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Reen v. Berton, 115 N.H. 424, 342 A.2d 650

Facts

Robert Berton was married to Phyllis Berton while simultaneously engaging in a relationship with Jane Reen, whom he later married under false pretenses. After the marriage, Jane discovered that Robert had never divorced Phyllis, leading to a lawsuit against him for fraud. Following a judgment against Robert, Jane sought to set aside a conveyance of property he made to Phyllis, claiming it was fraudulent and left her without recourse for her judgment.

Plaintiff's claim arises from a relationship between the parties in which Robert Berton married Jane Reen while he was still Phyllis Berton's husband. Robert Berton first met Jane Reen in Chelmsford, Massachusetts, in October 1966. About one month after they met, Robert told her that he was married, but represented to her that he had not lived with his wife for five to six years.

Issue

Whether the equitable doctrine denying relief to those who do not have ‘clean hands' bars the plaintiff, a judgment creditor, from setting aside a conveyance of real estate found to be fraudulent.

The question to be decided by this appeal is whether the equitable doctrine denying relief to those who do not have ‘clean hands' bars the plaintiff, a judgment creditor of Robert E. Berton, from setting aside a conveyance of real estate which the trial court found to be fraudulent under the terms of RSA 545:4 (Uniform Fraudulent Conveyances Act: Conveyance, by Insolvent).

Rule

The Uniform Fraudulent Conveyance Act states that a conveyance made by a person rendered insolvent is fraudulent as to creditors if made without fair consideration, regardless of the person's actual intent.

RSA 545:4 states, however, that ‘(e)very conveyance made . . . by a person who is or will be thereby rendered insolvent is fraudulent as to creditors, without regard to his actual intent . . .’ if made without fair consideration.

Analysis

The court applied the rule by determining that although the conveyance was fraudulent under the Uniform Fraudulent Conveyance Act, setting it aside would be inequitable due to the plaintiff's own involvement in the bigamous marriage. The court found that both the plaintiff and the debtor's first wife were innocent victims of Robert's deceit, and thus the plaintiff's unclean hands precluded her from obtaining relief.

The court applied the rule by determining that although the conveyance was fraudulent under the Uniform Fraudulent Conveyance Act, setting it aside would be inequitable due to the plaintiff's own involvement in the bigamous marriage.

Conclusion

The court upheld the trial court's decision to dismiss the creditor's petition to set aside the conveyance, concluding that the exceptions were overruled.

Exceptions overruled.

Who won?

Phyllis Berton prevailed in the case because the court found that the conveyance was made to provide for her and their children, and the plaintiff's own misconduct barred her from relief.

Phyllis Berton prevailed in the case because the court found that the conveyance was made to provide for her and their children, and the plaintiff's own misconduct barred her from relief.

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