Putnam v. . Hubbell

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 108 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 109 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 110 The referee, after finding the recovery of judgment by the plaintiff, and the issuing and return of execution thereon, the making of the assignment by Alfred Hubbell to Joseph Medbery and E. Darwin Smith for the benefit of his creditors, and the acceptance of the trust by the assignees, and the taking possession by them of a large amount of real and personal property and choses in action under such assignment, proceeds as follows: "12th. The fact that the said Alfred Hubbell being largely indebted to the plaintiff and other persons, and unable to pay his debts, did, in the early part of the month of January, in the year 1849, and a short time before making the aforesaid assignment, *Page 111 form a scheme to prevent his property from being fairly and promptly applied to the payment of his debts, and to delay, hinder and defraud the plaintiff and said other persons of their said debts against him. 13th. The fact that the defendant, Alrick Hubbell, became a party to said scheme of the said Alfred Hubbell, and in pursuance thereof, and with intent to delay, hinder and defraud the plaintiff and said other persons of their said debts, did, after the making of said assignment and before the commencement of this action against the said Alfred Hubbell, and principally during the year 1849, acquire title to several valuable parcels of real estate of the said Alfred Hubbell, situate in this State, for prices considerably below their actual value, and which parcels of real estate were owned by the said Alfred Hubbell at the time of his making said assignment, and the title to which passed under the same to the said Medbery and Smith. 14th. The fact that the defendant, Alrick Hubbell, has sold several pieces of said real estate of the said Alfred Hubbell, to which he, the said Alrick Hubbell, acquired title, as above stated, for large sums of money above those he paid for the same, and still owns and possesses other parcels thereof." The referee fails to find any facts which indicate a fraudulent scheme on the part of Alfred Hubbell or Alrick Hubbell to hinder, delay or defraud the creditors of said Alfred. The mere finding that there was a scheme without stating in what it consisted, does not enable the court to determine anything in regard to it. It is but a conclusion without facts to support it. The facts that Alfred Hubbell became largely indebted and unable to pay his debts, and made an assignment for the benefit of his creditors, and that he preferred some creditors in such assignment, do not establish fraud. All these facts may exist without the slightest intention on the part of the debtor to defraud, hinder or delay his creditors. In what, then, did the scheme consist? What did he do? The report of the referee does not show. The assignment is unobjectionable on its face, and the assignees are reputable and responsible men. I am unable to discover upon what *Page 112 ground the assignment could be set aside, or from what facts any fraudulent scheme could be inferred. In regard to the defendant, Alrick Hubbell, it is found that he became a party to such scheme, and that in pursuance thereof, he acquired title to several valuable parcels of land, at less than their actual value, which real estate was owned by Alfred Hubbell at the time he executed the assignment, and the title to which passed to the assignees under said assignment, and that he sold said real estate at a price in advance of what he paid for the same. All such acts were justifiable in themselves, and should not be pronounced fraudulent, unless coupled with other transactions of a fraudulent nature, connected with the sale and purchase of such real estate. The mere finding, that there was a fraudulent scheme, which neither the facts found by the referee northe evidence sustains, amounts to nothing. The real estate of Alfred Hubbell was heavily incumbered by mortgages, and it is not pretended that they were without consideration, or otherwise fraudulent; and the real estate was sold under foreclosure of such mortgages, and purchased by Alrick Hubbell, at public sale, and paid for, so far as the evidence shows, out of his own money. The plaintiffs could have attended such sales, and prevented the sacrifice of which they complain, or purchased for their own benefit, but having chosen not to do so, and thereby allowed Alrick Hubbell to purchase, should be content. If any irregularity attended such sales, a direct application should have been made to the court to set the same aside, and order a resale. After Alrick Hubbell had fairly purchased such property, he had a right to dispose of it as he chose, even to giving it away. When the conclusion of a referee is wholly unsupported by evidence, this court will reverse. (Fellows v. Northrup,39 N Y, 117; Mason v. Lord, 40 N.Y., 477.) The judgment should be reversed, and a new trial ordered, with costs to abide the event.