Smart v. Harring

Ingalls, J. — The jury has found that the conveyance by Harring to his wife was made with intent on his part to [507] hinder, delay and defraud his creditors, and that his wife received such conveyance without knowledge of such fraudulent intention on the part of her husband. The evidence shows that the wife parted with nothing of value, save the effect which the giving of the mortgage, which she executed in conjunction with her husband, might have upon her dower interest in the property, provided she survived her husband. The improvements upon the land were made with money furnished by the husband. Under the circumstances of the case, I do not think her want of knowledge of her husband’s fraudulent intent to defraud his creditors is sufficient to place the property beyond the reach of the creditor whose debt had, in part at least, accrued when the conveyance was executed (Mohawk Bank agt. Atwater, 2 Paige, 59). In that ease the chancellor remarks : “ If the father committed a fraud upon his creditors by giving away property which should have been reserved for them, the grantee, without valuable considertion, cannot be protected, although he was not privy to the fraud ” (See, also, Holmes agt. Clark, 48 Barb., 237; Case agt. Phelps, 39 N. Y., 164; Savage agt. Murphy, 34 id., 508; Carpenter agt. Roe, 10 id., 228). A voluntary conveyance can be sustained upon the ground that the grantor has reserved property sufficient to pay his debts, only in a case where the conveyance is in good faith, and without intent to defraud creditors (Fox agt. Moyer, 54 N. Y., 126; Pendleton agt. Hughes, 65 Barb., 136). I am aware that it has been held that a voluntary conveyance by husband to wife is not necessarily or presumptively fraudulent as against creditors, and that the want of consideration is but a circumstance to be -considered, with all the other facts, in determining whether the conveyance should be pronounced fraudulent (Holen agt. Burnham, 63 N. Y., 74). The fact standing alone that the conveyance was voluntary, without any other circumstances, would not be sufficient to justify declaring it fraudulent as against.ereditors. A fraudulent intent must be shown,.and that must be established as a [508] question of fact, and the want of consideration is an ingredient (Babcock agt. Eckler, 24 N. Y., 632). In the case above cited (Holden agt. Burnham), the learned judge remarks: “ The action is founded upon the allegation that the conveyance by Hr. Burnham was made with intent to hinder, delay and defraud his creditorsthere is no finding upon this question, or any request to find upon it.” In the case we are considering, the fraud of the husband is found by the jury, and the facts are such that his wife cannot be exempted from the consequence of such fraud. If the facts established a valuable and adequate consideration, legal or equitable, in favor of the wife, a case would be presented which would entitle her to protection, the jury having found that she had no knowlenge of her husband’s fraudulent intent. But, upon the facts established, the plaintiffs are entitled to a preference, and judgment must be entered accordingly, with costs.