Syllabus.

character; and like every non-negotiable paper, whoever takes it does so subject to its equities and burdens; and though ignorant of such equities and burdens his ignorance does not relieve the paper therefrom, or enable him to hold it discharged therefrom. It is objected that upon the face of this certificate it is nowhere stated that "George H. Hammond & Company" is a corporation. While this is not expressly stated, it clearly appears; and even if it were not so, the certificate is non-negotiable paper, and the party had no right to deal with it as though it were otherwise. He takes it subject to the burdens that in fact rested upon it.

Technical matters are suggested by counsel, but we deem it unnecessary to notice them. The circuit judge unquestionably, as appears from the record, ruled upon the substantial question considered by us. We think his ruling erroneous, and the case must therefore be reversed. That this lien of a corporation may be waived cannot be doubted. National Bank v. Watsontown Bank, 105 U. S. 217, 221. Perhaps when all the facts are developed, as they can be on the new trial, matters may be disclosed sufficient to establish a waiver; but mere ignorance on the part of the purchaser of the fact of the existence of the lien does not destroy it. It constitutes no waiver on the part of the corporation.

Judgment reversed, and the case remanded for a new trial.

SCHREYER v. SCOTT.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES

THE SOUTHERN DISTRICT OF NEW YORK.

No. 197. Argued January 31, 1890. — - Decided March 24, 1890.

FOR

In determining the rules applicable to conveyances of real estate from a husband to his wife, reference should be had not only to the decisions of this court, but also to those of the state where the parties lived, and where the transactions took place.

The rule obtains in New York, and is recognized by this court, that even a

Citations for Appellant.

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, unless 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, unless the transfer was made with a 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 the new business. When real estate is acquired by a husband in his own name by the use of the separate property of his wife, a subsequent conveyance of it by him to her is not a voluntary conveyance, but the transfer of the legal title to the equitable owner.

IN EQUITY.

The case is stated in the opinion.

Mr. Frederic R. Coudert for appellant. Mr. A. O. Salter filed a brief for same, citing: Allen v. Massey, 17 Wall. 351; Carr v. Breese, 81 N. Y. 584; Phonix Bank v. Stafford, 89 N. Y. 405; Cole v. Tyler, 65 N. Y. 73; Dunlap v. Hawkins, 59 N. Y. 342; Wickes v. Clarke, 8 Paige, 161; Van Wyck v. Seward, 1 Edw. Ch. 327; Wallace v. Penfield, 106 U. S. 260; Hinde v. Longworth, 11 Wheat. 199; Clark v. Killian, 103 U. S. 766; Smith v. Vodges, 92 U. S. 183; Graham v. Railroad Co., 102 U. S. 148; Horback v. Hill, 112 U. S. 144; Pepper v. Carter, 11 Missouri, 540; Payne v. Stanton, 59 Missouri, 158; Lerow v. Witmarth, 9 Allen, 382; S. C. 83 Am. Dec. 701; Pratt v. Curtis, 2 Lowell, 87; Herring v. Richards, 1 McCrary, 570; Dygert v. Remerschnider, 32 N. Y. 629; Todd v. Nelson, 109 N. Y. 316; Matthai v. Heather, 57 Maryland, 483; Kimble v. Smith, 95 Penn. St. 69; Harlan v. Maglaughlin, 90 Penn. St. 293; Curtis v. Fox, 47 N. Y. 301; Phillips v. Wooster, 36 N. Y. 412; Walter v. Lane, 1 MacArthur, 275; Claflin v. Mess, 30 N. J. Eq. (3 Stewart) 11; Babcock v. Eckler, 24 N. Y. 623; Medsker v. Bonebrake, 108 U. S. 66; Baker v. Gilman, 52 Barb. 26; Reed v. Woodman, 4 Maine, 400; Lehmberg v. Biberstein, 51 Texas, 457; Monroe v. Smith, 79 Penn. St. 459; Herring v. Richards, 3 Fed. Rep. 439; Pell v. Tredwell, 5 Wend. 661; Nippe's Appeal, 75 Penn. St. 472; Kempner v. Churchill, 8 Wall. 362; Fuller v. Brewster, 53 Maryland, 361; Washband v. Washband, 27 Connecticut, 431; Seward v. Jackson, 8 Cowen, 430.

Opinion of the Court.

Mr. T. M. Tyng, for appellee, cited: Dudley v. Easton, 104 U. S. 99; Warren v. Moody, 122 U. S. 132; Adams v. Collier, 122 U. S. 382; Young v. Hermans, 66 N. Y. 374; Carpenter v. Roe, 10 N. Y. 227; King v. Wilcox, 11 Paige, 589; Savage v. Murphy, 34 N. Y. 508; S. C. 90 Am. Dec. 733; Smith v. Vodges, 92 U. S. 183; Case v. Phelps, 39 N. Y. 164; Dunn v. Hornbeck, 72 N. Y. 80; Wallace v. Penfield, 106 U. S. 260; Horback v. Hill, 112 U. S. 144; Blennerhasset v. Sherman, 105 U. S. 100; Schmidt v. Schmidt, 48 N. Y. Superior Ct. 520; Lent v. Howard, 89 N. Y. 169; Adair v. Lott, 3 Hill, 182; Coleman v. Burr, 93 N. Y. 17; Reynolds v. Robinson, 64 N. Y. 589; Chew v. Hyman, 10 Bissell, 240; Kerrison v. Stewart, 93 U. S. 155; Whelan v. Whelan, 3 Cowen, 537; Western Railroad v. Nolan, 48 N. Y. 513; Vetterlein v. Barnes, 124 U. S. 169.

