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of commissioners were taken by authority | fully taken from her by the defendant, and of the act of the legislature of May 18, 1869, converted to its use. The defendant's anand authorized the issuing of bonds running swer justified the taking under certain judgfor 20 years. The bonds in suit recite that ments and executions against one O. M. Stanthey were issued by authority of that act. ley, upon allegations that the property beThey bear date and were executed before the longed to the judgment debtor, and had been passage of the act of May 12, 1871. They conveyed by him to the plaintiff in fraud of are void upon their face, (Potter v. Town of the rights of his creditors. Upon a trial of Greenwich, 26 Hun, 326; affirmed, 92 N. Y. the issues, the jury rendered a verdict for the 662,) and were not, in my judgment, made plaintiff, and the judgment entered thereon valid by the act of the legislature last cited. was affirmed by the general term. This apThe shortening of the period of payment de- peal is sought to be supported by the claim prived the tax-payers of the town of substan- that certain circumstances, hereinafter retial benefits under the statute, intended to ferred to, afforded conclusive evidence of a provide for the payment of the bonds, and is fraudulent intent, and that the judgment more than a mere regularity. The legisla- should therefore be reversed, notwithstandture had no power to authorize a loan by the ing the verdict of the jury in favor of the town to the railroad company without its con- plaintiff. The plaintiff made title to the sent, (People v. Batchellor, 53 N. Y. 128; property through an alleged purchase upon Horton v. Town of Thompson, 71 N. Y. 513;) an auction sale under a chattel mortgage exand the act of May 12, 1871, cannot be con-ecuted February 7, 1879, by O. M. Stanley to strued as applicable to bonds executed pursuant to consents given before its passage, and which related to entirely different obligations. For these reasons I think the judgment should be reversed.

(115 N. Y. 122)

STANLEY V. NATIONAL UNION BANK et al.1 (Court of Appeals of New York. June 11, 1889.)

her, she being his wife, to Helen Stanley and Florence Stanley, his daughters, Mrs. Ryder and Mrs. Matteson, sisters of his wife, Mary Weaver, his wife's mother, one George Babbitt, and Mrs. Membry, to secure the payment, one day after date, of certain debts, therein described, owing by him to the several mortgagees, respectively, amounting in the aggregate to upwards of $2,700. This FRAUDULENT CONVEYANCES-EVIDENCE. mortgage was duly delivered by the mort1. Plaintiff, in an action for conversion, claimed gagor, at the time of its execution, to the the property as purchaser under a mortgage. It plaintiff as the assumed agent of the several appeared that the owner mortgaged the property mortgagees named therein, and was duly filed in question to secure certain debts mentioned in in the clerk's office of the town where the the mortgage to plaintiff, who was his wife, and others; that on default plaintiff, acting for herself mortgagor resided on the day of its date. In and some of the other mortgagees, caused the prop- June, 1879, default having been made in the erty to be sold under the mortgage; that plaintiff payment of the debts secured thereby, the became the purchaser, gave her notes to the other mortgagees for their proportionate shares of the mortgagee Babbitt, and the plaintiff, in her purchase price, which was accepted by them, and own behalf and as the agent of the other made payments on the notes. On the day before mortgagees, caused the property to be taken the sale a receiver of the mortgagor's property, on the mortgage, and to be advertised for sale appointed in pursuance of a judgment against him, took possession of his farm, which the mortgagor at public auction. On June 11, 1879, upon theretofore had cultivated and occupied as a dairy, such sale, the plaintiff, as the highest bidder, using the mortgaged property for that purpose. became the purchaser of that portion of the The receiver leased the farm to plaintiff, who continued in her name the business of the farm and property involved in this action. By this dairy, using the property purchased at the fore-sale the interest of the mortgagor in the propclosure sale. She was assisted by her husband, and the profits of the business were partially used to support the family. Held that, the debts secured by the mortgage being shown to be bona fide, there was no evidence that plaintiff acquired title in pursuance of an intent to defraud creditors.

2. The facts were sufficient to justify a finding there had been such an "actual and continued change of possession" of the property as required by Rev. St. N. Y. (7th Ed.) p. 2328, § 5.

