Fox v. SizeLand

170 Misc. 390, 9 N.Y.S.2d 350, 1938 N.Y. Misc. LEXIS 2296
CourtNew York Supreme Court
DecidedNovember 12, 1938
StatusPublished
Cited by12 cases

This text of 170 Misc. 390 (Fox v. SizeLand) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fox v. SizeLand, 170 Misc. 390, 9 N.Y.S.2d 350, 1938 N.Y. Misc. LEXIS 2296 (N.Y. Super. Ct. 1938).

Opinion

Smith (E. N.), J.

This action was brought under section 273 of article 10 of the Debtor and Creditor Law to set aside a deed of real estate executed by Lucinda C. Weaver “ to the extent necessary to satisfy the claim of the plaintiffs ” as administrators of the estate of Alvin D. Fox, deceased, on the ground that it was fraudulent as against Alvin D. Fox or his estate for the reason that the grantor, by reason of such transfer, was rendered insolvent. No claim is made by the plaintiffs that there was any actual intent on the part of Lucinda C. Weaver, when she made this conveyance, to defraud Alvin D. Fox.

On the 27th day of July, 1929, said Lucinda C. Weaver executed and delivered to Alvin D. Fox a promissory note payable to his order on demand at the Jefferson County National Bank for the sum of $2,030, without interest. Mr. Fox died in the spring of 1930, and on the 15th day of November, 1930, letters of administration were issued to the plaintiffs, and they duly qualified as such administrators; on September 1, 1932, said Lucinda C. Weaver executed a promissory note, dated on that day, payable to the order of Alvin D. Fox estate, on demand, without interest, at the Jefferson County National Bank, for the sum of $2,030. This latter note is the foundation of this action. It is conceded by all parties that the note of July 27, 1929, bears the signature of Lucinda C. Weaver; it is not admitted that the note bearing date September 1, 1932, bears the signature of said Lucinda C. Weaver, but it is claimed that the note is a forgery. This note of September 1, 1932, is in the same form and for the same amount, to wit, the sum of $2,030, as the note of July 27,1929, admittedly a valid note. Each [392]*392of the notes purports to have been executed and delivered for value received.

The Alvin D. Fox estate stands in no other or different position than Alvin D. Fox would have stood had he lived, and the note in the hands of the estate, although made payable to his estate, is subject to any infirmity to which the note of which it was a renewal would have been subjected had Mr. Fox lived. There is no evidence to show that there was any infirmity in the note of July 27, 1929, nor has there been any effort on the part of the parties defendant here to show that there was any infirmity in the renewal note; the only claim is that the so-called renewal note does not bear the signature of Lucinda C. Weaver, deceased.

I have carefully examined and compared the signature on the original note with that on the renewal note and also with many other signatures of Lucinda C. Weaver which admittedly were valid signatures, and find that the note bearing date September 1, 1932, bears the signature of Lucinda C. Weaver. There is no other defense than that of forgery set up as against this note, and the plaintiffs having presented the note and the note purporting to have been given for a valid consideration, and there being no other attack upon it, the plaintiffs are entitled to judgment for $2,030 against the estate of Lucinda C. Weaver, and have laid the foundation for this action under said section 273 af article 10 of the Debtor and Creditor Law. This section reads as follows:

“ § 273. Conveyances by insolvent. Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent is fraudulent as to creditors without regard to his actual intent if the conveyance is made or the obligation is incurred without a fair consideration.”

Fair consideration is defined as follows in said Debtor and Creditor Law:

§ 272. Fair consideration * * * is given for property or obligation,
a. When in exchange for such property, or obligation, as a fair equivalent therefor, and in good faith, property is conveyed or an antecedent debt is satisfied, or
b. When such property or obligation is received in good faith to secure a present advance or antecedent debt in amount not disproportionately small as compared with the value of the property or obligation obtained.”
§ 271. * * * A person is insolvent when the present fair salable value of his assets is less than the amount that will be [393]*393required to pay his probable liability on his existing debts as they become absolute and matured.”
[392]*392Insolvency is defined in section 271 of said Debtor and Creditor Law so far as a person is concerned, as follows:

[393]*393These three sections, 271, 272 and 273, were added by chapter 254 of the Laws of 1925, effective April 1, 1925.

Section 278 of said Debtor and Creditor Law provides as to rights of creditors as fol ows:

“ 1. Where a conveyance or obligation is fraudulent as to a creditor, such creditor, when his claim has matured, may, as against any person except a purchaser for fair consideration without knowledge of the fraud at the time of the purchase, or one who has derived title immediately or mediately from such a purchaser,
a. Have the conveyance set aside or obligation annulled to the extent necessary to satisfy his claim, or
b. Disregard the conveyance and attach or levy execution upon the property conveyed.
“ 2. A purchaser who without actual fraudulent intent has given less than a fair consideration for the conveyance or obligation, may retain the property or obligation as security for repayment.”

A question has been raised as to whether this type of action survived the death of Lucinda C. Weaver.

Section 19 of the Personal Property Law provides, in the second sentence thereof: “A creditor of a deceased insolvent debtor, having a claim against the estate of such debtor exceeding in amount the sum of one hundred dollars, may, without obtaining a judgment on such claim, * * * for the benefit of himself and other creditors interested in said estate, disaffirm, treat as void and resist any act done or conveyance, transfer or agreement made in fraud of creditors or maintain an action to set aside such act, conveyance, transfer or agreement. Such claim, if disputed, may be established in such action. The judgment in such action may provide for the sale of the property involved, when a conveyance or transfer thereof is set aside, and that the proceeds thereof be brougnt into court or paid into the proper Surrogate’s Court to be administered according to law.”

The same remedy is provided in reference to fraudulent conveyances of real property by section 268 of the Real Property Law.

Neither section 19 of the Personal Property Law nor section 268 of the Real Property Law was repealed by chapter 254 of the Laws of 1925.

Certainly this right of action survived in cases of actual fraud on the part of a deceased, and I can see no reason for making any distinction between actual and constructive fraud.

Pomeroy, in his Equity Jurisprudence (Vol. 2 [4th ed.], § 922), states (at p. 1933): “ Constructive fraud is simply a term applied [394]

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Bluebook (online)
170 Misc. 390, 9 N.Y.S.2d 350, 1938 N.Y. Misc. LEXIS 2296, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fox-v-sizeland-nysupct-1938.