Opinion ID: 2388540
Heading Depth: 1
Heading Rank: 1

Heading: Were Dasa Investments, Inc. and Security National Bank necessary parties to this suit?

Text: The testimony revealed that Willowbrook had transferred the note to the Damazos in early July, 1968, shortly after the sale of Edwards Way. The Damazos then transferred the note to Dasa Investments, Inc. (Dasa), another corporation controlled by the Damazos. Dasa, in turn, pledged the note to Security National Bank as collateral for a loan. The Damazos make much of the fact that the court could not proceed without having Dasa and Security National Bank before it as parties. The short answer to this contention is that the Damazos would be right if satisfaction of his judgment from the note had been the only relief which Wahby had prayed. This, however, was not the case, since he sought alternatively the return of the note or a judgment in personam against the Damazos. Wahby is quite correct when he says that a third person through whom a fraudulent conveyance passes, who does not participate in the fraud is not a necessary party to a fraudulent conveyance action, relying on Walter v. Riehl, 38 Md. 211, 219-21 (1873), even though he may be a proper party, Atlantic Lumber Corp. v. Waxman, 162 Md. 191, 197, 159 A. 593 (1932). Nor do we regard an innocent party who is the ultimate recipient of the subject of the fraudulent conveyance as a necessary party if no effort is made to satisfy the creditor's claim from that which the innocent recipient holds. See Annot., Necessary Parties Defendant to Action to Set Aside Conveyance in Fraud of Creditors, 24 A.L.R.2d 395, §§ 17, 18 at 424, 428 (1952); 37 Am.Jur.2d, Fraudulent Conveyances § 202 at 861-62 (1968).