
    William Nichthauser et al., Appellants, v. Sigmund S. Lehman, Respondent.
    (Supreme. Court, Appellate Term,
    June, 1896.)
    1. Attachment — Motion to vacate — Intent of transferees.
    . On a motion to set aside an attachment granted, on the ground that ' defendant had disposed of his property with intent to defraud creditors, the intent of the transferees of the property is immaterial.
    2. Same — Fraudulent disposition of property.
    The fact that upon transfers of property in payment of debts the debtor received a sum of money from the transferees which he did • not'pay to his other creditors, but retained for his own use,,is sufficient to support- an, attachment.
    3. Reference — Exceptions.
    .An objection that a referee’s report cannot be impeached because no exceptions were filed thereto is not available .on. appeal where the motion based thereon was made upon an order to show cause of less than eight days, which makes no reference to a failure to file exceptions,. and it does not appear that such objection was raised on the hearing.
    Niehthauser v. Lehman, 15 Mise. Rep. 447, reversed.
    Appeal from an affirmance by the -General Term of the City Court of an order vacating a warrant of attachment, cgnfirming the report of a referee and directing the plaintiffs to pay to the defendants $660 referee’s and stenographer’s fees.. The appeal brings' up for. review the order of reference referring the matters involved upon the merits of the attachment.
    • Henry M. Goldfogle and Samuel I. Frankenstein, for appellants.
    Otto Irving Wise, for respondent.
   Daly, P. J.

The plaintiffs were creditors of the defendant foi; goods sold and delivered, and obtained an attachment against his property on the ground that he had assigned, disposed of .or secreted, and'was about-to assign, dispose of or'secrete, his property with intent to defraud his creditors. The defendant was the owner of four stores in the city of New York and the stocks of goods therein,' and it was alleged that on the 24th day of December,. 1891, he had conveyed by bill of sale his place of business at 15 Sixth, avenue to Ms wife, Ms place of business 205 First avenue to Aaron Lehman, Ms brother, and.two places of busmess, 251 Eighth avenue and 151 Eighth avenue, to Hanna Rosenthal, of Baltimore, his sister, under circumstances supporting an inference of fraudulent intent.

The defendant moved to vacate the attachment on his own affidavit and the affidavits of different persons, including two* of the transferees, intended to show that the transfers were made in good faith and in payment of antecedent bona fide debts; and the court granted the motion on condition that defendant give security by deposit or undertaldng to pay any judgment recovered by the plaintiffs; but the defendant asked for a reargument of the motion and thereupon the court ordered a reference of the facts. The referee, after examination of a number of witnesses, reported that, on the 24th of December, 1894, or immediately prior to that time, the defendant possessed no. property, real or personal, other than the stores before mentioned; that the transfers Were made to bona fide creditors and were honest and legitimate, and that defendant had not assigned, disposed of or secreted his property with intent to cheat or defraud Ms creditors. The defendant thereupon moved upon the report to vacate and set aside the attachment, wMch motion was granted and the order appealed from accordingly made.

It would seem from the record that the referee and the court below regarded the question whether the conveyances of defendant’s stores were assailable by creditors as the only one arising upon the evidence, and finding that the purchasers took such conveyances in good faith and for a valuable consideration held the conveyances to be valid. Hpon that question the intent of the purchasers would, of course, be controlling if tMs were a proceeding to set aside such conveyances; but as the question was whether the defendant had disposed of his property with intent to defraud his creditors, Ms intent, and not that of the purchasers, is the principal consideration, and apart from any issue as to those conveyances there was testimony before the referee conclusive in support of the attachment.

The defendant made the- admission that on the day that he executed the bill of sale to Hanna Rosenthal she gave Mm $400 in cash, that he did not pay any of Ms creditors with tins money but kept it for himself, although on that day one of the plaintiffs called on Mm and demanded the payment of Ms bill. He had not then spent the money, but had handed it over to Ms partner and brother to take home, and they divided it between them a few days later and spent it. He also admitted the receipt of $50 and $150 from two other of the transferees; which he also retained. These admitted facts were ample to justify the attachment.

In Globe Woolen Company v. Carhart, 67 How. Pr. 403, it was held that large drafts of money by a firm shortly before making an assignment for the benefit of creditors,, not for the purpose of paying obligations of the firm, or even individual debts, but for personal use, were a fraud upon creditors justifying the issuance of an attachment against the property because they “ did not intend that this money should go to the payment of their copartnership debts to which it should have been applied,-but they intended to keep and use it for their individual purposes, thereby secreting and withdrawing it from the creditors of the firm.” In Vietor v. Henlein, 34 Hun, 562, it Was held fraudulent for members of a firm to reserve moneys for the support of' their family when making a general assignment. In White v. Pagan, 18 Week. Dig. 358, it was held that the debtor making a general assignment must devote all his- property to the payment of his debts, except such as is by law exempt from execution.

These decisions were in cases of general assignments, but there is no practical distinction between such a case and this, where, as is undisputed, the defendant was hopelessly insolvent and conveyed all his property to a limited number of creditors, one being, his wife, another his uncle and the other his mother-in-law, his debts aggregating $18,000 to $24,000, none of which has been paid since the conveyances in question. The defendant was asked why the money was' paid to him by these transferees at the time the bills of sale were executed, and he replied, “ Because I could not live on wind, and I would not have made the bill of sale but for that.”

Hnder such circumstances it-was conclusively established that the defendant made the transfers in order to obtain a sum in cash for his private use and that of his partner and with intent of keeping it from- his creditors; so that in making the transfers and keeping the cash then received he intended to defraud them.

The point i's made that the report of the referee could not be assailed because no exceptions were filed to it. (Rule 30.) There is "nothing in the record to show that exceptions were not filed to the report. The date of filing of the report is not given and there is* nothing to show that the plaintiff was allowed his full eight days under the rule- to file exceptions. It appears that the motion ■ to ' vacate the attachment was brought up on the referee’s report by defendant on an order to show cause giving less than eight days’ notice, and no reference is made in such order to a failure to file exceptions. It would appear from the record that exceptions were waived, if none were filed, and that the objection to the want of exceptions is taken for the first time on appeal.

Order appealed from reversed, with costs of this appeal and the appeal in the court below, and motion to vacate attachment denied, with costs.

McAdam and Bischoff, JJ., concur.

Order reversed, with costs of appeals, and motion denied, with costs.  