Baker v. Gilman

By the Court, Johnson, J. This case comes before us upon the report of the referee, merely, without the evidence taken before him. The plaintiff’s judgment was for services rendered by him, as attorney of the defendant Gilman, in defending two slander suits brought against the latter. The retainer was on the 4th of August, 1862, and the services ended at the • circuit in October, 1863, when the plaintiff’s complaint in each action was dismissed, and judgment ordered for the defendants therein for costs. The property which, the plaintiff seeks to reach and have subjected to his judgment, was conveyed by the defendant Gilman to the defendant Thurston, on the 7th of August, 1862, three days after the plaintiff’s retainer to defend the said actions. The consideration of the conveyance, as the referee finds, was one dollar, and the object and intention of it was to defeat the claims of the plaintiffs in" the slander suits, should they be able to establish any claims. Gilman had at the time no other "creditors, and his sole design was to get his property out of the way of any judgments which might possibly be [37] recovered in those actions, and not to hinder, delay or defraud any other person whatever. It turned out that the several plaintiffs in those actions had no “ lawful ” claim against Gilman. They were not creditors, and, as to them, the conveyance was valid, as it was, also, between the grantor and grantee. It was not designed to defraud the plaintiff" of his claim, as the referee expressly finds. As this conveyance was not made with intent to hinder, delay or defraud any existing creditor, or any person having a lawful claim, but only a person making an unlaw-' ful and unfounded claim, which the defendant Gilman disputed and denied, and ultimately defeated, it may present a grave question, whether it falls at all within the condemnation of the statute. The statute makes every conveyance void which is “ made with intent to hinder, delay or defraud creditors, or other persons, of their lawful suits, damages, forfeitures, debts or demands.” The sole object of the statute here, in declaring conveyances void, is to protect, and prevent the defeat of, lawful debts, claims or demands, and not those which are unlawful, or trumped up, and which have no foundation in law or justice, and the verity of which is never established by any judgment, or by the assent of the person against whom they are made. As against claims and demands of the latter class, the statute does not forbid conveyances or assignments, nor declare them void. This was clearly the character of the claims made against Gilman. If they had ripened into a judgment, that would have been conclusive evidence that they were just and lawful. But, as they were denied, and defeated, the adjudication is equally conclusive against them, for all the purposes of this action. There was, therefore, at the time the conveyance was made, no person competent to question its validity, and the title must have vested in the grantee absolutely, as against all the world. Subsequent creditors of the grantor could not reach it in such a case, as the foundation upon [38] which their rights are held to attach to property once owned-by their debtor, does not exist. It is only where a conveyance is void, or voidable, as to creditors, when made, that subsequent creditors of the grantor can attack it on that ground alone. It is not, in such a case, a Iona fide conveyance to the grantee, either as to prior or subsequent creditors. (King v. Wilcox, 11 Paige, 589.) Voluntary conveyances, in view of impending or apprehended insolvency, or where the grantor retains possession, as before, and obtains credit on the strength of his apparent ownership, stand upon a somewhat different footing, and do not affect the question here presented. (See Carpenter v. Roe, 10 N. Y. Rep. 227; Savage v. Murphy, 34 id. 508.) Here is no question of apprehended insolvency by the grantor, and it is clear that the credit was not given by the plaintiff upon the faith of Gilman’s ownership of the house and lot in question. It is expressly found, by the referee, that on the 9th of August, 1862, two days after the conveyance, and five days only after the retainer, Gilman informed the plaintiff of the conveyance, and of the object and purpose for which it had been tirade. The plaintiff had then only prepared the answers in the slander suits, which were verified and served on that day. Only a small portion of the plaintiff’s demand had then been earned, and he went on without objection, and continued defending the actions, for a year and over, afterwards, and Until they were determined in the defendants’ favor. The plaintiff’s judgment was obtained June 11, 1864. The plaintiff was clearly a subsequent creditor of Gilman. His employment, by virtue of his retainer, was a continuous one until the determination o'f the actions. It was a single demand for services, a small portion of which were rendered before the conveyance, and the far larger portion long afterwards. This being embraced in one judgment, nearly two years after the conveyance, renders the plaintiff clearly a subsequent [39] creditor. This point,, in just such a case as this, was expressly decided by the Supreme Court of Maine, in Reed v. Woodman, (4 Greenl. 400.) [Monroe General Term, September 7, 1868. But there is another ground on which I think the plaintiff is clearly precluded from claiming to reach this property, and subject it to his judgment. The defendant Gilman was his client, and he was informed of what had been done, and of the intent of the transaction, very soon after the relation was formed. He made no objection, and asked for no security, hut continued the service, as he had begun it, with full knowledge of the whole transaction, and of its character. Under such circumstances, I think, he must be held to have assented to it, and to have consented to go on, and trust the defendant, upon the basis of that property being out of his hands, and under the ownership and control of another. I do not think a creditor, who has trusted his debtor after being fully informed by the latter that he has put his property out of his hands, by a conveyance, valid as between him and his grantee, though voidable as to existing creditors, should ever be allowed to come into court, and claim that such conveyance was fraudulent and void, as to him, on account of such indebtedness. As to such creditor, a conveyance of that kind would not be fraudulent, in any sense, and could not, on that ground, be avoided. I am not aware that this precise point has ever arisen and been adjudged, hut, upon general principles, it seems to me exceedingly clear. ■ The judgment must, therefore, be affirmed. S $, Smith, Johnson and J. C. Smith, Justices.]