Page:Federal Reporter, 1st Series, Volume 9.djvu/109

94 ' FEDERAL REPORTER. �Upon the facts stated in the complaint, Littlefield, as a creditor existing at the time of the original purchase, could plainly havo maintained an action for the relief here demanded. �The Revised Statutes of New York provide that where a convey- ance is made to one person, and the consideration therefor is paid by another, no trust shall resuit in favor of the latter, (thereby abolishing the former rule in equity,) but that such conveyance shall be pre- sumed to be fraudaient as against creditors, and that a trust shall resuit in favor of his then existing creditors, unless a fraudulent intent be disproved, to the extent necessary to satisfy their just demands. Eev. St, 728, §§ 51, 52. The latter clause ia merely declaratory of the existing rule in equity. The trust in favor of exist- ing creditors arises under this statute by presumption of law, in the absence of any proof as to the intention of the parties. And such a constructive trust, in. the absence of any proof of the intent of the parties, arises only in favor of creditors then existing. Underwood V. Sutcliff, 77 N. Y. 58. The statute is silent as to the effect of such a transaction in cases where there is proof of an actual intent to defraud both existing and subsequent creditors. And if such an investment of a debtor's funds is part of a premeditated scheme to defraud both present and future creditors, such as is set forth in this bill, and through the debtor's ultimate inaolvenoy they are thereby defrauded, I see nothing in this statute which would necessarily abol- ish the former remedy in equity allowed to subsequent creditors in such a case, and I am not aware that it bas been so decided. The contrary has been adjudged by the supreme court of the state. Mead y. Gregg, 12 Barb. 653. In Ocean Bank v. Hodges, 9 Hun. 161, a fraudulent intent vras not found, but the court say it did not exist. �That question, however, does not properly arise in this case. Lit- tlefield was an existing creditor in 1867, at the time of the paymenfc by Abraham Mead of 1 30, 000 as the consideration of the conveyance to his wife. The reoovery of final judgment in 1875, and return of execution upsatisfied, are the appropriate and conclusive legal proofs of the "necessity" of resorting to the constructive trust declared by the statute to arise in his favor from such a payment by his debtor. As this right of action is not yet barred by lapse of time, the plaintiff, as assignee and representative of creditors, is entitled to enforce the statutory trust for the payment of that debt and consequent relief of the estate in the assignee's hands. In re Duncan, 14 B. E. 32. No other allegations are necessary to make out & prima fade case, so far as respects this claim, than those of the existing indebtedness, the ��� �