Goldberg v. Parker

• Citation: 87 A. 555,87 Conn. 99
• Court: Supreme Court of Connecticut
• Decision Date: 13 June 1913
• Parties: GOLDBERG v. PARKER et ux.

87 A. 555

87 Conn. 99

GOLDBERG

v. PARKER et ux.

Supreme Court of Errors of Connecticut.

June 13, 1913.

Roraback and Thayer, JJ., dissenting.

Appeal from Court of Common Pleas, Fairfield County; Howard B. Scott, Judge.

Action by Harris Goldberg against Albert J. Parker and wife. From a judgment for defendants, plaintiff appeals. Reversed and remanded, with directions to enter judgment for plaintiff.

Mrs. Parker purchased, on April 12, 1890, a lot of land on Madison avenue, on May 5, 1891, a lot on Pacific street, and on January 8. 1892, a piece of land on Dewey street, all being in the city of Bridgeport The title was taken in the name of her husband, the defendant, who in the first two purchases gave back a purchase-money mortgage and note, and in the last assumed a mortgage thereon as part of the consideration thereof.

On June 27, 1892, Mrs. Parker caused her husband to transfer the three pieces to one Wilson, in consideration of the transfer to him of another piece of property on Dewey street and the assumption of a mortgage on this property of $1,500. On June 25, 1900, Mrs. Parker caused her husband to give a note for $1,500, secured by mortgage on the Dewey street property. In June, 1906, Mrs. Parker purchased a piece of land on North avenue in Bridgeport, and took title in the name of her husband, who assumed a mortgage of $1,500 thereon, as part consideration. All of these conveyances were duly recorded.

Mrs. Parker paid for these several pieces of property with her own funds, and always exercised control, ownership, and proprietorship over them. She never intended to give these to her husband, but placed them in his name "because of her peculiar ideas that a husband should always appear as the head of the house." Both Mr. and Mrs. Parker always regarded all of this property as belonging absolutely to Mrs. Parker.

In October, 1909, Mrs. Parker loaned her husband $1,000, and, with her knowledge and consent, he invested it in the Colonial Chemical Company, of which he was a stockholder. On February 7, 1910, the plaintiff herein brought an action against this company, and attached certain property. The plaintiff's attorney and the officer making the attachment ascertained that Mr. Parker was the owner of record of the property on Dewey street and North avenue, and Mr. Parker having stated that he was the owner of this property they accepted him as surety upon said officer's receipt for the return of the property attached upon the faith of his ownership of record. Neither the plaintiff, his attorney, nor the officer had knowledge of any claim of Mrs. Parker upon the property. The plaintiff duly recovered judgment against the company, and execution upon the judgment was returned wholly unsatisfied. Thereafter the plaintiff recovered judgment against Mr. Parker on the receipt, and duly filed a Judgment lien upon the land on Dewey street, and this action is brought to foreclose the lien. In February, 1910, Mrs. Parker learned that this company was in financial troubles and that her husband was interested in it. The failure of the company and the loss of the $1,000 made her distrustful of her husband, and, apprehensive that he might engage in some future losing business enterprise and thereby jeopardize her real estate, she demanded of him its transfer to her. Mr. Parker, on March 18, 1910, through an intermediary, conveyed the property on Dewey street and North avenue to Mrs. Parker.

This was the consideration for the transfer, and not the payment of the $1,000 loan to Mr. Parker by Mrs. Parker. Mrs. Parker, at the time of this transfer, did not know that her husband had signed the receipt, nor that he had creditors other than herself and these mortgagees, and she acted, in demanding and accepting the transfer, in good faith and without an intention to defraud. In fact, at the time of the transfer to Mrs. Parker, Mr. Parker owed no debts except said $1,000, and had no visible property except said real estate, and the execution upon the judgment was returned wholly unsatisfied. The property on Dewey street is worth $1,000 above the incumbrance, and Mrs. Parker has, since the transfer, realized $1,500 above the incumbrance upon the North avenue property.

Frank L. Wilder and Henry Greenstein, both of Bridgeport, for appellant.

John P. Gray, of Bridgeport, for appellees.

WHEELER, J. (after stating the facts as above). For over 20 years Mrs. Parker permitted her real estate in Bridgeport to stand of record in her husband's name; mortgages thereon to be assumed by him, or made as part of the purchase price; conveyances thereof to he made, and mortgages to be placed thereon by him. As to all the world the public land records proclaimed him the owner. The plaintiff accepted him as a surety upon an officer's receipt, given in place of an attachment secured by the plaintiff upon certain property, in reliance upon his ownership of this property as disclosed by the public records and as stated by him. In fact, his wife was the owner of this property. And the question at issue is whether the transfer to her of this property, made subsequent to the contingent liability incurred by her husband as a surety, and accepted by the plaintiff in reliance upon his ownership, as disclosed by the public records and declared by him, is superior to the right in the property of the plaintiff.

