Opinion
November, 1911.
Judgment affirmed, with costs, on the authority of Hickok v. Cowperthwait ( ante, p. 121), decided herewith.
Jenks, P.J., Burr and Rich, JJ., concurred; Thomas, J., read for reversal, with whom Carr, J., concurred.
This action is brought to set aside as fraudulent transfers of ninety-nine shares of the stock of the Brooklyn Chair Company by Frank H. Cowperthwait to his son, Frederick S. Cowperthwait, as trustee, and the transfer of twenty-five shares thereof by Frederick, trustee, to the Herman Capelle Company as collateral for two notes owned by Frank personally and discounted by such Capelle Company. In Hickok v. Cowperthwait ( ante, p. 121) I have considered transactions here involved and the transfer to the Capelle Company here particularly questioned, with the conclusion that whatever the motive of Frank, the trustee did not participate in any fraudulent intention, and have pointed out that much of the evidence regarded as establishing the fraud of Frank was not received against the Herman Capelle Company, and some of it not received against the trustee. I am unable to discover any evidence that indicates, in any degree, fraud on the part of the Capelle Company. It is suggested that it received shares issued to a trustee to secure a note discounted. The note was discounted at the time the stock was received. What should the offering of the trusteed stock suggest? That a trustee was using trust funds to secure a personal loan to a third person? Then what? If the beneficiaries were complaining, the question might be arguable. But the person complaining is one who asserts that there was no trust, hence no trust estate to be devastated, hence no beneficiaries, hence no fraud committed on a trust estate. The complainant's position seems to be that the Capelle Company, moved by the word "trustee" in the instrument, would upon investigation have found that Frederick was not a trustee, that the transfer to him was to defraud other creditors, tracing the transactions back from July 26, 1907, at least to June 29, 1904, and finding and weighing many acts that are not even admitted as evidence against it on the trial. The Capelle Company committed no fraud, it does not merit the finding of fraud and the ensuing judgment, and as to all appellants the judgment should be reversed and a new trial granted, costs to abide the final award of costs. Carr, J., concurred.