MR. JUSTICE BREWER delivered the opinion of the court.

The question in this case is whether certain transfers of property made by John Schreyer to his wife, Anna Maria Schreyer, were fraudulent and void as against Peter J. Vanderbilt, a creditor of John Schreyer. The case is here on appeal from a decree of the Circuit Court for the Southern District of New York, brought by the assignee in bankruptcy of Schreyer against Schreyer individually, and as executor, etc., of his wife, now deceased. The Circuit Court, 25 Fed. Rep. 83, found that the transfers were fraudulent, and decreed that the bankrupt, as executor and trustee, convey the real estate and bonds and mortgages hereafter described to the assignee in bankruptcy. From such decree this appeal has been taken. The facts are these: On January 21, 1871, Schreyer conveyed to his wife the following real estate situated in the city of New York: Nos. 348 and 350 West 39th Street and Nos. 351, 353 and 355 West 42d Street. The title was passed from Schreyer to his wife, by conveyance to Edward Sharkey, and from him to Mrs. Schreyer. On October 15, 1870, Schreyer and his wife conveyed No. 420 West 40th Street to George Gebhart and No. 422 West 40th Street to Matthew L. Ritchie, who each thereupon executed mortgages for $5000 to Mrs. Schreyer.

Opinion of the Court.

These conveyances and mortgages were all recorded in 1871. Notice was thus given, by public record, of title in Mrs. Schreyer to both the real estate and the mortgages. Thereafter, and in 1874, buildings were erected on the two lots last mentioned, the mortgages for $5000 surrendered and two new mortgages taken-one from Gebhart to Mrs. Schreyer for $7750 on premises No. 420 West 40th Street, and one from Ritchie to Mrs. Schreyer for $8850 on premises No. 422 West 40th Street. The claim of Vanderbilt arose in this way: On February 2, 1874, a building contract was entered into between George Gebhart and Matthew L. Ritchie, as owners of premises Nos. 420 and 422 West 40th Street, with Vanderbilt, whereby he covenanted to erect two buildings on said premises for the sum of $8175, to be paid in the following manner: "When the said houses are topped out the payment of five thousand ($5000) dollars, by assignment of mortgage held by John Schreyer on the property of Anna Maria Schreyer, No. 350 West 42d Street, in the city of New York; three thousand one hundred and seventy-five ($3175) dollars when the houses are fully completed as above." On May 5, 1874, Vanderbilt had so far completed his contract that he was entitled to an assignment of the bond and mortgage. He then demanded and received from Schreyer not only an assignment, but a guaranty of the bond and mortgage. There was no new consideration for this guaranty. In 1876 a prior mortgage on the premises covered by the bond and mortgage assigned as above set forth was foreclosed, and swept away the entire property, so that this bond and mortgage became worthless; whereupon Schreyer was sued on his guaranty, and judgment recovered thereon. On September 17, 1878, John Schreyer was adjudged a bankrupt upon a creditor's petition, filed August 23, 1878. Several claims were proved against his estate in bankruptcy, but all have been satisfied except that of Vanderbilt; so that, while this action was brought by an assignee in bankruptcy, it was really for the sole benefit of Vanderbilt. On September 6, 1876, Mrs. Schreyer died, leaving a will by which her property was devised and bequeathed to her children; her husband was named as executor; and he, individually and as executor,

Opinion of the Court.

was the defendant in this suit. And now the contention of the plaintiff below is, that the conveyances of January 21, 1871, and the two mortgages from Gebhart and Ritchie to Mrs. Schreyer in 1874 were fraudulent and void as against the claim of Vanderbilt. The conveyances were made and recorded more than three years prior to the building contract, out of which Vanderbilt's claim arose; and, while the mortgages to Mrs. Schreyer were executed and recorded during the same year with the building contract, yet the obligation assumed by Schreyer was a voluntary one, without consideration, and after a contract expressly providing for payment in another way, was conditional, and only became a fixed indebtedness two years thereafter, when by the foreclosure proceedings the worthlessness of the guaranteed bond and mortgage was developed. Obviously, very clear and direct testimony is essential to support an adjudication that these various transfers were fraudulent and void as against this subsequent creditor. In determining the rules applicable to such transactions reference should be had not only to the decisions of this court, but also to those of the courts of New York, where the parties lived and the transactions took place. Allen v. Massey, 17 Wall. 351; Graham v. Railroad Company, 102 U. S. 148; Wallace v. Penfield, 106 U. S. 260, 263, 264.

In a recent case in the Court of Appeals of New York, Todd v. Nelson, 109 N. Y. 316, 327, that court thus stated the law: "The theory upon which deeds conveying the property of an individual to some third party have been set aside as fraudulent in regard to subsequent creditors of the grantor has been that he has made a secret conveyance of his property while remaining in the possession and seeming ownership thereof, and has obtained credit thereby, while embarking in some hazardous business requiring such credit, or the debts which he has incurred were incurred soon after the conveyance, thus making the fraudulent intent a natural and almost a necessary inference, and in this way he has been enabled to obtain the property of others who were relying upon an appearance which was wholly delusive. Such are the cases cited by the learned counsel for the appellants." See also Phillips