Rioux v. Cronin

• Decision Date: 18 October 1915
• Citation: 222 Mass. 131,109 N.E. 898
• Parties: RIOUX v. CRONIN et al. OHDE v. SAME.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

222 Mass. 131

109 N.E. 898

RIOUX

v.CRONIN et al.

OHDE

v.SAME.

Supreme Judicial Court of Massachusetts, Hampden.

Oct. 18, 1915.

Appeal from Superior Court, Hampden County; Henry A. King, Judge.

Bills by Joseph Rioux and by Julius M. Ohde against Patrick J. Cronin and others. From decrees for plaintiffs, defendants appeal. Affirmed.

James O'Shea, of Holyoke, for appellant Cronin.

Nathan P. Avery, of Holyoke, pro se.

Ellis, Brewster & Ellis, of Springfield, for appellee Ohde.

Harry A. Buzzell, of Springfield, for appellee Rioux.

RUGG, C. J.

These cases come before us by appeal after final decree entered upon the findings of a master. The evidence is not reported except as a part of it appears in the master's findings. The facts disclosed in the master's report must stand as true. Cook v. Scheffreen, 215 Mass. 444, 102 N. E. 715.

The finding of the master to the effect that the conveyance by Patrick J. Cronin of real estate in Holyoke to his wife, Ellen Cronin, was without consideration and intended to delay, defeat and defraud creditors and void, is not attacked and must be accepted as true. The facts narrated in the master's report rendered this conclusion inevitable.

The master did not make a definite finding upon the point whether the shares of bank stock in the Springfield National Bank were transferred by Patrick J. Cronin to his wife in fraud of creditors. Under a rule to find the facts it was the master's duty to make an unequivocal finding upon this point which was put in issue by the pleadings. But the motion to recommit for the purpose of making this finding need not have been granted provided enough appeared upon the face of the report to enable the court to reach a conclusion. We are of opinion that the report contained sufficient facts to warrant a satisfactory decision.¹ It is in effect a statement of all the material evidence upon the point.

As the cases were heard by the judge upon the master's report alone, this court receives the cases as to the facts and the inferences to be drawn from them as did the superior court judge. Harvey-Watts Co. v. Worcester Umbrella Co., 193 Mass. 138, 78 N. E. 886. The power and duty of the court to draw inferences from facts found cannot be disputed. Fairbanks v. McDonald, 219 Mass. 291, 297, 106 N. E. 1000.

The plaintiffs allege that this stock was conveyed fraudulently. The burden is on them to prove that allegation. Mere disbelief of the testimony offered by the defendants, when that is the only evidence, is not affirmative proof and does not establish the fraud nor sustain the burden of proof resting on the plaintiffs. The cases then would stand as if there were no evidence. Nevertheless the testimony, although not worthy of credence, might be of such character as to lead to the conclusion that if the transaction were honest such testimony would not have been presented, and thus might tend to support the affirmative burden resting on the plaintiffs. But not having seen the witness, Patrick J. Cronin, nor observed his manner of testifying, it cannot be said that the statementsmade by him were so inherently improbable as to afford presumptive evidence of fraud. He alone testified. If his testimony was true, his daughter and wife both knew material facts concerning the purchase of the stock out of the savings of the wife. The wife was a party to the suits. Neither of these were called as witnesses, nor is any explanation offered for their failure to testify. Considering their kinship and interests, the fact that they were not called affords legitimate basis for an inference adverse to the contention of the defendants. Howe v. Howe, 199 Mass. 598, 85 N. E. 945,127 Am. St. Rep. 516;Buckley v. Boston Elev. Ry., 215 Mass. 50, 56, 102 N. E. 75;Chandler v. Prince, 217 Mass. 451, 458, 105 N. E. 1076.

Moreover, it is found as a fact that the plaintiff Ohde having made specific inquiries at the bank, relied to some extent upon the apparent ownership of the bank stock by Patrick J. Cronin in becoming his creditor. The general trend of authority is that, where a wife vests her husband with the title and possession of property and permits him to hold himself out to the world as the owner and others give him credit on the strength of this appearance of wealth, she is estopped to deny as against such creditors to the extent of their debts that he was the owner.²

The real estate was conveyed to the wife in fraud of creditors of the husband on December 7, 1912. That is a fact in the cases. The transfer of the bank stock was made to the wife five days later while substantially the same creditors were in existence and the same incentive to defraud creditors continued. As was said in Jordan v. Osgood, 109 Mass. 457, 461 (12 Am. Rep. 731):

‘Another act of fraud is admissible to prove the fraud charged only where there is evidence that the two are parts of one scheme or plan of fraud, committed in pursuance of a common purpose.’

