App. Div.] FIRST DEPARTMENT, MARCH TERM, 1899. fact, during his life, dispose of the property at all. After the delivery of the instruments to the trustee he could again not only acquire the possession of the property, but he could dispose of it just as effectually as he could before. The trustee was little more than bailee or attorney to hold and manage the property for him. No one except himself had any fixed or indefeasible interest in it until his death. In every legal sense, therefore, until then the property was his to enjoy and dispose of in any way he pleased. In reaching this conclusion Matter of Masury (28 App. Div. 580) has not escaped our attention. The principle there announced is not in conflict with this view. There the donor had no control over the income, but the same was directed to be paid by the trustee to a person named until he should arrive at the age of twenty-one years, when the property itself was to be delivered to him. Here the persons named in the different instruments had no absolute, unqualified or enforcible interest in either the property itself or the income therefrom until Bostwick's death. Until that time he reserved to himself the power to withdraw the same from the possession of the trustee, and he also reserved the right to alter, amend or terminate the trust if he so desired. Having reserved to himself this power, it must be held, under every well-recognized rule relating to the transfer of property, that the interest which the persons named in the different instruments had was one which was intended to take effect in possession or enjoyment only at or after Bostwick's death. The transfers were thus brought both within the letter and spirit of the statute. In Matter of Green (153 N. Y. 223, 227) by a trust deed a trustee was directed to pay the income upon the property transferred to the donor during her life, and upon her death to divide the property itself among three nieces, their issue or survivors, but no power of revocation whatever was reserved to the donor. The court there held that the transfer was intended to take effect in possession or enjoyment at or after the death of the grantor within the meaning of the statute, and that a tax was properly imposed. In disposing of that case the court said: "It is not important to determine whether the trust instrument was made in contemplation of death, or whether, upon the delivery thereof, the remainders vested in the nieces in such a sense as to constitute a gift inter vivos within the meaning of the cases cited by the learned counsel for the respondent. APP. DIV.-VOL. XXXVIII. 29 FIRST DEPARTMENT, MARCH TERM, 1899. [Vol. 38. It may be conceded that upon the delivery of the trust deed, an interest in remainder vested in the nieces subject to open and let in the children of one who had died during the lifetime of the donor, according to the terms of the instrument. The real question is whether the remainders which the nieces took under the deed were intended to 'take effect in possession or enjoyment' at or after the death of the donor. Until her death, they had no actual possession, or right to the possession, of the property. Since they could not receive any part of the principal or the income till after her death, their right of enjoyment was postponed till the happening of that event. Whatever interest they may have had before, the right to the possession and enjoyment depended upon the death of the donor. the death of the donor. We think it quite clear that the remainders were transferred to the nieces in possession or enjoyment, by an instrument intended to take effect for that purpose, at or after the death of the donor, and so the case is brought within the terms of the statute. It matters not whether the transfer is by grant or by gift so long as it was intended to take effect, in possession or enjoyment, at or after the death of the grantor or donor, the devolution of title is subject to the tax. The death of the donor was the event which made the transfer complete and effective and secured to the nieces the possession and enjoyment of the property." The language just quoted and the principle announced are quite applicable to the transfers under consideration. Here the death of the donor was one event which made the transfers of the property complete and effective. Until that time the persons mentioned in the different instruments had no right to the possession and no legal interest in the property. Until then Bostwick had the right to withdraw the property from the possession of the trustee, and to alter, amend or terminate the trust itself if he so desired. The reservation of this power clearly and unmistakably indicated an intention on the part of Bostwick that the transfers were not to take effect in possession or enjoyment until he died. It follows that a tax was properly imposed, and that the order of the surrogate was right and should be affirmed, with costs to the respondent. VAN BRUNT, P. J., PATTERSON, O'BRIEN and INGRAHAM, JJ., concurred. Order affirmed, with costs. App. Div.] FIRST DEPARTMENT, MARCH TERM, 1899. HARVEY A. MOYER, Appellant, v. LYMAN G. BLOOMINGDALE and JOSEPH B. BLOOMINGDALE, Respondents, Impleaded with MORRIS KRAUS and BENJAMIN KRAUS. A mortgage taken with intent to defraud creditors · the mortgagee is not a bona fide purchaser as to a vendor of the mortgaged property from whom the mortgagor purchased with intent not to pay for it — burden of proof of bona fides of price. inadequacy A person who accepts a chattel mortgage, knowing that it was executed with intent to hinder, delay and defraud creditors, but without knowledge that the mortgaged chattels had been purchased by the mortgagor with the intention not to pay for them, is not a bona fide purchaser; and the vendor of such chattels is entitled to recover them from him. In an action by the vendor against his vendee (the mortgagor) and the mortgagee to recover the value of the chattels, the vendor is entitled, even as against the mortgagee, to rest upon proving the fraud in the original purchase, and the burden is on the latter to prove that he is a bona fide purchaser. Inadequacy of price, when