
    Emil Neuberger et al., App’lts, v. Henry G. Keim et al., Resp’ts.
    
    
      (Court of Appeals, Second Division,
    
    
      Filed May 31, 1892.)
    
    1. Deed—By husband to wife—Effect upon subsequent creditors.
    A voluntary conveyance from husband to wife is good as against subsequent creditors, unless it was made with the intent to defraud such subsequent creditors; or there was secrecy in the transaction by which knowledge of it was withheld from such creditors, who dealt with the grantor upon the faith of his owning the property transferred; or the transfer was made with the view of entering into some new and hazardous business, the risk of which the grantor intended should be cast upon the parties having dealings with him in a new business.
    2. Same.
    On December 28, 1883, defendant, owning an interest in real estate in the city of New York of the value of $5,000, voluntarily conveyed the same through a third party to his wife, and the deeds were recorded. At this time defendant was engaged in business, and there was no proof that his liabilities exceeded the value of his properly. He had, however, had dealings with one S. for the purchase of a business similar to his own in Rochester, and in the course of the negotiations had stated to S. that he owned said real estate. On the 9th day of January, 1884, defendant and his wife visited 8. and agreed to and did purchase said business, and for the purpose of obtaining credit from 8. again stated that he was the owner of the said real estate, securing notes given by his wife’s endorsements. In 1885 he became insolvent, and p’aintiil's, as judgment creditors, endeavored to set aside the deed to his wife as being made in fraud of their rights. Reid, that plaintiffs had failed to establish their right to the relief demanded, as the conveyances were not secret, nor was it shown that th -y were made with a view of entering into a new and hazardous business, with intent of casting upon plaintiffs the risks of the dealings they may have with him in such business.
    Appeal from a judgment of the general term of the supreme court in the first judicial department, affirming a judgment entered upon a decision.
    
      David Hays, for app'lts; Arthur Furber, for resp’ts.
    
      
       Affirming 23 Rep.. St, 569.
    
   Haight, J.

This action was brought to set aside certain deeds on the ground that they were made with the intent to defraud creditors.

The defendant, Henry Gr. Keim, was the owner of an interest in certain real property situate in the city of New York of the value of about $5,000, and on the 28th day of December, 1883, he voluntarily conveyed the same to the defendant Kate Boiler, who on the same day conveyed the same to the defendant Mary A. Keim, the wife of the defendant Henry Gr. Keim, and which deeds were, on the 31st day of December thereafter, recorded in the office of the register of the city and county of New York, in Liber 1768 of Conveyances, at pages 163 to 165. At the time of these conveyances the defendant Henry Gr. Keim was engaged in the manufacture of flowers and feathers for the millinery trade, and was possessed of personal property consisting of stock in trade, fixtures, furniture, bills, notes, book accounts and the good will of his business, and there is no proof that his then liabilities exceeded the value of his property. He had, however, prior to such conveyance, had negotiations with one J. B. Sweeting, of Rochester, N. Y., for the purchase of his retail millinery business in that city, and in the course of such negotiations had stated to Sweeting that he was the owner of the real estate conveyed as aforesaid. On the 9th day of January, 1884, Keim and wife visited Sweeting at his store in Rochester and then agreed upon the terms of purchase, and on that occasion Keim, in the presence of his wife, for the purpose of obtaining credit, again stated to Sweeting that he was the owner of the real estate before mentioned. Sweeting, believing the representations concerning the ownership of the real estate, sold to Keim his stock of millinery goods in Rochester for the price of $9,500; $500 to be paid in cash, and $9,000 on a term of credit running nine years, secured by notes in part made by Keim, endorsed by his wife, and in part notes made by his wife and endorsed by himself. Keim took possession and carried on the business in the city of Rochester until the 15th day of June, 1885, at which time he made a general assignment for the benefit of creditors. In the meantime a fire had occurred in his store, destroying the greater portion of his stock of goods.

The plaintiffs are judgment creditors of Keim, and their judgments were recovered for goods sold and delivered to him, in the spring of 1885, for his millinery business in Rochester.

