64 creditors is not sufficient to avoid the conveyance, unless the conveyance is purely voluntary.65 Creditors. A creditor is allowed to take property from a failing firm in satisfaction of a demand, even though he know of the insolvency, unless he participate in the intent to delay, defraud, or hinder other creditors.50 Post-Nuptial Settlements. A post-nuptial settlement may be valid as to subsequent creditors of the settlor, unless made secretly or with intent to defraud them.67 But it will be remembered that ordinarily a voluntary conveyance is presumptively fraudulent as to existing creditors.68 Effect of Consideration. Where intent to defraud exists, a good or valuable consideration will not save the conveyance from the condemnation of the statute.69 But a valuable consideration affords prima facie evidence of good faith,70 though the presumption may be overcome by proof. A nominal, although valuable, consideration may on the other hand be proof of fraudulent intent; but it is not conclusive proof.73 64 Jaeger v. Kelley, 52 N. Y. 274; Bush v. Roberts, 41 id. 278; Jacobs v. Morrison, 136 id. 101; Hyde v. Bloomingdale, 23 Misc. Rep. 728. 65 Fuller v. Brown, 76 Hun, 557; Erickson v. Quinn, 47 N. Y. 410: Coleman v. Burr, 93 id. 17; and see cases cited under § 263, supra. Go Dudley v. Danforth, 61 N. Y. 626; Hine v. Bowe, 114 id. 350; Stanley v. Union Nat. Bank, 115 ic 122; Knower v. Central Nat. Bank, 124 id. 552; Central Nat. Bank v. Seligman, 30 Abb. N. C. 245, 138 N. Y. 435; Abegg v. Bishop, 142 id. 286; Billings v. Billings, 31 Hun, 65; McNaney v. Hall, 86 id. 415; Prewit v. Wilson, 103 U. S. 22; Tompkins v. Hunter, 24 N. Y. Supp. 8; H. B. Claflin Co. v. Arnheim, 87 Hun, 236; Dewey v. Wilson, 4 App. Div. 232; Hoffman v. Susemihl, 15 id. 405; Repanno Chemical Co. v. Victor Hardware Co., 101 Fed. 948; 67 Babcock v. Eckler, 24 N. Y. 623; Neuberger v. Keim, 134 id. 35; Holden v. Burnham, 63 id. 74; Talcott v. Levy, 29 Abb. N. C. 3; Schreyer v. Scott, 134 U. S. 405; Flory v. Houck, 40 Atl. 482; In re Foss, 147 Fed. 790. 68 Smith v. Reid, 134 N. Y. 568; Allee v. Slane, 26 App. Div. 455; Wright v. Seaman, 32 id. 106; cf. Adee v. Hallett, 3 id. 308. 69 Billings v. Russell, 101 N. Y. 226; cf. Adee v. Hallett, 3 App. Div. 308, as to consideration. 70 Nugent v. Jacobs, 103 N. Y. 125. 71 Taylor v. Hoey, 36 N. Y. Super. Ct. 402. 72 Mackay v. Gabel, 117 Fed. 873. 73 Fitzpatrick v. Fox, 80 App. Div. 345. § 266. Rights of purchaser or incumbrancer for valuable consideration protected. This article does not in any manner affect or impair the title of purchaser or incumbrancer for a valuable consideration, unless it appears that he had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor. Formerly section 230, Real Property Law of 1896, chapter XLVI, General Laws: § 230. Rights of purchaser or encumbrancer for valuable consideration protected. This article does not in any manner affect or impair the title of a purchaser or encumbrancer for a valuable consideration, unless it appears that he had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.74 Formerly 2 Revised Statutes, 137, section 5: § 5. The provisions of this Chapter shall not be construed, in any manner, to affect or impair the title of a purchaser for a valuable consideration, unless it shall appear, that such purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.75 Origin of Section. 2 Revised Statutes, 137, section 5, was taken. from the act of 178776 by the original revisers; but its substance was contained in the English statutes on which the New York act of 1787 was in turn founded.78 Voluntary Assignee not a Purchaser. An assignee for the benefit of creditors is not a purchaser for a valuable consideration.79 A bona fide purchaser is one who pays value without notice of the claim or interest of another.80 Notice. Ordinarily a person who has notice of facts, sufficient to put him on inquiry, is not to be regarded as a purchaser without notice.81 74 Repealed by Real Prop. Law of 1909, § 460, art. 14, chap. 50, Consolidated Laws. See below, § 460. 