Ricker v. Mathews

• Decision Date: 06 May 1947
• Docket Number: No. 3601.,3601.
• Parties: RICKER v. MATHEWS et al.
• Court: New Hampshire Supreme Court

53 A.2d 196

RICKER

v.MATHEWS et al.

No. 3601.

Supreme Court of New Hampshire.

May 6, 1947.

COPYRIGHT MATERIAL OMITTED.

Transferred from Superior Court, Hillsborough County; Blandin, Chief Judge.

Suit to foreclose a mortgage by John H. Ricker against Edward Mathews and another, wherein trustees of Pelham Trust, a Massachusetts business trust, intervened and sought to set aside the mortgage as in fraud of creditors. The mortgage was set aside as in fraud of creditors, and the cause was transferred on plaintiff's exceptions to the findings and rulings.

Exceptions overruled.

Bill in equity, to foreclose a mortgage from the defendant and his wife to the plaintiff on land in Antrim, New Hampshire, to which the defendant filed a consent judgment. The intervenors are the Trustees of Pelham Trust, a Massachusetts business trust, who obtained a judgment against the defendant in Massachusetts and levied on his interest in the Antrim property in this state. Trial by the court, Blandin, C. J., who dismissed the intervenor's petition to set aside the mortgage of the Antrim property as a fraudulent conveyance and made the following findings of fact:

‘1. The relations between John H. Ricker, hereinafter called the plaintiff, and Edward Mathews, hereinafter called the defendant, culminating in the disputed mortgage given by the defendant to the plaintiff covering real estate in Antrim, New Hampshire, which the intervenors, the Trustees of the Pelham Trust, seek to set aside as in fraud of creditors, were most unusual and such as to raise a strong suspicion of fraud in the mind of the Court.

‘2. The defendant purchased certain real estate in Weymouth Massachusetts for $12,000.00 in 1927 and thereafter, on May 25, 1929, before the depression, he mortgaged it to the South Shore Cooperative Bank of Weymouth for $7000.00.

‘3. Between May 25th, 1929 and June 1st, 1937 the defendant, on undetermined dates, spent approximately $5000.00 on this property for improvements.

‘4. Shortly before June 1st, 1937, at which time the defendant's insolvency was known to the plaintiff, an arrangement was made between the plaintiff and the defendant whereby the defendant conveyed his equity, by deed, in the Weymouth property to the plaintiff, who took it subject to the mortgage which had then been reduced to $4,305.53.

‘5. As a part of the same arrangement, and at approximately the same time, the plaintiff conveyed certain real estate in Antrim, New Hampshire to the defendant, taking from the defendant the disputed mortgage dated June 1st, 1937, for $2400.00. The parties agreed to call the value of this property $3500.00, $1000.00 of the purchase price bring allowed the defendant by the plaintiff on account of his equity in the Weymouth real estate.

‘6. The value of the Antrim property on June 1st, 1937 was between $2500.00 and $3000.00.

‘7. Subsequent to his purchase of the Antrim real estate, the defendant invested two to three thousand dollars in improving it.

‘8. In the absence of sufficient evidence on which to base a finding that the value of the Weymouth property on or about June 1st, 1937 was appreciably in excess of around $5300.00, the Court does not find any intent on the part of either the plaintiff or the defendant to hinder, delay or defraud creditors in relation to the mortgage on the Antrim property.’

The case was reopened on petition of the intervenors who produced testimony of experts that the real estate at Weymouth, Massachusetts was worth $6,800 to $7,500 in June 1937.

Upon reconsidering all the evidence, including the value of the Weymouth property, the court set aside the mortgage of the Antrim property as in fraud on creditors and substituted the following finding of fact relative to fraud:

‘1. The disputed mortgage on the Antrim property was given for the purpose of hindering, delaying and defrauding creditors.’

Other facts appear in the opinion.

Transferred by Blandin, C. J., on the plaintiff's exceptions to the findings and rulings.

Thomas J. Leonard and John R. Spring, both of Nashua (John R. Spring, of Nashua, orally), for plaintiff.

Defendants, pro se.

Choate, Hall & Stewart and Bailey Aldrich, both of Boston, Mass., Hamblett & Hamblett, of Nashua, and George M. Yaghijian, of Boston, Mass., (Bailey Aldrich, of Boston, Mass., orally), for intervenors.

KENISON, Justice.

This case is governed by the Uniform 419, § 7), which reads as follows: ‘7. Conveyance, Intent to Defraud. Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay or defraud either present or future creditors is fraudulent as to both present and future creditors.’ The first question presented is whether the court's finding of fraud is supported by the evidence. There is no serious dispute in the evidence that the defendant was insolvent, involved in patent and other litigation, had made an assignment for the benefit of creditors (which did not include the mortgage property as an asset), and these facts were known to the plaintiff when he received the deed to the Weymouth property and the disputed mortgage on the Antrim property. Furthermore, the defendant lived in the Weymouth property several years after he had deeded it to the plaintiff, paying only occasional rent, and no payments of either principal or interest on the Antrim mortgage were made from 1937 until 1943. Other factors pertinent to the issue of fraud include a statement of the defendant a week before the trial: ‘if John [plaintiff] loses the property, I will lose the property.’ This statement was pertinent as showing the extent to which the disputed mortgage was intended to be a bona fide transaction. Some weight also may be attached to the action of the plaintiff and the defendant foreclosing the mortgage by consent only after the intervenors levied on the defendant's equity of redemption. ‘The circumstances were strongly suggestive of fraud and ‘direct proof of the fraud’ was unnecessary.' Kelly v. Simoutis, 91 N.H. 407, 408, 20 A.2d 628, 629. It cannot be said as a matter of law that the findings of the Court are without support on all the evidence.

Exceptions were seasonably taken by the plaintiff to the ruling of the Court allowing the intervenors to reopen the case. The exception is overruled. ‘It has long been understood in this state that, after a case has been closed, the court may, in its discretion, reopen it for introduction of additional testimony and that the exercise of its discretion will not be revised by this court. Wells v. Burbank, 17 N.H. 393, 412.’ Snook v. Portsmouth, 90 N.H. 441, 443, 10 A.2d 654, 656.

After the court made its amended findings and rulings, the plaintiff excepted to the denial of his motion to reopen the case a second time. The discretionary ruling of the court raises no question of law. Smith v. Bailey, 91 N.H. 507, 509, 23 A.2d 363; Danos v. Manchester Coal & Ice Co., N.H., 49 A.2d 926. Assuming that there may be cases where the discretionary ruling of the Trial Court may be set aside for an abuse of discretion, an erroneous application of the law or to prevent injustice, they have no application in this case. The plaintiff had been asked repeatedly during cross-examination to produce any papers bearing on the realtions between him and the defendants. The court may have properly decided that this evidence was not mislaid as claimed or that due diligence has not been exercised. While this is not the fault of the present counsel for the plaintiff, who did not participate in the trial, they necessarily must take their client in the position which he had placed himself previously.

The plaintiff in his able argument...