Opinion
June 9, 1922.
Henry C. Frey [ Elmer J. Ashmead with him on the brief], for the appellants.
Charles H. Street [ Rawdon W. Kellogg with him on the brief], for the respondent.
The learned trial justice decided in favor of plaintiff. ( 115 Misc. Rep. 462.) He found the agreement by the wife to reconvey, continued expenditure by plaintiff for taxes and repairs, insurance, etc., that the value of the property was $4,000. He found that when Fisher bought the property in December, 1920, he knew that plaintiff was separated from his wife and that he was in possession of the premises. He found that Fisher and his wife were not innocent purchasers and that they were chargeable with notice of the trust agreement. He decreed that plaintiff was the owner of the property, that the deed from the wife to the Fishers should be canceled and that Mrs. Tiedemann should reconvey the property to the plaintiff. And the judgment so provided. Nothing is said in the findings or judgment about Mrs. Tiedemann returning the $1,000 to the Fishers, but the Fishers made no request for such judgment and made no point about it. The case contains no exceptions to the findings made by the learned justice. The defendant Mrs. Tiedemann does not appeal from the judgment.
I think the judgment was right. The sufficiency of the oral agreement to reconvey is not attacked by the defendant on the record. Appellants' argument is that no fraud was shown on the part of Fisher, that there was no proof of inadequacy of consideration and that the decision is against the evidence.
The plaintiff's possession of the property was notice of his claim of title to Mr. Fisher ( Phelan v. Brady, 119 N.Y. 587), and there is abundant evidence to sustain the finding of the learned trial justice that in this rural community in Queens, the conditions existing between the plaintiff and his wife were known to his near neighbor of fifteen years' standing. The insufficiency of the consideration paid, the haste with which the transaction was closed and the absence of explanation by Mr. Fisher, who was present at the trial, justified the finding of the learned justice that Mr. Fisher was endeavoring to take advantage of the dispute between husband and wife to get the family home at much less than it was worth without consulting the husband.
But my brethren who dissent think that the plaintiff cannot have relief in equity because he made the deed to his wife for the purpose of hindering, delaying and defrauding his creditors. (See Simis v. Simis, 146 App. Div. 655; Lynch v. Jones, 179 id. 613.) It seems to me the answer to this is that there is no evidence that the plaintiff had any creditors at the time he made the deed to his wife, or at any time, nor is there evidence that by making the deed in question he divested himself of all his property. On the evidence in the case he was still entirely solvent. He had his contracting business and plant and it is evident that he was in funds because he continued to improve the property and to expend money on it. Apparently the railroad company acknowledged its responsibility for the accident in which the boy was killed who was riding on plaintiff's truck. There is no suggestion that the boy's parents ever made claim that plaintiff was responsible for the occurrence or that he owed any money to the next of kin of the deceased boy. It is suggested that as the next of kin of the boy were potential creditors, they might have presented a claim, and that Tiedemann had this in mind when he made the deed and that he intended to remove the property from the lien of any judgment which might be recovered. But I think this is going too far. Tiedemann never conceded that he was responsible for the accident. On the contrary, he preferred a claim against the railroad company and collected damages. If he feared a lawsuit I see no justification on the evidence for the inference that he was endeavoring to defraud any one. There is no evidence of any debt or liability on his part, and the objections of my dissenting brethren are based on the inference that there was a debt, and secondly on the inference that if there was a debt he was endeavoring to avoid it. None of the decided cases go to this extreme. If there are in fact debts and obligations and the debtor divests himself of property to avoid payment, it may be that he cannot recover it in equity, but that is not this case. In the countless cases where a man takes title to his home in his wife's name, or transfers the home to his wife so that she may have shelter for herself and children, if we go into the mental operations of the husband and father we may find that the transfer was made to protect the family against the vicissitudes of business operations and the like, but I have never understood that such transfers were barred by the law or by considerations of conscience and fair dealing. I think the judgment was right and that it should be affirmed.
RICH and YOUNG, JJ., concur; BLACKMAR, P.J., and JAYCOX, J., dissent on the ground that a court of equity will not relieve the plaintiff from a conveyance made with intent to hinder and delay creditors.
Judgment affirmed, with costs.