75 Repealed, chap. 547, Laws of 1896. 4. 76 2 J. & V. 88; 1 R. L. 75. 77 Note 2 R. S. 137, § 5. 78 13 Eliz., chap. 5, § 6; 27 id., chap. $ 4. See pp. 892, 894, supra, under §§ 262, 263, Real Prop. Law. 79 Griffin v. Marquardt, 17 N. Y. 28. 80 Spicer v. Waters, 65 Barb. 227. 81 Williamson v. Brown, 15 N. Y. 354; Stearns v. Gage, 79 id. 102; Parker v. Conner, 93 id. 118; Bush v. Roberts, III id. 278; Jacobs v. Morrison, 136 id. IOI: Anderson V. Blood, 152 id. 285; Gilmour v. Colcord, 96 App. Div. 358. Burden of Proof. If a purchaser show that he purchased for a valuable consideration, the creditor must then show that the purchaser had actual notice of the fraudulent intent specified in the statute.82 A purchaser, or a mortgagee for value, is not chargeable with constructive notice under this statute.83 Such knowledge, however, need not be established by positive evidence, but may be inferred from circumstances.84 Bona Fide Purchasers. An innocent purchaser for value, without notice, from one who had actual notice of a conveyance in fraud of creditors, is a bona fide purchaser under this statute.85 So, a purchaser with notice from one who bought without notice, takes the title of his grantor, and is protected to the same extent.86 Fraudulent Grantee. Where grantee has actual notice, or is particeps fraudis, he cannot recover the money paid on the conveyance,87 and subsequent improvements are also forfeited where he had actual notice.88 But actual disbursements, such as taxes or interest on mortgages, are sometimes allowed such a grantee,89 especially when his guilt is constructive only.90 82 Starin v. Kelly, 88 N. Y. 418; Taylor v. Hoey, 36 N. Y. Super. Ct. 402. 83 Stearns v. Gage, 79 N. Y. 102; Murphy v. Briggs, 89 id. 446; Parker v. Conner, 93 id. 118. 84 Ross v. Caywood, 16 App. Div. 591. 85 Jackson v. Walsh, 14 Johns. 407; Noyes v. Burton, 29 Barb. 631; Frazer v. Western, 1 Barb. Ch. 220; affd., 3 Den. 610, How. Cas. 448; see below, p. 946. 86 Griffith v. Griffith, 9 Paige, 315. 87 See above, p. 896, cases cited under $263, Real Prop. Law. 88 Shand v. Handley, 71 N. Y. 319; cf. Shelley v. Cody, 187 id. 166, 170. 89 Loos v. Wilkinson, 113 N. Y. 485. 90 Lore v. Dierkes, 16 Abb. N. C. 47; Thomas v. Evans, 105 N. Y, 601. § 267. Conveyances with power to revoke, determine or alter. A conveyance of, or charge on, an estate or interest in real property, containing a provision for the revocation, determination or alteration of the estate or interest, or any part thereof, at the will of the grantor, is void, as against subsequent purchasers and incumbrancers, from the grantor, for a valuable consideration, of any estate or interest so liable to be revoked or determined, although the same be not expressly revoked, determined or altered by the grantor, by virtue of the power reserved or expressed in the prior conveyance or charge. Where a power to revoke a conveyance of real property or the rents and profits thereof, and to reconvey the same, is given to any person, other than the grantor in such conveyance, and such person thereafter conveys the same real property, rents or profits to a purchaser or incumbrancer for a valuable consideration, such subsequent conveyance is valid, in the same manner and to the same extent as if the power of revocation were recited therein, and the intent to revoke the former conveyance expressly declared. If a conveyance to a purchaser or incumbrancer, under this section, be made before the person making it is entitled to execute his power of revocation, it is nevertheless valid, from the time the power of revocation actually vests in such person, in the same manner, and to the same extent, as if then made. Formerly section 231, Real Property Law of 1896, chapter XLVI, General Laws: § 231. Conveyance with power to revoke, determine or alter.