3. The fact that plaintiff's husband was her agent in carrying on the business of the farm is competent evidence on the question of fraud, but is not

conclusive of fraudulent intent.

Appeal from supreme court, general term, Fourth department.

Hannibal Smith, for appellants. John C. McCartin and Levi H. Brown, for respon

dent.

erty was extinguished, and the plaintiff became the owner thereof through the execution of the power of sale created by the mortgage. The purchaser thereby became liable share of the purchase price of the property, to pay the other mortgagees their proportional and the mortgage debt was paid to the extent of the sum bid for the property. Since the sale the title of the plaintiff to the mortgaged property has been based upon the purchase thereof by her at a public sale, lawfully conducted, and not upon the mortgage.

The action of the plaintiff in selling the property in behalf of the several mortgagees contrary, has been ratified and approved by was never disapproved by them, but, on the them so far as brought to their knowledge. RUGER, C. J. The plaintiff sought in this After the sale she executed and delivered to action to recover the value of certain per- tion of Babbitt and Mrs. Membry, her seveach of them, respectively, with the excepsonal property alleged to have been wrong-eral promissory notes for their proportionate

1Affirming 41 Hun, 640, mem.

shares of the proceeds of such sale, and the

same were accepted and retained by them. I consideration, no rule of law prevented the The plaintiff also made payments upon sev- insolvent debtor from paying one creditor in eral of the notes so given. The property in preference to another, or enabled the unprequestion consisted of cows, horses, wagons, ferred creditors to take away from those seharnesses, lumber, grain, and farming uten- cured a preference honestly received or obsils used in cultivating and carrying on a tained. dairy farm owned by the mortgagor, and which was continued to be owned and occupied by him until June 10, 1879. Previous to that date, upon proceedings duly had upon a judgment recovered by one Hubbard against him, one E. Collins Baker was duly appointed receiver of all the property and effects of said Stanley. Upon that day the receiver took possession of the farm, with Stanley's consent, and on the same day executed a lease thereof to the plaintiff for the term of one year, and delivered the lease and possession of the farm to her. Subsequent to such lease and sale the plaintiff assumed to occupy and carry on the farm and dairy. The milk produced by the cows, the main product of the farm, was delivered at the cheese factory in her name, and she received the proceeds thereof, as well as of other produce of the farm. In all this she was aided and assisted by her husband, and the profits of the business were, to some extent, used in the support of the family.

