H. N. WIMMERS, AS RECEIVER OF B. L. E. REALTY CORPORATION, ET AL.,
v.
MARY M. BLACKBURN, JOINED BY HER HUSBAND, AND NEXT FRIEND, A. E. BLACKBURN

Fla. | 1942-07-28
BROWN, C. J., WHITFIELD, and BUFORD, JJ„ concur.
151 Fla. 236 Florida Supreme Court (1942) Positive Treatment
Also reported at: 9 So. 2d 505
Cited by 2 cases

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Synopsis

A receiver of B.L.E. Realty Corporation brought a creditor's bill against Mary M. Blackburn to recover property allegedly transferred fraudulently by the Brotherhood of Locomotive Engineers to hinder creditors. The Florida Supreme Court affirmed the lower court's decree, holding that a creditor can pursue a fraudulent conveyance claim even if the judgment was acquired after the alleged fraudulent transfers occurred.


Holding

A creditor can pursue a fraudulent conveyance claim even if the judgment was acquired subsequent to the alleged fraudulent transfers, because the fraud condemned in equity is the debtor's design to prevent creditors from satisfying debts, not malice toward particular judgment holders. Additionally, the receiver adequately proved the trust relationship between itself and the original creditors to maintain the suit.


Key Quotes

“the fraud condemned in equity is the design of a debtor to prevent his creditor from satisfying his debt”

Establishes the legal standard for fraudulent conveyance in equity, focusing on the debtor's intent rather than malice toward particular judgment holders

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Facts & Procedural History

The Brotherhood of Locomotive Engineers, an unincorporated association, undertook to purchase and develop land in Venice, Florida in 1925, forming B.L…

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Opinion of the Court
ADAMS, J..:

ADAMS, J..:

This is an appeal from final decree in favor of plaintiff based on a creditor’s bill.

*237This whole controversy involves an undertaking by the Brotherhood of Locomotive Engineers, an unincorporated association, to purchase a large tract of land and develop the town of Venice, back in 1925. To carry out this undertaking a corporation was formed by the name of B. L. E. Realty Corporation. Purchases were'made by the corporation and obligations incurred. When the boom collapsed, judgments were recovered against the corporation on the aforesaid obligations. In the meantime the corporation had divested itself of its assets. The theory of plaintiff is that the Brotherhood of Locomotive Engineer has, at all times, been the real owner of the property in controversy; that the Brotherhood of Locomotive Engineers has manipulated numerous transfers of property into and out of corporations organized only, to serve the purpose of hindering and defrauding creditors of the B. L. E. Realty Corporation.

It is urged by defendant that plaintiff acquired the judgment relied upon by her, subsequent to the alleged fraudulent transfers and for that reason she cannot complain. Cited in support of its contention is Bay View Estates Corporation v. Southerland, 114 Fla. 635, 154 So. 894. We cannot put the desired construction on the opinion in Bay View Estates case. The opinion is based on a citation in 20 Cyc. 345 and 2 Kent’s Com. 440, which holds that to constitute a fraudulent conveyance there must be a creditor to be defrauded, a debtor intending fraud and a conveyance of property subject by law to the debt. Intent to defraud in contemplation of law does not mean merely malice or ill will toward the person who happens to own the judgment or obligation. The fraud con*238demned in equity is the design of a debtor to prevent his creditor from satisfying his debt. It frequently happens that the owner of a debt changes, either voluntarily or involuntarily, by operation of law. See 24 Am. Jur. Fraudulent Conveyances, Sec. 141, et seq., and Yeena v. Weeks, 104 Ala. 331, 16 So. 165.

It may be observed here however that the original creditors have retained a real and beneficial interest in the judgments, which brings us to defendant’s next claim that plaintiff is suing as trustee and her proof of the trust relationship is not clear and unequivocal as enunciated by this Court in Hill v. Beacham, et al., 79 Fla. 430, 85 So. 147; Williams as Admx. v. McAdow, 103 Fla. 644, 137 So. 891. While a strong showing is- required, to prove an oral trust, yet the application of the rule does not require as great amount of prdof where the. trustee is not seeking an adverse-decree to the cestui que trust.

We have examined the other questions and find no merit in them. The case was tried according to law and we find the decree sustained by adequate testimony.

The decree is. affirmed.

BROWN, C. J., WHITFIELD, and BUFORD, JJ„ concur.


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Citator

Cited By

  • Blackburn v. Venice Inlet Co., 38 So. 2d 43 (Fla. 1948)
    …ly 24, 1931, assigned to Miakka Estates, Inc., and by Miakka Estates, Inc., sold to Herman Myers for the sum of $5000.00 on January 19, 1935, was and is fraudulent and void. This contention is bottomed squarely on our ruling in Wimmers v. Blackburn, 151 Fla. 236, 9 So. 2d 505. This suit was instituted in Sarasota County, Florida, during the year 1936, and decided on appeal here on July 28, 1942. It is conceded that Herman Myers and Venice Inlet Company were not parties to the suit and were admittedly in pos…

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