Finance Corp. of New England v. Scard

• Decision Date: 02 June 1924
• Citation: 100 Conn. 712,124 A. 715
• Court: Connecticut Supreme Court
• Parties: FINANCE CORPORATION OF NEW ENGLAND v. SCARD.

124 A. 715

100 Conn. 712

FINANCE CORPORATION OF NEW ENGLAND v. SCARD.

Supreme Court of Errors of Connecticut.

June 2, 1924

Appeal from Superior Court, New Haven County; James H. Webb, Judge.

Suit by the Finance Corporation of New England against Rosina Scard. Decree for plaintiff, and defendant appeals. Error; decree modified.

Evidence that a conveyance was made without consideration with full knowledge and intent of grantors and grantee for the purpose of avoiding grantors' obligation upon a note held to justify setting aside conveyance.

Donald C. McCarthy, of Hartford (Benedict M. Holden, of Hartford, on the brief), for appellant.

J Gilbert Calhoun, John C. Blackall, and Edward W. Broder, all of Hartford, for appellee.

WHEELER, C.J.

George Scard devised to his three sons, Moses, George, and Simeon all the remainder of his estate, including a farm in Wallingford, provided that they should support his wife so long as she remained his widow, and also his daughters Charlotte and Rosina, so long as they remained unmarried. The widow deceased, and Charlotte married. The three sons had been since the death of their father in the sole and exclusive possession and ownership of the farm. Subsequently the three sons became interested as stockholders and otherwise in the Suffield-Berlin Trap Rock Company, and on October 25, 1919, indorsed with others a note for $25,000 made by that company and payable in one year to the plaintiff. During the year the company was in financial difficulties, and a receiver in bankruptcy was appointed, and it developed that these indorsers who were liable jointly and severally would be asked to meet their liability, and it did in fact accrue. Plaintiff instituted suit on January 15, 1921, against the receiver, not citing in the Scard brothers, because it did not know they owned property but on January 27, 1922, they were made parties defendant.

On June 23, 1921, the Scard brothers conveyed by warranty deed this farm to their sister, the defendant, Rosina, and received from her no consideration for the transfer, and took back no mortgage in payment. The conveyance to Rosina was for the purpose of preventing its being taken or levied upon to satisfy the obligation of the brothers arising from their indorsement upon this note. The farm was, at the time of the conveyance, and now is, of the value of from $15,000 to $16,000, and is subject to a mortgage of $11,000. At the time of the conveyance the Scard brothers were possessed of other land of the value of $2,500, and personal property not exceeding in value $3,000, and were possessed of no other property.

The court reached the conclusion from these subordinate facts that this conveyance was made without consideration, and made with the full knowledge and intent of the grantors and grantee of this conveyance for the purpose of avoiding the obligation of the grantors arising from their indorsement upon this note. The facts found amply support the decree. The conveyance was made without consideration of any kind from defendant; the purpose and intent of the grantors was to prevent the property conveyed being taken or levied upon to satisfy their obligation arising upon their indorsement upon the note; this was with the full knowledge of the grantee, defendant herein and the property of the Scard brothers, grantors, was at this time inadequate to meet the judgment obtained in the action upon the note. The facts found are those alleged in the complaint, which was not demurred to. They depict the making of this fraudulent conveyance for the purpose of preventing the plaintiff from having the property so conveyed appropriated toward the payment of this judgment, and that all of this was done with the knowledge of the defendant grantee of this purpose.

The defendants' argument that there are no facts found showing that an injury was done the plaintiff, or that there was any intent on the part of the Scard brothers to prevent the plaintiff obtaining satisfaction of the judgment for $27,508.33, or that the plaintiff was in any way defrauded, is completely refuted by the facts found; against these it is futile to contest these points without securing the correction of the finding, and the evidence does not support such correction. The further claim that the evidence showed that there was a valuable consideration for this conveyance overlooks the fact that there was a conflict in the evidence as to the fact of a consideration, and the trial court found, as the evidence justified it in doing, against the contention of the defendant.

Likewise the issue as to whether defendant, Rosina Scard, had any knowledge of any fraudulent intent on the part of her brothers was a fair inference for the trial court to draw, and this it has drawn against the defendant. The defendants make as their final point that the remedy at law must be exhausted before equity will aid the plaintiff creditor to set aside the conveyance to the Scard brothers, and that the exhaustion of the legal remedy is only evidenced by an execution returned unsatisfied. There is no occasion to allege in the complaint, in terms, that there is not adequate remedy at law.

" It is enough if it appear from the facts disclosed in the bill that such remedy does not exist." Botsford v. Beers, 11 Conn. 369, 373.

The complaint in the instant case alleges that the purpose of the conveyance was to defraud the plaintiff of any effectual remedy, and to prevent the enforcement of plaintiff's judgment, and to prevent the property conveyed being taken on legal process, and that plaintiff is in imminent danger of having its remedy defeated by defendant conveying the property so conveyed to her. The complaint in this particular would have withstood a demurrer. If defendant had desired a more particular specification, she could have obtained this by proper motion.

In the finding appears this specification: The...