Court Opinion

ID: 6420975
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:59:45.612471+00
Date Added: 2024-06-11T15:51:46.573557
License: Public Domain

Devens, J.,
dissenting. I regret that I am unable to concur with the majority of the court in their decision of this case. The mortgage made by Ahern to Long was fraudulent, and intended by both parties to delay and defeat the creditors of Ahern. For reasons of public policy, both parties to such a transaction are left in the situation in which they have placed themselves, and it could not be avoided either in equity or at law by Ahern. It might, however, be avoided by creditors or subsequent bona fide purchasers, and this even if such purchasers had knowledge of the existence of the former conveyance. Ricker v. Ham, 14 Mass. 137. Clapp v. Leatherbee, 18 Pick. 131. If, therefore, the plaintiff had honestly, for a valuable consideration bought the mortgaged estate, or if he had actually advanced money upon the security furnished by it, and this was the whole transaction, the disability which affects Ahern would not affect him, and he would be sustained in asserting a title superior to that under the fraudulent mortgage. The incidental benefit which a fraudulent mortgagor has in *161being able to convey a good title, or at least the means of asserting one, while he does not himself possess one, is deemed properly to belong to him.
H. E. Fales, for the plaintiff.
L. H. Wakefield, for Phipps.
But, while the term bona fide, as used in the law on this subject, does not mean that the purchaser must be without knowledge of the former conveyance, it does mean that the purchaser shall be a real and not a feigned one, made for the purpose of investing a purchaser with a title. Any proceeding to set aside the fraudulent deed or mortgage must be in the interest and for the benefit of the purchaser, who is a stranger to the fraud, even if subsequently, and previously to the conveyance, he is informed of it. If the object of the transaction, mutually participated in by vendor and purchaser, is but to go through the form of a conveyance, and if the suit, when brought to establish the title obtained by such a purchase, is a suit in the interest and for the benefit of the original fraudulent grantor, the name of the subsequent purchaser being used for this purpose, even if money or other valuable consideration actually passed from him, the suit should not be maintained. To permit this would be to allow the fraudulent grantor, by a simple evasion, to extricate himself from the embarrassing position in which he had placed himself by his own knavery, and where the law intended to leave him. It would reduce a rule long established on grounds of public policy to one of the most purely formal character.
The case at bar, in my view, is the one above stated. It is found that Ahern, the fraudulent grantor, borrowed the sum of $600 “ from the plaintiff, for the purpose of enabling the plaintiff, but in the interest of Ahern and for his benefit, to bring the bill in this suit.” It is further found “ that the plaintiff knew of the purpose last aforesaid of Ahern, believed it was lawful, and lent him his money and took the note and mortgage in that belief, and for the purpose of bringing this suit for the benefit of Ahern.”
In a suit, whether at law or in equity, brought under such circumstances, the plaintiff should stand as the representative of Ahern, and be affected by a similar disability.
In this dissent Mr. Justice Field concurs.