Opinion ID: 200889
Heading Depth: 2
Heading Rank: 1

Heading: Valente's Interest in the Middletown Property

Text: 18 Throughout these proceedings, Fleet has maintained that Valente retained equitable ownership of the transferred property and that this ownership was an attachable interest. This claim has a sound basis in Rhode Island law, which uses the resulting trust doctrine to explain the nature of this equitable interest. 3 For example, when the debtor in Tucker v. Denico, 27 R.I. 239, 61 A. 642, 645 (1905), took property in his wife's name in order to keep that property out of the reach of his creditors, the Rhode Island Supreme Court recognized this transaction as a fraudulent transfer and imposed a resulting trust upon the property for the creditors' benefit. 4 Likewise, in Mitchell v. Campbell, 48 R.I. 120, 122, 136 A. 249 (1927), the court effectively imposed a resulting trust by holding that an attachable interest is created [w]hen a conveyance for the purpose of defrauding creditors is made of the legal title to real estate without any intention of passing the beneficial interest therein. The equitable interest found by the courts in these cases sufficed to provide the creditors relief from the debtors' fraudulent attempts to avoid attachment. 19 Valente's fraudulent transaction with his son fits readily into the resulting trust model. According to the Restatement (Second) of Trusts: 20 A resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest therein, unless the inference is rebutted or the beneficial interest is otherwise effectively disposed of. 21 Restatement (Second) Trusts, § 404. See also United States v. One Parcel of Real Prop. with Bldgs., 942 F.2d 74, 82 (1st Cir.1991) (In general, under Rhode Island law, a resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest therein.) (Campbell, J., dissenting); Reilly v. Wheatley, 68 F.2d 297, 299 (1st Cir.1933) (stating that [r]esulting trusts ... arise where there is a conveyance without consideration, and from the surrounding facts and circumstances it is apparent that the grantor was still to retain his beneficial ownership). 22 Valente transferred the property to his son for no consideration shortly before he declared bankruptcy because he couldn't afford to keep the house any longer. The two had an understanding that Valente was going to live in the house, and he continued to treat the property as his own by, inter alia, paying all of the bills, managing the lease and sale of the property, running a business on the premises, and not paying rent. His son admitted that his father's aim was to scam somebody or scam something. He also testified that he returned the property, for no consideration, when his father told him that he was interested in selling it. This evidence compels a finding of a resulting trust, 5 with Valente's son holding legal title to the Middletown property in trust for his father, who retained the equitable interest in the property at the time of the transfer to his son. 6 Hence, we must now evaluate whether Fleet could have attached that interest or otherwise secured relief in a Rhode Island court.