- A conveyance of or charge on an estate or interest in real property, containing a provision for the revocation, determination or alteration of the estate or interest, or any part thereof, at the will of the grantor, is void, as against subsequent purchasers and encumbrancers, from the grantor, for a valuable consideration, of any estate or interest so liable to be revoked or determined, although the same be not expressly revoked, determined or altered by the grantor, by virtue of the power reserved or expressed in the prior conveyance or charge. Where a power to revoke a conveyance of real property or the rents and profits thereof, and to reconvey the same, is given to any person, other than the grantor in such conveyance, and such person thereafter conveys the same real property, rents or profits to a purchaser or encumbrancer for a valuable consideration, such subsequent conveyance is valid, in the same manner and to the same extent as if the power of revocation were recited therein, and the intent to revoke the former conveyance expressly declared. If a conveyance to a purchaser or encum.. brancer, under this section, be made before the person making it is entitled to execute his power of revocation, it is nevertheless valid from the time the power of revocation actually vests in such person, in the same manner, and to the same extent, as if then made.91 Formerly 2 Revised Statutes, 134, sections 3, 4 and 5: $ 3. Every conveyance or charge of, or upon, any estate or interest in lands, containing any provision for the revocation, determination or alteration, of such estate or interest, or any part thereof, at the will of the grantor, shall be void, as against subsequent purchasers from such grantor for a valuable consideration, of any estate or interest so liable to be revoked or determined, although the same be not expressly revoked, determined or altered, by such grantor, by virtue of the power reserved or expressed in such prior conveyance or charge.92 84. Where a power to revoke a conveyance of any lands, or the rents and profits thereof, and to reconvey the same, shall be given to any person, other than the grantor in such conveyance, and such person shall thereafter convey the same lands, rents or profits, to a purchaser for a valuable consideration, such subsequent conveyance shall be valid, in the same manner and to the same extent, as if the power of revocation were recited therein, and the intent to revoke the former conveyance expressly declared.93 § 5. If a conveyance to a purchaser, under either of the two last preceding sections, shall be made, before the person making the same, shall be entitled to execute his power of revocation, it shall nevertheless be valid, from the time the power of revocation shall actually vest in such person, in the same manner and to the same extent, as if then made.94 $6 Origin of Section. That particular provision formerly contained in 2 Revised Statutes, 134, section 3, concerning conveyances with power of revocation, was originally taken from the act of 1787,95 which, in turn, was derived from the statute 27 Elizabeth, chapter 4, section 5. The provisions contained in 2 Revised Statutes, 134, sections 4 and 5, were introduced by the original revisers themselves, because they deemed them to be within the equity of the statute against fraudulent conveyances.97 It would seem that in any Revision, such latter provisions might well have been included in the Article on Powers. They are apt to escape the student of that subject otherwise. But in the latest revision- the Consolidated Laws no change of situation was made. 91 Repealed by Real Prop. Law of 1909, § 460, art. 14, chap. 50, Consolidated Laws. See below, § 460. 92 Repealed, chap. 547, Laws of 1896. 93 Repealed, chap. 547, Laws of 94 Repealed, chap. 547, Laws of 1896. 95 2 J. & V. 88; 1 R. L. 75, § 5. $ 144, 145, Real Prop. Law. 97 Revisers' notes to 2 R. S. 134. |