Merchants Bank v. Page

⁶⁰⁸ Bond, O. J., delivered the opinion of the Oburt. This is a proceeding to set aside a mortgage as in fraud of the creditors of the mortgagor, under the Fraudulent Conveyance Aeifc. Acts 1920, eh. 395. All the citations of statutory provisions in this opinion refer to that act.

The quesr tion to he decided is whether a mortgage, given by a wife on all her assets., to repay money fraudulently obtained by her husband, thus forestalling criminal prosecution of the husband, may be avoided at the suit of .a creditor of the wife herself. Hnder .an order of the Circuit Court for Wicomico County, passed on December 14th, 1921, the bank commissioner of tike State became receiver of the Bank of White Haven of that county, and among the assets of the hank which came into his 'hands were found unpaid notes made by Hilton W. Robertson and -his brother, Raymond Robertson, both of Washington, District of Columbia, and indorsed by Louise B. Robertson, the wife of Hilton W. Robertson. In her answer in this proceeding the wife admits liability on the indorsements. The husband was .also indebted to the Merchants Bank of Washington for money fraudulently obtained by Mm from that hank, and steps had been taken looking, to criminal prosecution, when, on December 29th, 1921, the wife gave her note for $10,000 of the .indebtedness and, with her husband, executed a mortgage on real property owned by her .at White Haven to secure payment of it.

This was all the property which Mrs'. Robertson owned. On a bill in equity by the bank commissioner the court below passed a decree setting aside the mortgage as in fraud of the wife’s own creditors, .and the present appeal is taken from that decree. The evidence does not show an actual promise by the Merchants Bank toi stifle prosecution of Robertson in consideration of the wife’s note and mortgage; the notes representing the husband’s previous fraudulent transactions were merely cancelled and surrendered in exchange.

Whether this amounts to the Compounding of a crime, which furnishes in itself no legal consideration (Wildey v. Collier, 7 Md. 273 ; ⁶⁰⁹ Gotwalt v. Neal, 25 Md. 434 ; Ann.