Opinion
March 10, 1952.
Present — Carswell, Johnston, Adel and MacCrate, JJ.; Nolan, P.J., not voting.
On September 16, 1948, defendant Post contracted to sell certain real property to defendants Browne and Lovell. Title closed on March 12, 1949. On March 14th and again on March 21, 1949, defendant Post assigned to defendant Ruhl a $4,225 purchase-money mortgage which he received from defendants Browne and Lovell at the closing on March 12, 1949. On March 15, 1949, plaintiff (the wife of defendant Post) commenced an action for separation. After an order had been granted for temporary alimony and counsel fees, plaintiff on May 24, 1949, was appointed receiver in sequestration of defendant Post's property. On July 20, 1949, defendant Ruhl assigned the $4,225 purchase-money mortgage to one McHugh (not a party to this action) for $2,200 plus accrued interest of $85. On August 16, 1949, plaintiff, in her individual capacity and also as receiver in sequestration, commenced this action to set aside the conveyance by Post of his real property on March 12, 1949, and the assignment of the mortgage by Post to Ruhl on March 14 and 21, 1949, on the ground that there was no consideration for the transfers, that they were not made in good faith, and that the properties were being held by defendants for the use and benefit of defendant Post. After trial before an Official Referee, to whom the matter was referred to hear and determine, it was found with respect to the real property that a fair consideration was actually paid by Browne and Lovell to Post and that the purchasers did not knowingly participate in any fraud of which Post may have been guilty. The complaint against Browne and Lovell was dismissed. With respect to the bond and mortgage, the Official Referee found that, during the period Ruhl held it, Post controlled it, that Ruhl had knowledge of Post's intent to deprive plaintiff of alimony which might accrue, and that, therefore, Ruhl should be held liable for the $2,285 he received from McHugh when Ruhl assigned the mortgage on July 20, 1949. Plaintiff and Ruhl appeal from the parts of the judgment which affect each adversely. Judgment modified on the law by striking from the second decretal paragraph the figures (a) "$2,285.00" and substituting therefor the figures "$4,225.00"; (b) "$240.50" and substituting therefor interest calculated on $4,225; (c) "$2,698.35" and substituting therefor the new total of the judgment. As so modified, the judgment is unanimously affirmed, without costs. The findings of fact are affirmed. The findings with respect to all the defendants are justified by the evidence and may not be disturbed. Defendant Ruhl must be held liable for the face amount of the mortgage. Where property fraudulently transferred is sold by the transferee for less than its value at the time he received it, the creditor is not limited to the price received, but may recover the value of the property at the time the fraudulent transferee received it. ( Hamilton Nat. Bank v. Halsted, 134 N.Y. 521; Valentine v. Richardt, 126 N.Y. 272.) By permitting the mortgage to be placed in his name from March 14, 1949, to July 20, 1949, Ruhl deprived plaintiff of the benefit of the mortgage to secure the payment of alimony already accrued and to accrue in the future. A money judgment against Ruhl was proper even though Ruhl had transferred the mortgage prior to the commencement of this action. ( Valentine v. Richardt, supra.)