Watkins v. Arms

• Decision Date: 30 July 1886
• Citation: 6 A. 92,64 N.H. 99
• Parties: WATKINS v. ARMS.
• Court: New Hampshire Supreme Court

6 A. 92

64 N.H. 99

WATKINS

v. ARMS.¹

Supreme Court of New Hampshire.

July 30, 1886.

Reserved case from Cheshire county.

Bill in equity to annul a deed of land and a transfer of bank stock.

March 2, 1885, the plaintiff attached the land and stock, and, after obtaining a judgment, levied upon them as the property of A. S. Watkins. March 9, 1885, said Watkins filed his petition in the insolvency court of Windham county, Vermont; was adjudged an insolvent debtor, March 21, 1885; and on the same day all his estate was conveyed to his assignee, by deed, which, by the law of that state, relates back to the date of the petition. The defendant and Watkins are citizens of Vermont. October 17, 1884, said Watkins, being then insolvent, and indebted to the defendant in the sum of $2,838.72, gave the defendant his note for $3,775.49, and a mortgage to secure its payment. The mortgage covered certain lands belonging to his wife, who joined in the mortgage. February 24, 1885, the defendant, at the wife's request, released her property from the mortgage, and, as a substitute for it, Watkins, with no intention to hinder or delay his creditors, gave the defendant an absolute deed of the land, and a like transfer of the bank stock, to be held by him as security for the mortgage debt.

Mr. Lovell and Batchelder & Faulkner, for plaintiff.

Mr. Eddy, for defendant. '

CARPENTER, J. The plaintiff's rights are not affected by the insolvency proceedings in Vermont. Perley v. Mason, 64 N. H. 6; S. C. 3 Atl. Rep. 629; Carbee v. Mason, 64 N. H. 10, S. C. 4 Atl. Rep. 791, and cases cited. The conveyance of the land and bank stock to the defendant was absolute in terms, but was in fact a mere security. Watkins, upon payment of the mortgaged debt, was entitled to a reconveyance. This is a secret trust, and fraudulent in law, though no fraud was in fact intended. Stratum v. Putney, 63 N. H. 577, S. C. 4 Atl. Rep. 876, and cases cited.

Decree for the plaintiff.

ALLEN, J., did not sit. The others concurred.

NOTE.

FRAUDULEST CONVEYANCE. A conveyance absolute in form, but with a secret understanding for reconveyance, or of other benefit to the grantor, is void against creditors, Stratton v. Putney, (N. H.) 4 Atl. Rep. 876; Gnggenheimer's Appeal, (Pa.) 4 Atl. Rep. 46, and note; Mitchell v. Sawyer, (Ill.) 5 N. E. Rep. 109; Smith v. Conkwright, (Minn.) 8 N. W. Rep. 876; but in Michigan it is held that such a conveyance is not per se fraudulent, as fraud is solely a question of fact...