The

The main contention on the part of the defendants on the trial was that some of the debts included in the mortgage were fictitious and fraudulent. Among others, those of Mary Weaver, his wife, Mrs. Ryder, Mrs. Matteson, and a portion of the debts to the two daughters were alleged to be of that character. If this claim was well founded, it would undoubtedly invalidate to a certain extent the plaintiff's title to the property. A brief history of these claims will dispose of this contention. In 1869, O. M. Stanley, in consideration of money and property of the value of upwards of $4,000, transferred to him by Mary Weaver, covenanted to support her and her daughter, Mary Ann Weaver, during their respective lives. This covenant he performed until the death of Mary Ann, in 1874, and after that time he supported Mary Weaver until the execution of the mortgage in question. Realizing, when compelled to surrender his property in payment of his It will also reflect some light upon the debts, that he would be unable to perform questions determined by the jury if we refer his contract with Mary Weaver, and after to the situation of the judgment debtor at the consultations with her, he agreed to secure time this mortgage was made. Previous to her this sum of $1,000 as damages for the January, 1879, he had for many years appar-apprehended breach of his contract, and she ently been a prosperous farmer, and in the agreed to receive that sum therefor. habit of indorsing quite largely for a brother. trial court submitted the question to the jury In January, 1879, his brother became insolv- to determine whether that sum was a reasonent, and failed, and upon an investigation able amount to insure a comfortable support by O. M. Stanley of his liabilities at that time to Mary Weaver during her life, and whethhe found himself, by reason of his liabilities er the agreement to secure it was entered inas indorser, insolvent, and unable to meet to between the parties in good faith, and his obligations. He then owned the property without intent to defraud the creditors of in question and a large amount of real estate Stanley. The jury found the good faith and comparatively unincumbered. Being unable honesty of the transaction, and we think the to pay all his creditors, and threatened with finding was warranted by the evidence. judgments and executions, he resolved to de- The creditor here had a legal contract, and vote his property to the payment of those was lawfully entitled to take precautions to claims which he considered most meritorious insure its performance. There is no rule of and deserving of preference by him. He law or ethics which required her to sit idly, thereupon mortgaged his real estate to bor- by and witness the efforts of contending credrow money and secure debts, and devote its itors to appropriate the property of her debtproceeds to the payment and security of debts or, without an effort to secure her own lawwhich he had incurred on behalf of his broth-ful demand. The claims of Angeline Staner, and gave the chattel mortgage in ques- ley, Mrs. Ryder, and Mrs. Matteson, the three tion to secure the debts mentioned therein. sisters of Mary A. Weaver, grew out of the If he honestly owed these debts, and gave the following circumstances: Previous to 1874, mortgage in good faith with the intention of Mary Ann Weaver received $1,000 as her share securing their payment, there was no legal of a brother's estate, and loaned that sum to reason why he could not do so. The fact that O. M. Stanley. In 1874, Mary Ann died, the several mortgagees were members of his leaving her mother and three sisters survivfamily, or that the transfer to them of this ing. During her life-time O. M. Stanley had property would necessarily prevent other paid $300 of the $1,000 to her brother George creditors from reaching it by execution, pre- as a gift, at her request, and had paid to Mary sented no legal objection to the validity of such Ann Weaver the interest on the balance of transfer. While the circumstances referred the indebtedness. Letters of administration to would naturally call for close scrutiny and were not issued on Mary Ann's estate, but criticism, for the purpose of discovering the next of kin voluntarily settled the same whether any scheme to defraud lurked under among themselves. In January, 1875, O. the form of the transaction, yet if the trans- M. Stanley gave Mary Weaver, as the next fers were made in good faith, for an honest of kin of her daughters's estate, his note for

$700, being the balance remaining unpaid | father under an agreement that he should reupon the loan. During the same year, Mary pay such loans when demanded, with interest Weaver, desiring to give to her three daugh- thereon. The larger part of the debts secured ters, Mrs. Stanley, Mrs. Ryder, and Mrs. Matteson, the amount of O. M. Stanley's obligation to her, upon his promise to pay one-third of such sum to each of her said daughters, destroyed the $700 note; and thereupon he executed and delivered to Mrs. Ryder and Mrs. Matteson his notes for $250 each, and promised to deliver a similar note to his wife, which however, he neglected to do until the time the chattel mortgage was executed. The debts to Mrs. Stanley, Ryder, and Matteson, mentioned in the mortgage, consisted of the balances remaining unpaid on their several claims above described. The verdict of the jury has settled the bona fides of their several debts.

to Florence and Helen consisted of such loans. A portion of the debt to Florence consisted of a sum included as payment for household services rendered by her for her parents under an agreement that she should be paid therefor the same as other servants. A small portion of these services were rendered before she arrived at her majority. The validity of these debts to a certain extent depends upon the question whether a parent has power to manumit an infant child, and vest her with authority to acquire property and possess the same in her own right. We do not understand that the appellant seriously contests the question that such a contract is valid if made in good faith, and vests the infant with O. M. Stanley, from the first, treated the the right to recover payment for services sum of $1,000 as a loan to him by Mary Ann rendered by her, and to hold the proceeds as Weaver, and during her life-time repaid $300 | against all persons. Whether admitted or of the sum loaned upon her order. After her not, we suppose it to be well settled that a death, in 1875, he gave his note for the bal-parent may emancipate an infant child, and ance of the loan, as an asset of Mary Ann Weaver's estate, to the person lawfully entitled to it, and that note become a valid obligation against him in the hands of its payee. This note the payee surrendered to him in consideration of his promise to pay the amount thereof in equal parts to the three daughters of Mrs. Weaver. This promise created a legal obligation against O. M. Stanley in favor of the three daughters, respectively, and a valuable consideration for the security given for its payment.

confer a right upon it to acquire property and possess it as against all persons whatsoever. As said by Judge SUTHERLAND in Shute v. Dorr, 5 Wend. 204: "A parent may relinquish his right, and authorize his child to labor for himself, and receive and appropriate to his own use whatever he may earn." See, also, Fort v. Gooding, 9 Barb. 375; Lind v. Sullestadt, 21 Hun, 366.

