Mullins v. Riopel
| Decision Date | 08 January 1948 |
| Citation | 322 Mass. 256,76 N.E.2d 633 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | FRANCIS D. MULLINS, trustee in bankruptcy, v. ALBERT D. RIOPEL & another. |
September 22, 1947.
Present, QUA, C.
J., LUMMUS, DOLAN RONAN, & WILKINS, JJ.
Fraudulent Conveyance. Gift. Husband and Wife.
A husband, who by way of gift, at a time when he was insolvent, transferred to his wife a bank account which comprised practically all his property, must be found to have intended the natural consequence of such a transfer, which was to hinder, delay and defraud his creditors, even if he had no such actual intent and even if the wife was ignorant of his insolvency or of any such presumed or actual intent on his part.
Sums, saved by a wife by thrift and economy from weekly allowances made to her by her husband for household expenses under an agreement between them that such savings should be hers, constituted gifts to her from him; and, it appearing that at the times of such gifts the husband was insolvent, such gifts must be found to have been made with intent to hinder, delay and defraud his creditors.
A decree for the plaintiff was required in a suit in equity by the trustee in bankruptcy of a husband to compel conveyance to the plaintiff of real estate standing in the name of the bankrupt's wife and purchased by her with funds in a savings bank account in her name where it appeared that such funds were wholly gifts from the bankrupt made to her when the bankrupt was insolvent and constituting fraudulent transfers as to his creditors under G. L. (Ter. Ed.) c. 109A, Section 4.
BILL IN EQUITY filed in the Superior Court on May 15, 1946. The suit was heard by O'Brien, J.
P. V. Rutledge, for the plaintiff.
W. J. Griffin, (D.
P. Callahan, Jr. with him,) for the defendants.
This is a bill in equity brought by the trustee in bankruptcy of Albert D. Riopel against Riopel and his wife, seeking to establish the bankrupt's interest in a certain parcel of real estate which, it is alleged, was purchased in her name with his funds and with intent to hinder, delay or defraud his creditors, and praying for a decree ordering the conveyance of this realty to the plaintiff. After making findings of fact, the judge entered a decree dismissing the bill, from which the plaintiff appealed.
The evidence has been reported and examined, and it is our duty to determine the facts for ourselves, but the findings of fact made by the judge are not to be reversed unless they are shown to be plainly wrong. We can make other and additional findings of fact and we can make a finding different from that made by the judge, if satisfied that his finding is plainly wrong. Lowell Bar Association v. Loeb, 315 Mass. 176 , 178. Gordon v. O'Brien, 320 Mass. 739 , 740.
An examination of all the evidence shows little dispute concerning the material facts. Many of them are settled by documentary evidence, the authenticity of which is unquestioned, and nearly all the rest are established by admissions of the defendants which were not controlled or modified by any other evidence. Indeed, the credibility of the defendants is not attacked relative to any material aspect of the suit. We narrate the material facts found from a report of the evidence. Riopel while a college student in 1925, took title with his sister, Mrs. Dupre, to an apartment property in Worcester which was owned by one Fortier. Mrs. Dupre paid $2,500 in cash, and together with her husband and Riopel gave a first mortgage to an insurance company for $9,000 and a second mortgage to Fortier for $11,500. She continued to make the payments in accordance with the mortgage notes until May, 1932, when the income from the property had diminished to such an extent that she was unable to make further payments. The insurance company entered and took possession under its mortgage in January, 1933, and at a foreclosure sale in April, 1934, sold the property to Fortier for the amount due on the first mortgage. Fortier in 1943 brought an action against Riopel on the second mortgage note. Riopel filed a petition in bankruptcy in 1945, in which Fortier appears as his only creditor, and was later adjudged a bankrupt.
Riopel opened a savings account in his own name in 1926. It became a joint account in 1930 with his sister,
Mrs. Dupre.
This account was transferred on May 16, 1932, to the defendant Ellen R. Riopel, who had married Riopel in June, 1931. This account when transferred to her amounted to $1,775. This account on July 1, 1940, amounted to $5,484.
96 due to interest and deposits made by Mrs. Riopel from amounts saved by her from the weekly allowances given to her by her husband for household expenses. Any savings she might be able to make were to belong to her in accordance with an agreement between them. On July 17, 1940, she purchased a house on Shattuck Street in Worcester for $6,000, taking title in her own name and paying $2,000 in cash, which was withdrawn from the savings account, and $4,000 by a mortgage, which she secured from a bank. The remainder of the account, with the exception of $484.96 which was paid to Riopel, was expended in repairs upon the property. The principal of the mortgage has been reduced by payments made by Mrs. Riopel out of the weekly allowances paid to her by her husband.
We first consider whether Mrs. Riopel's rights in this sum of $1,775 are superior to those of her husband's creditor Fortier, in whose shoes in that respect the plaintiff as trustee in bankruptcy now stands. Thomas E. Hogan, Inc. v. Berman, 310 Mass. 259 . Although at the time of the transfer the bank account was in the name of Riopel and his sister, Mrs. Dupre, there is not the slightest suggestion that the latter ever contributed anything to the account, or that she claimed any interest in it, or that she received any consideration for the transfer to Mrs. Riopel. On the other hand, Riopel opened the account, always dealt with it as his own, at least up to the time of the transfer, and admitted that it was his account. Both defendants testified that the transfer of the account was a wedding present from Riopel to his wife. There was no evidence that the transfer was made in consideration of any mutual promises of marriage. We do not, therefor, reach the question whether an oral prenuptial agreement providing for the transfer of property from one party to another and its transfer subsequent to the marriage, or marriage itself, would be fair consideration for a conveyance of property under G. L. (Ter. Ed.) c. 109A, Section 3. Smith v. Allen, 5 Allen, 454. Deshon v. Wood, 148 Mass. 132. Clark v. McMahon, 170 Mass. 91 . Huntress v. Hanley, 195 Mass. 236.
At the time of her marriage, Mrs. Riopel had $800 which she expended on household furnishings apparently with the knowledge and consent of her husband, but the finding of the judge that Riopel agreed to reimburse her lacks any support in the evidence and cannot stand. The only rational conclusion relative to the matter of consideration for this transfer of the bank account is that it was nothing more than a gift from Riopel to his wife. The account comprised practically all the property he had. And a gift of all his property is prima facie evidence of a fraudulent conveyance as to creditors of the donor, if at the time he was insolvent. Gunn v. Butler, 18 Pick. 248, 252. Rolfe v. Clarke, 224 Mass. 407 , 410, 411, 412. Dorr v. Tracy, 248 Mass. 201 , 205.
At the time of the transfer, and for some time previously and since, Riopel was earning a salary of $2,800. He testified that when he conveyed the account to his wife he had no assets to pay his creditors. Payments on both mortgage notes ceased about the time of this transfer. The principal on both notes at that time amounted to nearly $18,000. Mrs. Dupre and her husband the other comakers on these notes, were apparently of no great financial means. Both notes were secured by mortgages...
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