Court Opinion

ID: 8046817
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:00:16.819376+00
Date Added: 2024-06-11T16:37:31.900356
License: Public Domain

Doe, J.
If the plaintiff sought to hold the land fraudulently-conveyed by the defendant to the trustees, the trustees would have no right of lien or set-off for advancements or expenses, because, when the plaintiff had avoided the fraudulent conveyances, by the levy of an execution, all right and title of the trustees would be lost, and the conveyances would be wholly and absolutely void. The trustees would have no more claim upon the land, as against the plaintiff', than they would have if the land had not been conveyed to them. In that case, the plaintiff would proceed upon the ground that so far as their rights were concerned, the title of the lands never passed to the trustees.
But in this proceeding the plaintiff admits that the title passed to them, and claims the proceeds of the land sold by them. These proceeds can not be claimed upon the ground that they were fraudulently transferred by the defendant to the trustees. But the plaintiff may hold, by this equitable process, the money realized by the trustees from the fraudulent transaction, which in equity should go to the defendant’s creditors. If the trustees made any advancements to the defendant, which were attempted to be secured by the voidable mortgages, those advancements are comprised and included in the proceeds received by the trustees from the sale of the land, and that part of the proceeds which represents those advancements does not equitably belong to the defendant or his creditors. Nothing but the general balance of profits accruing to the trustees can be said to be equitably applicable to the payment of the defendant’s debts. The trustees should gain nothing, and lose nothing. The instructions upon this point were erroneous.
Whether the trustees are accountable for the proceeds of the land, the title of which they acquired by the levy of executions issued in suits commenced by creditors whose claims were valid, and whose interest the trustees had purchased before judgment, depends upon the question whether the trustees acted in that matter as agents of the defendant, or for his benefit, or held the proceeds in trust for him. The land was not levied upon to satisfy claims originally fraudulent, as was the case in Esty v. Long, 41 N. H. 103, but the claims being valid when held by other parties, continued valid in the hands of the trustees, unless there was some agency, trust, or special fraud in which the defendant participated. If by any agreement or understanding between the defendant and the trustees, the trustees were to hold the proceeds of the land, or any part thereof, for the benefit of the defendant, they might be chargeable. The instruction given to the jury that, if the trustees made the levies for the purpose of covering up the defendant’s property in order to hinder, delay, and defraud creditors, the levies were void as against creditors, might imply that the purpose must be to cover up the defendant’s property for his use or benefit. But it is not necessary to consider whether the charge should have been more full and explicit on this point, or whether the trustees should have requested more particular instructions.

Verdict set aside.