Opinion
No. 3251.
Decided June 3, 1941.
One who purchases property with knowledge that his vendor's purpose in making the conveyance is to defeat a possible attachment, and takes the conveyance to protect his vendor against it, participates in the fraud, although he pays full consideration therefor.
Circumstances strongly suggestive of fraud may render direct proof of it unnecessary.
BILL IN EQUITY, to set aside a conveyance or real estate as being in fraud of creditors. Trial by the court and decree for the plaintiff. Subsequently the defendants moved that the decree be set aside upon the ground that it is against the law and the evidence. The motion was denied and the defendants excepted. All questions of law raised by this exception were reserved and transferred by Young, J.
From the findings of the court the following facts appear. Two days before the conveyance in question, the defendant Stanley was involved in an automobile accident in which the plaintiff Kelly was injured. The purchase price of $2,800 was actually paid in cash or its equivalent and this price was approximately what the property was worth and therefore adequate. "The defendants Joseph and Katrina knew about Stanley's accident, and that Joseph appreciated the likelihood of a suit by the plaintiff, and took the place over in his and his wife's names, for two reasons, first to secure himself for what Stanley owed him then and for what he was about to advance and second, to protect Stanley against attachment and levy if the plaintiff brought suit." Although the defendants Joseph and Katrina paid what the property was fairly worth, they took title "to help Stanley protect himself against the outcome of the expected litigation" and later encumbered the property with two mortgages, one of which was fictitious. "This the court believes to be fraud and so rules."
Frank B. Clancy and Albert Terrien (Mr. Terrien orally), for the plaintiff.
Ivory C. Eaton (by brief and orally), for the defendants Joseph and Katrina Simoutis.
Thomas J. Leonard, for Stanley Simoutis, furnished no brief.
Bolic A. Degasis, for the defendant, John Ukryn, furnished on brief.
"He who purchases or takes a mortgage of property, with knowledge of the fraudulent design of the vendor or mortgagor thereby to defeat, hinder or delay his creditors, is, in law, charged with a participation in the fraud, although he may pay a full consideration and take immediate and open possession." Robinson v. Holt, 39 N.H. 557, 561, 562; P. L., c. 361, ss. 7, 11. This rule of law, plus the specific finding of the court that the conduct of Joseph and Katrina was fraudulent, required the overruling of the defendants' exceptions.
The assertion of the defendants that there was no evidence to support the finding that the defendants accepted the conveyance "to protect Stanley against attachment and levy if the plaintiff brought suit," if now open to the defendants, is without merit. The circumstances were strongly suggestive of fraud and "direct proof of the fraud" was unnecessary. McConihe v. Sawyer, 12 N.H. 396, 402.
Exceptions overruled.