Marcus v. Kane

• Decision Date: 04 April 1927
• Docket Number: No. 186.,186.
• Citation: 18 F.2d 722
• Parties: MARCUS v. KANE et ux.
• Court: U.S. Court of Appeals — Second Circuit

18 F.2d 722 (1927)

MARCUS v. KANE et ux.

No. 186.

Circuit Court of Appeals, Second Circuit.

April 4, 1927.

Cohen, Cole & Weiss, of New York City (Harry J. Leffert, of New York City, of counsel), for appellant.

Holley & Oxenberg, of New York City (Myle J. Holley, of New York City, of counsel), for appellees.

Before HOUGH, MANTON, and SWAN, Circuit Judges.

MANTON, Circuit Judge.

John Borger recovered a judgment in the District Court of the United States against James J. Kane and Emil Kane in the sum of $12,127.25 for personal injuries which he sustained on the 8th of October, 1921. On this day, the appellee James J. Kane and his two sons were the owners of real property in the city of New York. On August 1, 1922, James J. Kane conveyed to his wife, the appellee, Mary Agnes Kane, his real estate or his interest therein. After recovery of the judgment, on August 27, 1925, execution on the judgment was issued to the marshal for the Eastern District of New York where James J. Kane and Emil Kane resided. The execution was returned unsatisfied. Proceedings supplementary to the execution were had, and the present receiver was appointed in such proceeding. He sues to set aside the transfer, contending that it was made with the intent to hinder, delay, and defraud his creditor, Borger, who has a lawful claim for damages and was a creditor at the time of the transfer. The delay in Borger's obtaining a judgment was due to the condition of the court calendars and his inability to be reached for trial before August 27, 1925.

The property being situated in the state of New York, whether or not it may be set aside as fraudulent as against this creditor must be determined by the rule of law applicable thereto as established in the state of New York. Castellano v. Osborne (C. C. A.) 16 F.(2d) 187. At the trial, certain admissions of the allegations of the complaint were made and judgment was rendered without further testimony. The transfer by Kane to his wife without consideration was admitted; also it was not denied that judgment was obtained by Borger as referred to, and, further, that appellee, in addition to the transfers to his wife, transferred other properties to James J. Kane & Sons, Ship-wrights, Inc. It was admitted that the execution of the marshal was returned unsatisfied, and therefore it was established that the judgment could not be collected as against any property which appellee held at the time the execution against property was issued.

Section 263 of the New York Real Property Law (Consol. Laws, c. 50), effective on the date of transfer, provides:

"A conveyance or assignment in writing or otherwise, of an estate, interest, or existing trust in real property, or the rents or profits issuing therefrom, or a charge on real property, or on the rents or profits thereof, made with the intent to hinder, delay or defraud creditors, or other persons of their lawful suits, damages, forfeitures, debts or demands, or a bond or other evidence of debt given, suit commenced, or decree or judgment suffered, with the like intent, is void as against every person so hindered, delayed or defrauded."

The question is presented whether Borger, at the time of this transfer, may be deemed a creditor within the statute who has been hindered, delayed, and defrauded. The learned court below found that the transfer was without consideration and therefore presumptively fraudulent (Ga Nun v. Palmer, 216 N. Y. 603, 111 N. E. 223; Carstairs v. Spear, 201 App. Div. 418, 194 N. Y. S. 134), but held that, since Borger was a plaintiff in a tort action at the time of the transfer and since he had not reduced his claim to judgment, he was not a creditor within the rule of law obtaining in New York state. We held that a transfer similarly made to a wife, previous to judgment, was fraudulent as against a contract obligation. Castellano v. Osborne, supra. We think Borger was a creditor within the terms of the statute from the day of his injury. "Creditor," as used in the statutes against fraudulent conveyances, which authorize any creditor of the grantor to maintain a suit to set the same aside, means one having a contingent liability as well as one whose claim is certain and absolute. When colloquially expressed, a creditor may be considered one to whom money is due, but, in the more extensive sense of the term, a creditor is one who has a right to recover money of another on any account whatever. Guaranty Trust Co. v. Galveston City R. Co. (C. C. A.) 107 F. 311. One who has a right by law to demand either presently or at some future contingency the fulfillment of any obligation or contract, or one who has a legal right to damages capable of enforcement by judicial process, is a creditor. Bishop v. Redmond, 83 Ind. 157; Keith v. Hiner, 63 Ark. 244, 38 S. W. 13; Cardenas v. Miller, 108 Cal. 250, 39 P. 783, 41 P. 472, 49 Am. St. Rep. 84; Walsh v. Miller, 51 Ohio St. 462, 38 N. E. 381. The word is susceptible of latitudinous construction. So a claim entered for just compensation as damages for injury makes the claimant a creditor. The Appellate Division of the Supreme Court of the state of New York held in Light v. Fischer, 162 App. Div. 483, 147 N. Y. S. 683, that a plaintiff who suffered personal injuries prior to the transfer and who subsequently obtained a judgment might successfully set aside a transfer made without a valuable consideration as a hinderance and delay and fraud against him. In Meyer v. Mayo, 196 App. Div. 78, 187 N. Y. S. 346, a transfer made in fraud of one who held a claim for injuries done her for a tortious act was set aside where the transfer was made after...