The plaintiff claims that Mrs. Parker is estopped from setting up her claim of ownership ahead of his claim against the surety which he has reduced to Judgment, and that, as against him, the transfers to her were, in law, constructively fraudulent The foundation of this claim must rest upon the assertion that the plaintiff was, at the inception of the suretyship, a creditor of Mr. Parker.

The liability of Mr. Parker as a surety was contingent, though the receipt was absolute in terms. Fowler v. Bishop, 31 Conn. 562.

The relation of debtor and creditor between Mr. Parker and the plaintiff arose at the moment he became a surety. This liability was, in law, as assured as though the plaintiff had then sold Mr. Parker a bill of goods or loaned him a sum of money. Debt, in the sense in which it must here be regarded, denotes "any kind of a just demand."

We have held that one who holds an unliquidated claim against another is his creditor, under the foreign attachment statute. New Haven Sawmill Co. v. Fowler, 28 Conn. 108. So far as we are aware, the authorities generally hold the person for the payment of whose debt another has become contingently liable to be a creditor. Thus in Thompson v. Thompson, 19 Me. 244, 251, where a bond with surety was given by a guardian to secure the ward against official neglect or misconduct, it was held that the relation of debtor and creditor arose at the time of the signing of the bond, and that the obligee or those whom the bond is designed to protect might impeach any conveyance made after its date, though prior to any breach of the bond. So it was held the holder of a promissory note was a creditor of such indorser or guarantor thereon, notwithstanding the liability of an indorser or guarantor was contingent, within the provisions of the statute avoiding all gifts made to defraud creditors. Crocker v. Huntzicker, 113 Wis. 181, 88 N. W. 232. So it was held a landlord was an existing creditor of his tenant as to rent to become due under the lease, and therefore a voluntary conveyance by the tenant may be set aside, and the property so conveyed subjected to the landlord's claim for rent falling due after the conveyance. O'Brien et al. v. Whegain et al., 41 N. Y. Supp. 40. In Hanna v. Hurley, 162 Mich. 601, 605, 127 N. W. 710, it was held that an obligee on a bond given for costs might have set aside a conveyance of stock, contrary to the bulk-sales act, though the liability of a surety was contingent at the time of sale. The court said: "It is urged by appellant that George D. Hanna's liability upon the bond could not be fixed until judgment upon appeal, and therefore that the obligee in the bond was not, at the time of the sale, one of his creditors. * * * It cannot be said that George O. Hanna's liability was not fixed at the moment he signed the bond. It was fixed in amount, though contingent upon the failure of his principal to prosecute his appeal and reverse or pay the judgment."

Most of the cases where the question of when a contingent liability arose are those between a surety and the principal obligees upon a bond or other instrument; or between an indorser or guarantor and maker, where the one contingently liable for the debt of another has paid it, and is seeking to recover of the principal of the bond or other instrument; or the maker or guarantor of the note or other instrument. Our investigation satisfies us that the law is well settled that the liability begins when the engagement of the surety, indorser, or guarantor begins. Washington, Adm'r, v. Norwood, 128 Ala. 383, 389, 30 South. 405; Hatfield v. Merod, 82 Ill. 113: Dudley v. Buckley, 68 W. Va. 630, 70 S. E. 377; Graeber v. Sides, 151 N. C. 596, 66 S. E. 600; Whitehouse v. Bolster, 95 Me. 458, 460, 50 Atl. 240; Fortune v. Cassidy et al., 140 Ill. App. 580; McLaughlin v. Bank of Potomac, 7 How. 220, 12 L. Ed. 675; Van Wyck v. Seward et al., 18 Wend. (N. Y.) 375. The obligation of Mr. Parker, as surety, attached when he signed the receipt; the relation of debtor and creditor, between the surety and the plaintiff, arose at that time.

We are now to inquire whether the plaintiff creditor can cause to be set aside a conveyance by his debtor to the debtor's wife of real estate, of which the real ownership was in the wife, but the legal title to which had been placed in the husband, and so appeared of record for many years, and, in reliance upon the record title and the declaration of ownership by the husband, the plaintiff had extended to him credit. The defendant wife was without intent to wrong the plaintiff, and without knowledge...