See Com. v. Dow, 217 Mass. 473, 480, 105 N. E. 995;Com. v. Farmer, 218 Mass. 507, 512, 106 N. E. 150.

That principle is applicable to the cases at bar. Under all these circumstances we draw the inference from the evidence reported that Patrick J. Cronin was the owner of the bank stock and that the transfer to Ellen J. Cronin was in fraud of creditors.

The bill in each case alleges that the plaintiff has recovered judgment in an action at law against Patrick J. Cronin, which is unsatisfied. The bill of Rioux alleges in terms that execution has issued and has been returned wholly unsatisfied. This averment appears to be admitted and is found in substance to be true by the master. The bill of Ohde does not in terms allege that execution issued on the judgment, but that fact is found by the master. The suits are brought to cause stock in the Springfield National Bank, standing in the name of Ellen Cronin but averred to have been transferred to her by Patrick J. Cronin in fraud of his creditors, to be used so far as necessary for the payment of these judgments and executions. The Springfield National Bank, Patrick J. Cronin and Ellen Cronin are made parties defendant. The suit of Rioux was filed on March 19, 1913, and that of Ohde on May 24, 1913. An injunction was issued in the Rioux suit on March 20, 1913, and in the Ohde suit on June 18, 1913, restraining all the defendants from transferring any of the shares of stock. All the defendants appeared and answered. The defendant Patrick J. Cronin died on November 2, 1913, after having testified before the master. The administrator of his estate appointed on May 15, 1914, has appeared and contends that, if the shares of stock were the property of Patrick J. Cronin, they should be delivered to him for administration according to law.

Certificates of stock in the Springfield National Bank were issued in the name of the defendant Ellen on December 11, 1912. Hence, St. 1910, c. 171, known as the Uniform Stock Transfer Act, which took effect on March 5, 1910, by section 23 applies to it. It is provided by section 13 of that act:

‘No attachment or levy upon shares of stock for which a certificate is outstanding shall be valid until such certificate be actually seized by the officer making the attachment or levy, or be surrendered to the corporation which issued it, or its transfer by the holder be enjoined.’

As injunctions were issued against the transfer of this stock, the plaintiffs are not barred by the provisions of that act. Whatever may be the nature of the present proceedings, whether under general principles of equity or under the statute to reach and apply, there was ample authority in the court to issue injunctions to secure under the Uniform Stock Transfer Act rights which creditors, execution or otherwise, might have had difficulty in acquiring. R. L. c. 166, § 1.

The question arises, therefore, whether the plaintiffs have acquired a lien upon the shares of stock which survives the death of the principal debtor and which the creditor can enforce under these circumstances.

The mere filing of a bill to reach and apply, under R. L. c. 159, § 3, clauses 7 and 8, property of the debtor to the payment of a creditor's claim which has not been reduced to judgment, creates no lien in favor of the creditor. That was decided in substance in Fish v. Fiske, 154 Mass. 302, 28 N. E. 278. The filing of such a bill under the statute, accompanied by the issuance of an injunction, does create a lien in favor of the creditor. Snyder v. Smith, 185 Mass. 58, 69 N. E. 1089. The present differ from each of these cases. The plaintiff in each case had reduced his claim to judgment on which execution had issued and was unsatisfied.

The distinction between creditors' bills, and the relief afforded under R. L. c. 159, § 3, clauses 7 and 8, which does not fall under any pre-existing head of equity, often has been alluded to. Stockbridge v. Mixer, 215 Mass. 415, 102 N. E. 646, and cases there collected.

The statement in the master's report that these suits are brought under the statute means no more than a narration of what was assumed to be the law. The real nature of the suits must be determined from their form and substance and the relief sought. But since an injunction issued in each case against the transfer of the stock it is not necessary to decide whether these suits are creditors' bills under general equity jurisprudence to enforce the levy of an execution, or are statutory suits to reach and apply. In either case the result is the same.

If they are creditors' bills, these are the governing principles: The bringing of a suit by a judgment creditor, whose execution is unsatisfied, to reach and apply property of the debtor not susceptible of seizure at common law on the execution, is the commencement of a levy on the execution. Resort to equity for the purpose of enforcing the collection of an execution was adverted to in Parkhurst v. Almy, 109 N. E. 733, as a well recognized branch of equity. It formed the basis...