Morgan v. Potter , 24 N.Y. Sup. Ct. 403 ( 1879 )

Smith, J.:

The finding of the referee that the transfers in question wore made Avithout intent to defraud creditors is against the evidence furnished by the undisputed facts of the case. Potter, being insolvent, transferred his property to his Avife and child, Avithout any consideration, except the agreement between himself and his Avife to live separate and apart from each other, Avhich Avas, of itself, unlawful. He retained nothing to satisfy his creditors. The bare statement of the case shows a fraudulent design oil his part. Eor the necessary consequence of the transaction Avas to deprive his creditors of the moans of collecting their debts, and as he must have been presumed to have foreseen and intended the inevitable result of his oavu act, the transaction itself is conclusive evidence of a fraudulent intent. (Per Sutherland, J., in Babcock v. Eckler, 24 N. Y., 632.) Besides, Potter testified that he transferred the property to his Avife because he preferred that his family should have it rather than its creditors. The transfers, regarded as purely voluntary conveyances, were fraudulent as against the creditors of Potter, he being insolvent. [Carpenter v. Roe, 10 N. Y., 227; Cole v. Tyler, 65 id., 73.)

The agreement with his wife furnished no consideration as against the claims of creditors. The contract to live separate was one wbieb the courts will not uphold. (Rogers v. Rogers, 4 Paige, 517, Cropsey v. McKinney, 30 Barb., 47.) Even if it were valid, the equities of the case, as against the creditors of the husband, would be no stronger than if he and his wife were living together amicably, and he had voluntarily conveyed the property for the support of herself and child.

The respondents take the position that the receiver has not filed a bond as required by the order appointing him, and that consequently ho is not a receiver, and cannot maintain the action. It appears that ho executed an undertaking or obligation, which was not sealed. In that respect the instrument was irregular, but, we think, the judgment-debtor only can take advantage of the irregularity, and he has not appealed. This view of the matter is maintained by the cases of Tyler v. Willis (33 Barb., 327), and Underwood v. Sutcliffe (10 Hun, 453).

Johnson v. Martin (1 New York Supreme Court Reports [T. & C.], page 504), relied upon by the respondents’ counsel, is not necessarily in conflict with the cases above cited, as for aught that appears in that case, the objection was taken by the judgment-debtor. And it does not appear that the receiver had obtained an order of the court giving him leave to sue, as is the case here.

The judgment should be reversed, and a new trial ordered before another referee, costs to abide event.

Talcott, P. J., and Haudin, J., concurred.

Ordered accordingly.