NORTHBOROUGH NATIONAL BANK v. Risley

A debtor conveys property to his wife, and she conveys it to her sister’s husband, all with an intent to put the property beyond the reach of a creditor. Before the creditor’s claim is reduced to judgment, with knowledge of the fraudulent intent, the transferee participates in a sale of the property to a good faith purchaser for fair consideration, and pays over the net proceeds to the debtor. Taking into account the extent of the transferee’s participation as in Modin v. Hanron, 346 Mass. 629, 631-632 (1964), we hold that the transferee is not personally liable to the creditor.

A judge of the…