Opinion
10-22-1900
RUPPERT v. HURLEY et ux.
Wm. S. Stuhr, for complainant. Wm. P. Hurley, for defendants.
Suit by Jacob Ruppert against Joseph Hurley and wife to set aside a fraudulent conveyance. Decree for plaintiff.
Wm. S. Stuhr, for complainant.
Wm. P. Hurley, for defendants.
PITNEY, V. C. The complainant is a judgment creditor of the defendant Joseph Hurley, and the object of the bill is to set aside in his favor a conveyance of a house and lot in the city of Hoboken made by the defendant Joseph Hurley to his wife, through an intermediary, by deeds dated December 30, 1897, recorded March 16, 1898. The consideration named in the deeds is $1. At the time of the making of the conveyances the defendant Joseph Hurley was, confessedly, indebted to the complainant in a large sum of money, which forms the principal part of the complainant's judgment, which was the result of a suit commenced July 2, 1898. towhich the defendant interposed a plea, and Judgment was entered in favor of the complainant September 20, 1808, in the sum of $2,599 of damages, besides costs. An undisputed fact in the case is that the defendant Joseph Hurley purchased the premises in question by deed of conveyance to him on the 21st of September, 1892, for the sum of $2,050, and held the title thereto without incumbrance up to the date of the conveyance here brought in question. The bill charges that the conveyance to the wife was made without consideration, and for the purpose of defrauding the complainant. The answer states that the true consideration was the sum of $2,680, $1,000 of which was loaned to the said Joseph Hurley by his wife in the year 1890, "and on which there is now owing the sum of $480 interest," and that the balance of $1,200 was paid at the time of the delivery of the deed to the wife. This defense of payment was attempted to be sustained by the evidence of the wife and her son, a solicitor of this court. She says that, as the result of her earnings in keeping boarders and conducting a barber shop, she was in the year 1891 possessed of two mortgages, which she assigned in June of that year to one Hennessey for $954.71. That she received some such sum of money is proven by the broker who negotiated the sale of the bonds and mortgages, and the date is fixed by the production of an exemplified copy of the assignment of the mortgages. This sum she swears she loaned out at the time to her husband. No written memorandum of any kind was made of the transaction between the husband and wife. He gave her no note or acknowledgment whatever. They lived, as I understand the evidence, in the premises here in question from the time of their purchase, or in other premises, the rent of which was paid by the husband, until 1897. The wife swears that she supported a family of seven children, the youngest of whom is now about 10 years old, contributed largely to their education,—fitting one for the profession of a lawyer, and another son for that of a doctor—without any aid whatever from her husband. He was engaged during that time in keeping a liquor saloon in Jersey City. She also ran one, with the aid of her son, either in the premises here in question, or one rented for the purpose, in her husband's name as licensee. She had previously maintained a barber shop. He swears that in the spring of 1897 he sold out one liquor store, and had seven or eight hundred dollars clear money left after paying all his debts, and that with that money, and with the aid of other moneys advanced by the complainant, who was a brewer in the city of New York, he leased a house or building on River street, Hoboken, in the neighborhood of the steamboat wharves, and started a new liquor saloon, and conducted it from the spring of 1897 until July, 1898, when he was distrained upon for nonpayment of rent, and turned out of possession. He lived with his family in the house so rented, and spent money in improving the sleeping apartments, so that they had several rooms for rent to lodgers. He also built an addition in the rear of the liquor saloon, namely, a kitchen and dining room, where his wife carried on, as they say, the separate business of keeping a restaurant for longshoremen, giving them a solid dinner for 20 cents. The rent of the premises was $100 a month, which was paid by the husband. The complainant furnished the fittings and furniture, and charged Hurley for them $650. He advanced $1,500 in cash, taking his notes for it; and in addition he gave him $300 to assist him in fitting up the restaurant and kitchen,—making altogether at least $2,500 in cash that Mr. Hurley had to start business with. His wife swears that she carried on the restaurant business independently, and made money all the while. The husband declares that for the first few months, until the winter of 1897, his business was flourishing, and that he made money, and then the business began to fall off on account of a change in the tariff, and he lost money, and was unable to pay his rent in July, 1898, and was suddenly distrained upon and sold out.
The amount of beer furnished defendant and retailed by him in the spring of 1898, as shown by the bill of particulars annexed to the declaration in complainant's judgment, shows that his business was, to say the least, sufficiently flourishing. And later he says, in contradiction of his statement that his business fell off, that he considered his "place" worth four or five thousand dollars, and demanded that price from inquiring persons who expressed a desire to purchase it, and that the catastrophe of a distress and sale for nonpayment of rent was the result of a conspiracy between his landlord and some other persons to eject him from the place. This account of his misfortune seems to me to more reasonably account for the final catastrophe than the idea which he attempted in the former part of his evidence to impress upon the court, namely, that the business fell off gradually and permanently.
The wife swears that in addition to the $1,000, more or less, which she received from the assignment of the mortgages in 1891, she continually saved money from that time on, besides supporting her family, so that at the time of the transfer of the property to her she had saved $700; that a short time before that she had received from the estate of a deceased uncle in Scotland the sum of $500, so that she had in cash $1,200. And this she swears she paid to her husband, in addition to the debt which he previously owed her for the transfer of the property. This money she swears she kept in the house in bills,— never used a savings or other bank of deposit,—sometimes carrying it about her person in her clothes, and sometimes in a little parlor fireproof safe, one or two feet square. There is not a particle of evidence of the alleged indebtedness for money loaned in 1891, except that of the husband and wife. Thedanger of relying upon such evidence in such cases has been frequently pointed out, and the manner of the witnesses in this ease was such as not to Inspire confidence.