No lawful objection, therefore, arises over the legality of the debts included in the mortgage for the benefit of the daughters, provided they were found to have been secured in good faith, without intend to defraud creditors. Neither is any question made but that the debts included therein for Mrs. Membry and Mrs. Babbitt were valid and lawful debts, justly owing by the mortgagor. It is claimed, however, that the debt of Bab

There is no foundation in the facts of the case for the appellants' claim that the sum in question could be considered as a gift from Mary Ann Weaver to 0. M. Stanley, and there was no basis for the charge in respect thereto requested of the trial court. O. M. Stanley, long before his embarrassments arose, treated the sum as a loan, and his in-bitt was covered by a judgment in his favor, terpretation of the transaction made it a valid claim against him, and necessarily against all persons claiming through or under him.

constituting a lien upon real estate sufficient to satisfy the same; and therefore, as matter of law, it is argued that its inclusion in the We are also of the opinion that the claims mortgage could not have been made in good of the two daughters, Helen and Florence, faith, with an honest intent to secure the were lawful demands, and enforceable against debt. We are of the opinion that this arguthe mortgagor. The evidence in respect to ment cannot be supported. At the time this them tended to show that they had received mortgage was given the debtor was in posa good education, partially at the expense of session of his property, and having the right their father during their minority, and, hav-to dispose of it in payment of his debts as he ing arrived at an age when they were quali- saw fit, provided he did so in good faith. fied and capable of supporting themselves, He could lawfully have transferred to Babproposed to engage in the business of school-bitt directly any of the property included in teaching. It was then agreed between them, the mortgage, in satisfaction of his debt, or respectively, and their father, that they should thereafter take care of and support themselves, and that they should be entitled to their time, and all that they might thereafter earn by their services. This contract was made in 1874, when the father was supposed to be solvent, and able to pay his debts. From this time forward they were engaged away from home, much of the time in the occupation of teachers, in which service they earned moneys which were loaned to their

make any other arrangement which should render its appropriation upon the debt certain and secure. This worked no injury to unsecured cre litors, for if the debt should be paid from the mortgaged property it would reduce the lien upon other property, and expose the surplus thereof to the claims of such creditors. But even if it was the debtor's object to enhance the security of other liens on real estate, by paying some of them from the personal property, it was entirely lawful

and competent for him to do so. So long as | question of fact, to be determined by a jury, all of the property was devoted to the pay- whether she was in fact in possession of the ment of just debts, it affords no legal pre- property or not. Here the wife took possessumption of fraud that a creditor was given sion of the mortgaged property; advertised the right to resort to either of two separate it for sale, and sold it, at public auction; she funds to secure payment of his debt. The notoriously became its purchaser on such sale; question as to whether the debts included in she acquired from its lawful owner the posthe mortgage were valid liabilities of the session of the farm on which it was used; mortgagor, and the security therefor taken in she delivered the milk produced from the good faith, without intent to hinder, delay, cows in her own name at the cheese factory or defraud creditors, having been submitted where it was manufactured; and drew the to the jury under a charge that was quite un-price derived therefrom, and disbursed it as exceptionable, its finding thereon is conclusive upon the parties as to the questions of fact involved, and establishes the validity of the mortgage.

her own property. No element of secrecy entered into the transactions, and everything relating thereto was openly and publicly done, under a claim of legal right. We have no doubt that these facts fully justified the finding of the jury that there had been an actual and continued change of possession of the property mortgaged, within the meaning of the statute. The case of Steele v. Benham, 84 N. Y. 634, does not conflict with these views. In that case no circumstances were shown to support the claim of a change of possession. It rested wholly upon the allegation of the assignee of the mortgage that she had taken

still remained unsold, in the mortgagor's possession, upon his farm, and was devoted to his use. It was quite properly held in that case that no change had been effected, and that the statute required a refiling of the mortgage within a year to perpetuate its lien.

