Kain v. Larkin

• Decision Date: 01 March 1892
• Citation: 131 N.Y. 300,30 N.E. 105
• Parties: KAIN v. LARKIN et al.
• Court: New York Court of Appeals Court of Appeals

131 N.Y. 300

30 N.E. 105

KAIN

v.LARKIN et al.

Court of Appeals of New York.

March 1, 1892.

Appeal from supreme court, general term, third department.

Action by Margaret Kain, administratrix of David Kain, deceased, against Patrick and Maria E. Larkin, to set aside a deed. From a judgment of the general term affirming a judgment for plaintiff entered at special term, defendants appeal. Reversed.

F. A. Westbrook, for appellants.

G. R. Adams, for respondent.

The other facts fully appear in the following statement by EARL, C. J.:

In November, 1886, the defendant Patrick Larkin, then a police officer in the city of Kingston, killed the intestate,David Kain. Thereafter the plaintiff was appointed administratrix of the estate of the deceased, who was her son; and on the 6th day of January, 1887, she brought an action against Patrick Larkin to recover the pecuniary damages suffered by the next of kin of her son from his death. At that time Patrick Larkin had on deposit in a savings bank about $1,400, and he owned real estate in the city of Kingston worth $3,000. On the 8th day of January, 1887, he drew from the savings bank all his money, and redeposited $1,200 thereof in the same bank in the name of his wife, who was then living, but has since died; and on the 12th day of January, 1887, he executed and delivered to his brother Michael a mortgage upon the real estate for $3,000. The plaintiff's action against Patrick Larkin was brought to trial in November, 1887, and resulted in a verdict and judgment in favor of the defendant. The plaintiff appealed from the judgment to the general term, and, while that appeal was pending, Patrick Larkin executed and delivered a quitclaim deed of his real estate to his only child, the defendant Maria E. Larkin, who was then under the age of 21 years. Thereafter, on the 27th day of May, 1889, Michael Larkin executed and delivered to his brother Patrick a satisfaction of the mortgage for $3,000, above mentioned. The consideration recited in the deed to the defendant Maria was in these words: ‘In consideration of natural love and affection, and the sum of one dollar.’ In February, 1890, the judgment in favor of Patrick Larkin was reversed, and a new trial was granted. The new trial was had, and resulted in a verdict in favor of the plaintiff for $800 damages, besides costs. Patrick Larkin was indicted for the homicide, and was convicted, and sentenced to prison in 1887, where he remained about a year, when he was pardoned, and released from prison. This action was commenced in February, 1891, to set aside the deed from Patrick Larkin to his daughter, on the ground that it was executed and delivered to her for the purpose of hindering, delaying, and defrauding the creditors of the grantor. The complaint alleges the recovery of the judgment by the plaintiff on the cause of action, which accrued on the 21st day of November, 1886; that the defendant Patrick Larkin, at the time, owned the real estate, and had the deposit in the savings bank; that he drew the money from the savings bank, redeposited a portion thereof, executed the mortgage, and subsequently conveyed the real estate, as hereinbefore mentioned. The complaint further alleges that the conveyance of the real estate was made to cover up and conceal the right and title therein of Patrick Larkin, and for an inadequate consideration, and with the intent to hinder, delay, and defraud the plaintiff of her just rights, damages, and claims against him; that the deed was executed for the consideration therein expressed, and for the further consideration not written therein, and made orally between the parties thereto, at the delivery thereof, to the effect that Maria E. Larkin should take care of and furnish support to Patrick Larkin during his old age. The answer denied the fraud alleged in the complaint, and also that the deed was without any consideration, or for an inadequate consideration, and alleged, on the contrary, that it was executed in good faith, and for a sufficient and valuable consideration. The action was brought to trial, and resulted in a judgment in favor of the plaintiff, which has been affirmed at the general term.

EARL, C. J., ( after stating the facts.)