The trial court found as a conclusion of law that the deeds mentioned are good and valid conveyances as against the plaintiffs, and vested the title of the property in the defendant Mary A. Keim, and refused to find that Keim, at the time of executing the deed, was insolvent, or that he made the conveyance with the intent to hinder, delay and defraud his creditors in the business in which he was about to engage in Rochester, including the plaintiffs.

The representation made by Keim to Sweeting at the time of the purchase of the millinery stock in Rochester might be the subject of criticism and indicate a fraudulent intent to cheat and defraud him were it not for the fact that the notes given to secure the payment of the purchase price bear the signature of Mrs. Keim, the then owner of the real estate. It is not, however, important for us at this time to consider the relations existing between Keim and Sweeting, or of the liability of one to the other, further than to determine whether the transaction establishes an intent to cheat and defraud subsequent creditors. Sweeting is not a party to this action, and the liabilities upon which the plaintiffs have obtained their judgments were contracted more than a year subsequent to these conveyances. As to them there is no evidence that there was any representation made by Keim as to his ownership of real property to induce them to give him credit, or that they relied upon any such representation or appearance of ownership in giving him credit; neither is there evidence that the millinery business in which he was about to engage at Rochester was hazardous.

The rule we regard as well stated by Mr. Justice Brewer in the case of Schreyer v. Scott, 134 U. S., 411: “ It is evident that the rule obtaining in New York as well as recognized by this court is, that even a voluntary conveyance from husband to wife is good as against subsequent creditors; unless it was made with the intent to defraud such subsequent creditors; or there was secrecy in the transaction by which knowledge of it was withheld from such creditors who dealt with the grantor upon the faith of his owning the property transferred ; or the transfer was made with the view of entering into some new and hazardous business, the risk of which the grantor intended should be cast upon the parties having dealings with him in a new business." See, also, Todd v. Nelson, 109 N. Y., 316, 327; 15 St. Rep., 270.

Applying this rule to the facts as found by the trial court, it is apparent that the plaintiffs have failed to establish their right to the relief demanded. The conveyances were not secret, for they were recorded in the office of the register on the third day after their execution, and it is not shown that they were made with the view of entering into a new and hazardous business with the intent of casting upon the plaintiffs the risks of the dealings they may have with him in such business.

It is claimed that the complaint was dismissed at the close of the plaintiffs’ case, and that it was in effect a nonsuit, and if there are any disputed questions of fact or inferences to be drawn therefrom which upon a jury trial would require the submission of the case to a jury, the judgment must be reversed, and our attention is called to the case of Place v. Hayward, 117 N. Y., 487; 27 St. Rep., 710.

In that case the complaint was dismissed, and the court considered the question as to whether the defendant had the right to retain in the judgment the statement that the dismissal was upon the merits.

In this case, after the plaintiffs rested, the counsel for the defendants moved to dismiss the complaint on the ground that the plaintiffs had failed to prove facts sufficient to constitute a cause of action. The court replied: “ I will not dismiss the complaint, but I say upon the evidence as it now stands I would not feel justified in finding that this conveyance in question was made with the intention of defrauding creditors.”

Both parties prepared findings and submitted them to the court The complaint was dismissed upon the merits. It appears to us that under these circumstances the case must be deemed to have been submitted to the court in such a way as to permit it to weigh the evidence, draw the legitimate inferences therefrom and determine the facts. The trial, as we have seen, was before the court, which was charged with the duty of determining the facts. It is quite different in a trial before a j ury. In such a case it is the province of the court to declare the law, and that of the jury to determine the facts. We do not regard it as'necessary that a court charged with the duty of deciding the facts should be required to continue its sittings and take the evidence that the defendant may be able to produce when its mind is satisfied upon the close of the plaintiff’s case that under the facts disclosed the plaintiff ought not to recover.

We do not regard the conversation of Sweeting with Keim and wife in August, 1884, in reference to Mrs. Keim’s signature upon the notes, as material. If she had a desire to be relieved from liability upon the notes at that time it would not tend to establish the fact that she had an intent to defraud at the time they were executed.

The judgment should be affirmed, with costs.

All concur.  