With regard to the $1,200 alleged to have been paid at the time the deeds were passed, the evidence more in detail is as follows: The wife swears that $500 of it was in $100 bills, which were paid to her by her cousin Toole (who was the intermediary through whom the title passed from the husband to the wife), who brought it to her from Scotland as her share of her uncle's estate. Now, no witness swears that he saw this money paid to the wife. The husband says he knows nothing about it. The son swears generally that his mother received the money. He does not explain how it became converted into $100 bills. We know, of course, that it is highly improbable that it was brought from Scotland in that shape; and yet the evidence would seem to indicate that it was so brought. If brought in a draft, and the money obtained upon it from a bank here, that circumstance could have been proven. In short, the mode in which it was converted into $100 bills could have been shown and proven to the satisfaction of the court. Toole himself was not called. The reason given was that he had returned to Scotland. Then with regard to the other $700 going to make up $1,200 paid at the execution of the deed: It is to be remarked, in the first place, that when the defendant was put on the stand she did not swear that the sum paid at the time of the transfer of the property was $1,200, but said repeatedly, when pressed, that it was between ten and twelve hundred dollars. The son, who handled the money, says once or twice that it was about $1,200. When pressed he said it was just $1,200, and the husband swears that it was just $1,200. No explanation is made of the inserting of $1 as the consideration. The theory of the complainant was that, if any money was shown and manually transferred at the time the title passed, it was really the husband's money. On the latter's' own showing, the business had been quite flourishing from the time it was started, on the 1st of June, or thereabout, up to the last of December, a period of seven months, and he was in good credit,— such credit that the complainant, who usually took chattel mortgages for advances of this kind, did not require any in this case. So that Hurley owned the establishment free and clear of any incumbrance, and, if he did not have so much money on hand as his accumulated earnings at that time, he could easily have borrowed it for the occasion; and it was highly improbable that the wife, who, according to the theory of the defendants, bore all the burden of supporting the family, consisting at that time of several young children, and at the same time assisting the sons in their education, could have saved that much money. The barber shop, out of which it is said she made some money, had been parted with several years before this transaction. The husband, called upon to show what he did with this $1,200, gave no satisfactory account of its expenditure, said he paid debts, but was unable to specify more than one or two names and amounts, and produced no vouchers; and his manner on the stand was not at all convincing to the court.
The case, then, stands thus: A man, the owner of a house and lot of some value, free of incumbrance, in good credit, free of debt, with seven or eight hundred dollars cash in hand, obtains from complainant, a brewer, an advance of $2,150 in money and chattels, and a gift of $300, to assist him in fitting up a beer and liquor saloon, restaurant, and lodging house, and is in such good credit that he is not required to do what is usual in such cases, namely, give a chattel mortgage to secure the advances. His business proves profitable. His wife keeps a restaurant in connection with the saloon, pays no rent, and makes money at it. His sales of liquid refreshments are entirely satisfactory, and while in that situation he makes a deed of conveyance of the house and lot to his wife for the nominal consideration of $1. He is still indebted to complainant $2,150 for money and material advanced. He subsequently meets, unexpectedly, with misfortune, and is sold out for nonpayment of rent. Complainant then obtains judgment for the old debt of $2,150, and for beer subsequently sold, and attacks the conveyance. The wife then sets up that there was an actual consideration of $2,080, in an old debt and interest of $1,480, and cash presently paid of $1,200. Her account of the origin of this $1,200, and his account of his disbursement of it, are both unsatisfactory. He is quite positive that it was not until May or June, 1898, that he felt that the business would not succeed, and at the time he transferred the title he "had no doubt the place would be a big success." Now, upon this state of things, the idea at once suggests itself to the judicial mind that the consideration mentioned in the deed, of $1, was the only consideration paid, and that the transfer was intended as a gift, and that the husband did not feel himself at that time at all embarrassed, and honestly expected to pay the complainant in full the money he owed him, according to the original arrangement (he swears that a part of it was to be paid by credits on beer sold, provided he continued to buy of the complainant); that this condition of mind continued until the final catastrophe, and then, in order to sustain the conveyance, the plan is devised of setting up and proving an actual consideration not expressed in the deed. A review of the evidence, and a consideration of all the circumstances, lead me to the conclusion that it is not satisfactorily shown by Mrs. Hurley that she loaned the $1,000 to her husband in 1891, and I am in great doubt whether or not the payment of $1,200 was an actual payment of her money. The whole story bears upon its face the marks of manufacture. Upon the whole case, I find myselfunable to conclude that the wife has successfully met and overborne the burden clearly resting upon her of proving to the satisfaction of the court that she paid a valuable consideration for the premises in question. On the contrary, I think it more probable that the deeds stated truly the consideration actually paid, and that the husband at that time had no thought of failing to repay the complainant in the manner agreed upon. The result is that the complainant's judgment must, as to so much of it as represents the debt due at the date of the transfer, with the costs at law and the costs of this suit, be declared to be a lien upon the premises superior to the title of the wife.