very great, is of itself evidence of an infirmity in the vendor's title. Evidence sufficient to present a question for the jury whether the mortgagee had knowledge of the mortgagor's original fraud, considered. APPEAL by the plaintiff, Harvey A. Moyer, from a judgment of the Supreme Court in favor of the defendants Lyman G. Bloomingdale and Joseph B. Bloomingdale, entered in the office of the clerk of the county of New York on the 22d day of June, 1898, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk's office on the 22d day of June, 1898, denying the plaintiff's motion for a new trial made upon the minutes. Franklin Pierce, for the appellant. S. Livingston Samuels, for the respondents. BARRETT, J.: The action is brought to recover the value of two buggies sold by the plaintiff to the defendants Morris and Benjamin Kraus on the 26th day of February, 1894, with damages for their detention. These buggies, with a large amount of other property, were formally mortgaged by the defendants Kraus to the defendants Lyman G. and Joseph B. Bloomingdale on the 6th day of August, 1894, as FIRST DEPARTMENT, MARCH TERM, 1899. [Vol. 38. alleged security for a debt of over $11,000. The mortgaged property was, almost immediately thereafter, sold under the mortgage and bought in by the said defendants through one of their clerks. The plaintiff contends that the original sale was vitiated by fraud, and that he may recover his property from the possession of the defendants Bloomingdale upon the ground that they are not bona fide transferees thereof for value. The jury found a verdict for the plaintiff against the defendants Kraus. The court, however, dismissed the complaint as to the defendants Bloomingdale, and the plaintiff appeals. - It is conceded that there was abundant evidence to show that Kraus Bros. bought the goods originally with the intention not to pay for them, and also that they gave the chattel mortgage to the defendants Bloomingdale with the intention of hindering, delaying and defrauding their creditors. It is also conceded that there was evidence which, to quote from the respondents' brief, “may have been sufficient to carry the case to the jury as to whether or not Bloomingdale Brothers had notice of the intention of the mortgagors in making this mortgage to hinder, delay and defraud their creditors generally." There was, in fact, ample evidence of such notice which will be adverted to later. The respondents, however, contend that there was no evidence showing knowledge or notice on the part of Bloomingdale Bros. of the fraudulent intention of Kraus Bros. in the original purchase of the property, and that this fact is conclusive against the plaintiff. We are unable to concur either in the premise or the conclusion. The proposition seems to be that if the respondents had no knowledge or notice of the primary fraud in the original purchase they are bona fide purchasers for value, although in their own purchase from the fraudulent vendees they participated in the latter's subsidiary fraud, and made such purchase to enable them to cheat their creditors. This seems to us an extraordinary proposition. Williams v. Tilt (36 N. Y. 319) is cited as an authority in support of it, but that case gives color to no such doctrine. It was an action to rescind a contract of sale induced by fraud, and to recover the goods from one who had advanced money upon them to the vendee, without notice of the fraud, but at a usurious rate of interest. It was held that usury was a question between the borrower and the lender, and not between the lender App. Div.] FIRST DEPARTMENT, MARCH TERM, 1899. and a stranger; that as the original vendor was a stranger to the transaction between his vendee and the second purchaser, he could not assail the latter's transaction for usury; and, consequently, that the question of the second purchaser's bona fides depended upon the inherent nature of the transaction between him and his vendor. The fact that there was usury in the contract did not, said PARKER, J. (p. 324), “at all affect the relative rights and equities between him (the second purchaser) and the original vendor." It is true that the learned judge observed that if the second purchaser is free from any privity with the original fraud, "he is a bona fide purchaser, without reference to his standing as to his immediate vendor. It was not good faith to him which is the subject of inquiry, but to the original owner." These latter observations had relation to the particular facts then under consideration. They served to illustrate the proposition that the second purchaser was none the less a bona fide transferee for value, because the contract with his vendor was such that the latter might elect to avoid it for usury. An entirely different question would have been presented had the second purchase been tainted with downright fraud, either upon the immediate vendor or upon some third person or collective body. The court criticised the statement in Ramsdell v. Morgan (16 Wend. 574) that "there is a solecism on the face of the expression, a bona fide purchaser on usury." We apprehend there would have been no such criticism had the suggested solecism been "a bona fide purchaser on fraud." Here, however, the fraud in the second purchase - for the mortgage transaction was essentially a purchase — was not limited to that subsidiary transaction. It was a fraud upon all the creditors of Kraus Bros., and consequently upon the plaintiff. The respondents' reasoning upon this head savors of travesty. It makes the bona fides of their purchase depend not upon its inherent honesty or dishonesty, but upon the attitude of the defrauded creditor. If the latter affirms the original purchase, the respondents are not, as the reasoning concedes, bona fide purchasers for value, because their purchase was to defraud their vendor's creditors, and the plaintiff is then one of those creditors. If, however, the plaintiff rescinds the original purchase, then the respondents are, they argue, bona fide purchasers because the plaintiff is no longer such creditor, but simply the owner of the property sought to be recovered. This distinction |