveyances; and, that either as to an existing or a subsequent creditor, there is no sufficient allegation of fraud in the disposition made by the trustee of his own property. The defendant's husband became executor and trustee in February, 1874, and one conveyance to his wife was made in December, 1875. When the other conveyances of all his property was made, as alleged, to his wife, is not stated, but it is alleged that they were made while he was acting as trustee and executor; and it is alleged that they were all made without consideration, and with intent to defraud the estate and beneficiaries, and to hinder the latter from recovering from him, or his estate, satisfaction for so much of the trust estate as he was found to have wasted by a decree of the surrogate of Queens county in November, 1897; and that Mrs. Dunham (her husband having died in January, 1888) holds the said property so received from him with the like intent. Two of the improper investments charged against the trustee were made in 1883. Whether the indebtedness to the beneficiaries of the estate may be said to have accrued in 1897 by the decree charging him with the same, or in 1883, at the time of the improper investments, or at any time after the conveyances to his wife, is immaterial upon this demurrer, since the specific charge is made in the complaint that all such conveyances were without consideration, and were made and are held with intent to deprive the beneficiaries of the trust estate of effective means of enforcing, against his individual property, his liability as trustee, for the funds improperly invested and lost, and for which he is chargeable. The facts going to show the fraudulent intent are matters of proof and, as evidence, are not proper in pleading. A voluntary conveyance by a husband to a wife is not good as to subsequent creditors if made with intent to defraud them. Neuberger v. Keim, 134 N.Y. 35. "Plaintiffs' debt was created subsequently to the deed of conveyance (the grantor), at the time being free from debt. Hence, the plaintiff could successfully assail the deeds only by showing that they were given with a view of continuing in business and creating future debts, and saving his property from them, or for the purpose of defrauding his future creditors." Teed v. Valentine, 65 N.Y. 471-4. The allegations of the complaint are specific that such was the intent of the grantor in making the conveyances to his wife, and are, therefore, sufficient to require her to make answer. Judgment for plaintiff on demurrer, with costs. Leave to answer on payment, with costs.
Ordered accordingly.