Fletcher v. Tuttle

54 A. 1110, 97 Me. 491, 1903 Me. LEXIS 44
Supreme Judicial Court of Maine·Decided April 27, 1903·Published·Cited by 5 cases

Opinion

Wiswell, C. J.

This case comes to the law court upon the complainants’ exception to the ruling of the sitting justice sustaining a demurrer to the complainants’ bill in equity.

The complainants base their claim for relief upon these facts, either alleged in the bill, or which, it is agreed may be considered as if alleged. On March 6, 1893, certain real estate, paid for out of the property of the respondent, Fred Tuttle, was conveyed to his wife, Ella M. Tuttle, the other respondent; subsequently the husband [493] made extensive improvements upon this real estate, which were also paid for out of his property. It is alleged that this conveyance to the wife w&s made for the purpose of defrauding the creditors of the husband, who was at the time insolvent; prior to the time of the conveyance the complainants were creditors of Fred Tuttle, by virtue of a note given by him to them on Nov. 16, 1889, which indebtedness has never been paid; on August 31, 1897, they commenced suit upon this note against Fred Tuttle and caused his real estate, and especially all his right, title and interest in and to the real estate conveyed to his wife to be attached; while that action was pending, on Dec. 9, 1899, the defendant in that action filed his petition in bankruptcy, was subsequently adjudged a bankrupt, and still later received his discharge; the plaintiffs thereupon discontinued as to the defendant, the cause of action being one that was provable in bankruptcy, but took judgment against the property claimed to have been attached; execution was issued upon this judgment, upon which the plaintiffs caused the property claimed to be attached to be seized and sold by the sheriff at public auction, all of the statutory provisions in relation to such seizure and sale having been observed; the property was bought in by the judgment creditors, the complainants in this bill, they being the highest bidders therefor. This bill in equity was then commenced by them in which they seek to have perfected the title thus attempted to be acquired by the seizure and sale on execution, to have the conveyance to the wife adjudged fraudulent, and to obtain a decree ordering the respondents, the defendant in the original action and his wife, to convey the premises to the complainants.

In the case of Stickney and Babcock Coal Company v. Goodwin, 95 Maine, 246, this court decided, following previous decisions of the court upon the same question under a former bankruptcy act, that an attachment of real estate made more than four months prior to the time of filing the petition in bankruptcy, by or against the defendant, is not dissolved by the filing of such petition and the subsequent proceedings in bankruptcy; and that where there is a valid and existing attachment, which has not been dissolved by. the bankruptcy proceedings, the plaintiff may have judgment against the property attached, although the cause of action is provable in bank[494] ruptcy and a personal judgment against the debtor is thereby prevented. In this case the petition in bankruptcy was not filed until more than two years after the attempted attachment, so that if there was a valid attachment it was not thereby dissolved and the judgment against the property attached was properly rendered. If, upon the other hand, there was no attachment, then this judgment is of no consequence and the basis of this proceeding in equity fails.

This raises the question as to whether or not an attachment can be made of real estate, in a common law action, the legal title to which was never in the defendant but which was paid for out of the property of the husband and conveyed by a third party to the wife for the purpose of hindering, delaying and defrauding the husband’s creditors, the suit being commenced by a creditor whose debt existed prior to and at the time of such conveyance.

It is well settled by numerous decisions that where the title to real estate was once in the debtor but has been conveyed by him for the purpose of defrauding his creditors, an attachment may be made and the property subsequently seized upon execution, precisely as if no such conveyance had been made or attempted, a conveyance under these circumstances being regarded as void as to a creditor who was intended to be defrauded. After title has been acquired by the levying creditor, he may maintain an action at law to recover possession of the premises, or he may resort to equity to have the apparent cloud upon his title removed. The right to make a levy upon premises thus fraudulently conveyed being expressly given by statute. K,. S., c. 76, § 14.

It is equally well settled in this State, notwithstanding the provision of It. S., c. 61, § 1, whereby, “when payment was made for property conveyed to her (the wife) from the property of her husband, or it was conveyed by him to her without a valuable consideration, it may be taken as the property of her husband, to pay his debts contracted before such purchase,” that property, the title to which is acquired by the wife by a conveyance from a third person, under these circumstances, can not be taken by levy of execution so as to transfer the legal title to the levying creditor. That is, in cases where the debtor has never had the legal estate, but has paid [495] the purchase money, and caused the land to be conveyed by a third person to his wife, he has never had any title that can be seized on execution. In such a case the creditor must resort to equity in order to take the property standing in the name of the wife, which, under the statute above cited, may be taken as the property of the husband to pay his debts contracted before such purchase. Corey v. Greene, 51 Maine, 114; Low v. Marco, 53 Maine, 45, and numerous other cases.

Under these circumstances can a prior existing creditor acquire a lien by attachment of the property which will not be affected by bankruptcy proceedings commenced more than four months after such an attachment was made? Or, in other words, can real estate be attached upon mesne process which can not be seized upon the execution issued on the judgment recovered hi the action upon which the attachment was made? The determination of this question necessarily depends upon the statutory provisions in this State.

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Fletcher v. Tuttle, 54 A. 1110, 97 Me. 491, 1903 Me. LEXIS 44 (Me. 1903).

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