
    Babcock v. Jones et al.
    
    
      (Supreme Court, General Term, First Department.
    
    December 31, 1891.)
    1. Fraudulent Conveyances—Confidential Relations—Continuing Injunction.
    Although a husband, as guardian of his wife, was indebted to her in a much larger amount than the value of all his property transferred by him to her, where the facts indicate an intent to defraud creditors by such transfer, such as the transfer of personal jewelry and office furniture without change of possession, a temporary injunction restraining the transfer of the personal property by the wife will be continued pending final hearing.
    3. Same—Real Estate—Lis Pendens.
    The injunction should not be continued as to the real estate transferred, the filing of the complaint, with notice of Us pendens, being sufficient for plaintiff’s protection.
    Appeal from special term, Hew York county.
    Action by Edward 0. Babcock against Millard R. Jones and another to set aside an alleged fraudulent transfer of real and personal property. From an order continuing an injunction, defendants appeal.
    Affirmed, with modification.
    Argued before Van Brhnt, P. J., and Ingraham and Daniels, JJ.
    
      Robert B. Ailing, (-Jerome Buck, of counsel,) for appellants. William B. Ellison, for respondent.
   Daniels, J.

Hear the time when the judgments were recovered against the defendant Millard R. Jones, and apparently in the expectation of their early recovery, he conveyed and transferred all his available property to his wife, Clara H. Jones. These conveyances and transfers were alleged, in support of the action, to be fraudulent against the plaintiff as a judgment creditor whose executions against property upon the judgments had been returned unsatisfied. The facts concerning the disposition of the debtor’s property indirectly and directly to his wife are disclosed by his examination in supplementary proceedings, and also by his affidavit and the affidavit of his wife used in resisting the motion to continue the injunction; and while they prove the fact to be that he, as the guardian of his wife, had become liable to her for a much larger amount than the value of all the property conveyed and transferred to her, there is still evidence tending to establish the conclusion that the property, in part, at least, was conveyed and transferred to her to prevent its appropriation by creditors to the payment of their debts, and that intent, even where there is a corresponding indebtedness intended to be satisfled by the conveyance and transfer of the property, will invalidate as to creditors the instruments affected by the intent which may be made and delivered. Billings v. Russell, 101 N. Y. 226, 4 N. E. Rep. 531. To discover the existence of this unlawful intent, the transactions between the husband and wife are required to be closely watched and clearly scrutinized. Manchester v. Tibbetts, 121 N. Y. 219-222, 24 N. E. Rep. 304. And the facts indicating the" existence of such an intention in this instance are that the judgment debtor intended to transfer and convey to his wife all his available property, which in part consisted of his personal jewelry or ornaments, and his office furniture, which furniture never passed into the possession of his wife. These acts, including the transfer of the jewelry and the office furniture, appear, as the case has been now presented, to have been actuated more by the design to avoid their seizure under execution than to satisfy or extinguish the indebtedness which existed in favor of his wife from his use and consumption of her property, which had been intrusted to him as her guardian. It is not necessary that this intent to hinder, delay, or defraud creditors shall be proved by direct evidence, but it is sufficient that it may be inferred from circumstances tending to establish the correctness of that conclusion; and these circumstances have an unmistakable tendency in that direction, sufficiently so to require the continuation of the injunction so far as it restrains the disposition of the personal property, or its proceeds, received in this manner by the debtor’s wife. It is not intended, however, to be held that this evidence will conclusively establish the existence of a fraudulent intention. All that it is necessary now to hold is that, as the facts have been made to appear, it sufficiently indicates that intention to justify the continuance of the injunction restraining the disposition of the personal property. But as to the real estate brought into controversy in the action, the title to which has become vested in the debtor’s wife, the injunction was needless, for there the creditors’ rights are amply provided for by the statute in permitting the complaint to be filed, together with a notice of the pendency of the action, containing a description of the property. So far as the injunction relates to the real estate, it should be modified by vacating that part of it, but as to the personal property, including the proceeds of any property which may have been sold or otherwise converted by the defendant Clara H. Jones, the injunction should be continued; and, as so modified, the order should be affirmed, without costs of this appeal to either party.

Van Brunt, P. J., concurs in the result.

Ingraham, J.

I concur in the conclusion arrived at by Mr. Justice Daniels on the ground that, under the circumstances disclosed, an injunction to restrain the defendant Clara H. Jones from disposing of the personal property received by her from her husband until the trial of the action was not an improper exercise of the discretion of the court at special term. I do not wish to be understood, however, as holding that upon the facts presented the court would be justified in granting a judgment which would direct the application of the property in question to the payment of the judgment referred to in the complaint.  