There was a fatal defect in the plaintiff's proof to establish the allegation in the complaint that the deed from Patrick Larkin conveying his real estate to his daughter was executed for the purpose of hindering, delaying, and defrauding his creditors. It is provided in the Revised Statutes (2 Rev. St. p. 137, § 1) that every conveyance of land made with the intent to hinder, delay, or defraud creditors of their lawful suits, damages, forfeitures, debts, or demands, as against the person so hindered, delayed, or defrauded, shall be void; and in section 4 it is provided that the question of fraudulent intent in such a case ‘shall be deemed a question of fact, and not of law; nor shall any conveyance or charge be adjudged fraudulent as against creditors or purchasers solely on the ground that it was not founded on a valuable consideration.’ Thus, by the express terms of the statute, it is not sufficient to condemn a conveyance of land, as a fraud upon creditors, that it was not founded on a valuable consideration. A person assailing such a conveyance must go further, and show by other evidence that it was made with the fraudulent intent condemned in the statute. An owner of real estate can make a voluntary settlement thereof upon his wife and children without any consideration, provided he has ample property left to satisfy all the just claims of his creditors. If the grantor remains solvent after the conveyance, and has sufficient property left to satisfy all his just debts, then the conveyance, whatever his intention was, cannot be a fraud upon his existing creditors; and, when a judgment creditor assails a conveyance made by the judgment debtor, he cannot case upon the grantee the onus of showing good faith, and of establishing that the grantor was solvent after the conveyance, by simply showing that the deed was not founded upon a valuable consideration. But the person assailing the deed assumes the burden of showing that it was executed in bad faith, and that it left the grantor insolvent, and without ample property to pay his existing debts and liabilities; and so it has been repeatedly held. Pence v. Croan. 51 Ind. 338;Sherman v. Hogland, 54 Ind. 579;Whitesel v. Hiney, 62 Ind. 168;McCole v. Loehr, 79 Ind. 432;Wilbur v. Fradenburgh, 52 Barb, 480;Dygert v. Remerschnider, 32 N. Y. 637;Holden v. Burnham, 63 N. Y. 74;Bank v. Mead, 92 N. Y. 637. Here there was no allegation in the complaint that the money deposited in the savings bank, and the real estate conveyed by the judgment debtor to his daughter, constituted, substantially, all the property he had, or that he was insolvent at the time of the conveyance, or that he was thereby rendered insolvent; and there was no allegation in the complaint that he owed any debts, except the liability which he incurred by killing the plaintiff's intestate. The trial court found that ‘there is no evidence that, at the time of giving the deed, he was indebted to any person, except so far as his liability to this plaintiff might be regarded as an indebtedness;’ and that ‘it is not shown by the evidence that, at the time of the execution of said deed, or before, said Patrick Larkin did not have ample and sufficient pecuniary means and property to pay all claims and demands against him, including the claim subsequently adjudged by the jury in October, 1890; but the transfer of his real and personal property, if valid, would so divest him of his property that he had not sufficient to satisfy the judgment which plaintiff obtained.’ By the latter part of this finding the trial judge meant that Larkin, at the time of the recovery of the judgment by the plaintiff against him, and the issuing and return of the execution thereon, which was about 18 months after he had executed the deed to his daughter, then did not have sufficient property to satisfy the judgment and execution. But the fact that the defendant, after the expenses in the action brought by the plaintiff against him, after he had been indicted, tried, and convicted for the homicide, after he had been confined a year in prison, and after he had lost and buried his wife, was found not to have any property to pay the judgment, is not sufficient evidence that he did not have ample property left to satisfy the plaintiff's claim immediately after giving the deed to his daughter on the 1st day of May, 1889, nearly 18 months before. It was said in Sherman v. Hogland, supra: ‘We do not think it sufficient to charge that some months or years after the conveyance was executed no other property could be found on which to levy an execution, or that, at some subsequent time, it was ascertained that the debtor had become wholly insolvent.’ In McCole v. Loehr, supra, it was said: ‘The allegation that the grantor died hopelessly insolvent does not make the complaint sufficient. The character of a transaction is to be determined by the circumstances surrounding the parties at the time it took place. The...