
    Edward O. Babcock, Resp’t, v. Millard R. Jones et al., App’lts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed December 31, 1891.)
    
    1. Fraudulent conveyance.
    Where property is conveyed or transferred with intent to prevent its-appropriation by creditors to the payment of their debts, such intent will invalidate the instruments of conveyance or transfer, even where there is a corresponding indebtedness intended to be satisfied by such conveyance, or transfer.
    2. Same—Injunction pendente lite.
    The defendant Jones was indebted to plaintiff and shortly before judgment was obtained made a conveyance and transfer of all his property, consisting of real estate, jewelry and office furniture, to his wife, to whom he was liable for moneys received by him as her guardian; but the facts-shown tended to prove that such transfers were intended-to prevent seizure of the pioperty under execution. Held, that the facts disclosed a. proper case for the issuance of an injunction to restrain the wife from disposing of the personal property pendente lite.
    
    Appeal from an order continuing an injunction.
    
      Jerome Buck, for app’lts; William B. JE Uison, for resp’t
   Daniels, J.

Near 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-satisfied 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.

To discover the existence of this unlawful intent, the transactions between the husband and wife are required to be closely watched and carefully scrutinized. Manchester v. Tibbetts, 121 N. Y., 219-222; 30 St. Rep., 721. 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 hi» 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 entrusted 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 dhis 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 nosts of this appeal to either party.

Yah Brunt, P. J., concurs in 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.  