It is also contended that upon the facts no such actual and continued change of possession of the property has been proved as obviated the requirement of the statute providing for the refiling of a mortgage to perpetuate its lien. We think the facts justified a finding of the jury that there had been the change of possession required by the statute. The property having been taken possession of by a bailiff of the mortgagees, and duly advertised and sold at public auction, and the plain-possession of the mortgaged property, but it tiff having become the purchaser thereof, she became invested with the lawful title thereto as against the creditors of her husband, and effected a valid change of possession, subject only to the obligation to show that the same was made in good faith, and without intent to defraud creditors. Section 5, tit. 2, c. 7, pt. 2, 3 Rev. St. (7th. Ed.) p. 2328. A It is also claimed by the appellants that the married woman, under the statute, has capac- receiver acquired no right to lease the farm ity to engage in business for herself, to acquire in question by reason of some defect in his property, and possess it, independent of the official bond. If there was any defect in such control or interference there with by her hus- bond,-of which, upon the evidence, we have band. As a necessary incident of such right, some doubt,-we do not think the defendants she is competent, although living with her were in a position to raise the question. The husband, to secure and maintain legal pos-receiver had by order of the court been duly session of property acquired by her, free and vested with title to the debtor's property,independent of the rights of persons claiming had, as such, taken possession of his real esan interest therein through or under the hus- tate, and leased it to a tenant, who was put band. When the sale of this property was in possession of the property by him. This made she was in possession of the farm upon lease undoubtedly conveyed the receiver's which it was situated, under a conveyance right of possession, and was valid as against thereof from a receiver having lawful posses- all persons assailing it collaterally. Even if sion and legal right to lease it, and when she the appointment of the receiver was, by reahad purchased the personal property it imme- son of the irregularities referred to, voidable, diately became subject to her dominion and the fact that the lessee had taken possession control as the owner of the real property up-under a lease from him would justify such on which it was situated, and in whose cul-possession until the lease was adjudged to be tivation and enjoyment it was employed. unlawful at the suit of some person rightfulKnapp v. Smith, 27 N. Y. 278. It is quite ly challenging its validity. The question on impossible to conceive how the plaintiff could maintain the rights conferred upon her by law without holding that she had the lawful possession of this personal property. Rowe v. Smith, 45 N. Y. 232. The law does not require a family to be broken up, or a wife to separate from her husband, to enable her to acquire and maintain possession of property lawfully owned by her. Her possession must be such as the circumstances of the case permit, and such as she is capable of taking and enjoying; and when she has done all that it is possible for her to do in this respect it is a

the trial was, who was, at the time of the sale of the mortgaged property, in fact occupying the premises? and the jury has found that the plaintiff was; and this finding, we think, is conclusive. The circumstance that the plaintiff's husband was employed as her agent in conducting the business of cultivating the farm after the property was acquired by her, is urged in many forms by the appellants as a reason for reversing the judgment. That such circumstance is competent evidence to show the intent of the parties upon a question of fraud has been adjudged in many

