When the validity of an assignment is unchallenged by creditors, not they, but the assignee, may maintain an action to reclaim property transferred by the assignor in fraud of the assignment. Swift v. Hart, 35 Hun, 128; Spring v. Short, 90 N. Y. 538, 544. Here the plaintiff impeaches the assignment; and impeaches it on the ground that, in connection with a previous transfer by the assignor, it was a device to defraud creditors.. If such be the fact it is open to attack by creditors, and as against them is of no avail. Rothschild v. Salomon, 5 N. Y. Supp. 865, 868; Chambers v. Smith, 14 id. 706, 711.
Upon a critical examination of the evidence, I am of opinion that ,thé defendant, finding himself in a condition of insolvency, and wanting to continue business free from molestation by creditors, made the assignment in order to a purchase of the assigned property in the name of his wife, and to effect that purchase abstracted $1,500 from the assigned assets. The fact is undisputed that he now conducts the business precisely as before the assignment, except that he purports to conduct it in his wife’s behalf, and as her agent. The evidence compels the inference that, contrary to his professions, he is carrying it on for himself as principal *409(McCabe v. Brayton, 38 N. Y. 196, 198), and this fact is significant of fraud in the assignment.
The decisive' question in the case is: " Was the debt of $1,500, which the defendant pretended to owe his wife, real or fictitious? If real, he had a right to discharge it by a preferential payment (Dudley v. Danforth, 61 N. Y. 626); if fictitious, then the intentional withdrawal in contemplation of the assignment Of the $1,500 from its operation, inevitably invalidates it. Coursey v. Morton, 132 N. Y. 556; Chambers v. Smith, 14 N. Y. Supp. 706, 711.
The story of this alleged debt, as told by the assignor and his wife, suffices to stamp it as a fabrication. Owner of three lots in Norwich, Connecticut, he proposed to deed them to her as a gratuity; but she suggested instead that he should sell them and give her the money. Hád the deeds been executed there could have been no doubt, of the transaction; but as it is, the donation of the money is evinced by no document and confirmed by no circumstance. The special reason assigned for the wife’s preference of cash to property, namely, that she might pay off a mortgage on her house, was a pretense; for the mortgage still subsists in its Original amount. This large gift to his wife is improbable upon the condition of the assignor’s business, then- not seemingly so prosperous as safely to spare such a considerable accession of capital. The lots, it is said, were sold for the aggregate sum of $1,500; the price the husband received in bills, brought them to his wife, and she kept them upon her person, a portion for the period óf á year, and the residue for months. Then, it is allegéd, she lent the money to her husband; but no scrap of paper attests the loan; no time stipulated for its repayment; no interest agreed or paid; no dates given of the loans or of their deposit in bank; no evidence of any intimation of the loan to any person before the assignment. But, if a valid debt of the husband to the wife, why did he not prefer her in the assignment, instead of diverting the amount front his assets? Obviously, because he needed the cash with which to buy the assigned property in his wife’s name.
The pretended loan Was repaid three days before the assignment, and how? By a check not indicated on the stub, nor disclosed to a committee of creditors among the vouchers .submitted by the assignor; but produced only when its existence was discovered, and he taxed with its disappearance. No receipt by the wife is. apr parent.
*410The sinister aspect of the assignment already revealed is ag-, gravated- by the circumstances of the purchase 'of the. assigned property. The $1,500 given by' the assignor to his wife was returned to him the, day before the assignee’s sale; and he handed it to Tompkins .to. make the purchase in the name of his wife. Why did he not buy himself? Evidently to avert suspicion. And. the formal delivery of the money to the wife -in the first instance was manifestly with the purpose of introducing her as an ostensible party to .the transaction. But, in truth, she had no agency in it. Tompkins made the purchase at the request of the assignor and with funds supplied by him’ The pretended.buyer, Mrs. Fensley, did,-not. speak to Tompkins, nor attend the. sale, nor. give “ any personal • attention whatever to the business.” -. So much- of the money, as was not disbursed at the sale, Tompkins. returned to the assignor, and it is not apparent that he restored ..it to. his wife,. Thus repossessed-of the. property he had- assigned,, he. resumed the . business under. a power of attorney from his wife.. But be-, conducts it in fact as his own. She takes no part in it,, and, knows nothing of its. condition.- Ostensibly her. agent, it-is. not. apparent-, that he receives any compensation for his services,- or pays, the profits, or -in any Way accounts, to his pretended, principal
From; this concourse of .suspicious circumstances, what- other inr ference is .possible than- that the assignment .was a, fraud upon creditors? .As said by Barrett, J., in Abegg v. Schwab, 9 N. Y. Supp. 681, 682: “ It is true the case may be-said to be wanting in yihat -is-technically called ‘ direct, evidence,’ but the circumstantial, evidence of fraud-is abundant and conclusive. . Many links in the chain, considered separately, -may well appear to, be wholly, unobjectionable, and yet all of the. links, considered in their relation to each other and as a whole, may point unerringly to fraudulent purposes and acts.” As said by Van Brunt, P. J., in. Smith v. White, 2 N. Y. Supp. 855, 858: “ The operations of business meare entered in -their books, and payments are made - by. checks rather -than by bills; and-it-is only when it is deemed desirable that the transaction should not be traced that bills are resorted to.”. Again, “ Qourts scrutinize with the utmost, care business, .transactions between husband and. wife alleged to. be fraudulent as against creditors, because fraud is .so easily practiced and concealed under cover- of the marriage relation.” White v. Benjamin, 150 N. Y. 258, 265. “Dealings between husband,. and- wife, which result in the appropriation of the husband’s property for the payment.of *411a debt claimed to be due to the wife, to the exclusion of .other creditors, furnish uncommon opportunities for the perpetration of fraud, and should be carefully and rigidly scrutinized.".’ Manchester v. Tibbetts, 124 N. Y. 219, 222.
- Other features of the transaction in question are indicative of fraud, but enough is already shown to condemn the assignment. Passavant v. Cantor, 43 N. Y. St. Repr. 247.
In any event, the transactions between the assignor and his wife were sufficiently discredited to exact from her satisfactory proof of their good faith. Seitz v. Mitchell, 94 U. S. 580; Carson v. Stevens, 40 Neb. 112; 42 Am. St. Rep. 661; Burt v. Timmons, 29 West. Va. 441; 6 Am. St. Rep. 664; The testimony of. the parties implicated in the fraud, though called as witnesses by the plaintiff, is not conclusive against its existence. Becker v. Koch, 104 N. Y. 394, 400-401; Elwood v. Telegraph Co., 45 id. 549, 553-554; Babcock v. Eckler, 24 id. 623, 632.
■ Counsel for the defendant objects to the evidence of the transfer of the judgments, on the ground of informality in the acknowledgment by the corporation; but the papers were otherwise authentic cated. Trustees v. McKechnie, 90 N. Y. 618.
Judgment "for plaintiff, with costs.