cases, but it has also been frequently decided | day of May, 1873, the plaintiff was the owner that it afforded no conclusive evidence of a of the canal-boat Jay Pettibone, its tackle and fraudulent intent. Knapp v. Smith, supra, furniture, and four mules and their harnesses Abbey v. Deyo, 44 N. Y. 344; Buckley v. then used in towing the boat. On that day Wells, 33 N. Y. 518. We think this case has a written contract was entered into between not, by reason of any circumstance called to the parties by which plaintiff agreed to sell our attention, been taken out of the operation to defendant this property for $6,000 which of the statute, which requires that "the the defendant agreed to pay in 12 equal inquestion of fraudulent intent in all cases stallments, with interest, the last payment arising under the provisions of this chapter falling due November 1, 1875. To secure the shall be deemed a question of fact, and not of payment of these sums defendant gave 12 law." Section 4, tit. 3, c. 7, pt. 2, 3 Rev. promissory notes. It was stipulated in the St. (7th Ed.) p. 2329. We could not say that written contract that defendant should have there was not evidence in the case upon immediate possession of the property, but which the jury was authorized to find the that title to the boat should not pass from the mortgage in question was executed and re- plaintiff to the defendant until the purchase ceived with an intent to defraud the credit- price was paid; but the contract contains no ors of the mortgagor. The circumstances provision in respect to the mules and their upon which such a finding might be based harnesses. At the date named defendant are particularly set forth and discussed by was the owner of the canal-boat Dr. M. S. the appellants' counsel in an elaborate brief, Kittinger, its tackle and furniture. To sebut its careful consideration compels us to the cure the payment of said $6,000 the defendant conclusion that the question of fraudulent mortgaged the property last mentioned to the intent was exclusively for the jury, and its plaintiff. On the 27th of June, 1876, there finding thereon cannot be disturbed. We was an unsettled account between these parmay go still further, and say that, under the ties, embracing many items extending through evidence in the case, we are of the opinion several years, and aggregating more than that the verdict accords with the probabilities $30,000, inclusive of the outstanding notes and justice of the case. We have carefully given by the defendant to the plaintiff for the examined the numerous exceptions appearing purchase price of said boat. At this time a in the record, and can find none worthy of dispute as to the state of these accounts arose serious refutation, except such as are covered between the parties, each claiming to be the by the discussion already had. We think, creditor of the other. On the day last named therefore, that the judgment should be af- the plaintiff advertised that, by virtue of the firmed. All concur. contract and chattel mortgage, he would sell the boats by public auction on the 7th of July, 1876, and at the same time seized the Pettibone, and held possession of it for one day. July 7, 1876, Hadcock, the defendant herein, began an action against O'Rourke, the plaintiff herein, setting up the existence of the aforesaid executory contract, the promissory notes and chattel mortgage, the open account, and alleged that he had fully paid for the boat, and prayed for an accounting, and for a judgment that O'Rourke surrender up the notes, chattel mortgage, and contract, execute to him a bill of sale of the Jay Pettibone, and that he be restrained from selling the property described in the contract and mortgage. An issue was joined in this action, which was referred to a referee, who found that the plaintiff, Hadcock, was still indebted to O'Rourke, the defendant, in the sum of

(114 N. Y. 541)

O'ROURKE v. HADCOCK. (Court of Appeals of New York, Second Division. June 18, 1889.)

CONDITIONAL SALE-RATIFICATION. Plaintiff sold to defendant a canal-boat, mules, and harnesses, retaining title to the boat as security for the price, and taking a mortgage on another boat owned by defendant as additional security. Afterwards plaintiff advertised that he would sell the two boats under the contract and mortgage respectively. On an accounting then had it was ascertained that part of the purchase price of the boat was still due to plaintiff. Before the day of the sale of the boats plaintiff, on the ground that defendant still owed him some of the purchase money, seized the mule and harnesses, the value of which exceeded the amount then due to plaintiff from defendant. After this plaintiff obtained possession of the boats in replevin, and sold them. Plaintiff's attorney, who attended the sale, testified that the mortgaged boat was sold because the other had not brought enough to satisfy the amount $126.38, and directed a judgment dismissing alleged by plaintiff to be due. Held, that plaintiff's acts showed that he elected to ratify the contract of sale, and, the value of the mules taken having discharged the balance due on the price, a judgment in the replevin suit awarding a return of the boats, with damages for their detention, to defendant was proper. BRADLEY, J., dissenting.

Appeal from superior court of Buffalo, general term.

the complaint, with costs. December 30, 1881, a judgment was entered pursuant to the report. July 21, 1876, the plaintiff claimed that the notes, or some part of them, were unpaid, and took from the defendant, and converted to his own use, without defendant's consent, said four mules and harnesses. On the next day, July 22, 1876, the plaintiff Appeal from a judgment of the general term advertised that he would sell, on July 28th, of the superior court of the city of Buffalo, at 10 o'clock A. M., the Pettibone, her tackle, affirming a judgment in favor of the defend- apparel, furniture, and the four mules and ant for $8,500 damages, and for the return of their harnesses, at public auction, by virtue two canal-boats, and, in case a return cannot of the executory contract of sale. And on be had, for their value, $1,400. On the 31st the same day, by a separate notice, advertised v.22N.E.no.7-3

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