ARNOLD ALFORD vs. J. R. SOUSA & SONS, INC.

This action was brought by the plaintiff to remove a cloud on title to land located at 31-31A Bridge Street, Salem, Essex County, Massachusetts ("locus"). The defendant has filed a counterclaim asking for a declaration that it is the owner of locus by virtue of a sheriff's sale in 1975.

A trial was held on November 2, 1987 at which five witnesses testified and twenty-six exhibits were introduced into evidence. These exhibits are incorporated herein for the purpose of any appeal.

I find the following:

1. On July 22, 1960, the plaintiff incorporated and became the sole stockholder of Prime Gasoline and Oil Co., Inc. ("Prime"), a corporation duly organized under the laws of the Commonwealth of Massachusetts (Exhibit 1). He was not, however, the president of the corporation.

2. On or about November 18, 1968, the plaintiff entered into an agreement to purchase locus subject to his being able to obtain the permits necessary to build and operate a gas station and subject to financing. A $5,000 deposit was given to the seller (Exhibit 2).

3. On or about January 16, 1970, Harry A. Simon, executor of the estate of Joseph F. St. Pierre, conveyed locus to Max Engle for $55,000 by deed recorded at the Essex South Registry of Deeds in Book 5662, Page 401 (Exhibit 3). [Note 1]

4. A statement of sale was produced at the closing showing a balance due of $44,862.25 after deducting the $5,000 deposit and making other adjustments (Exhibit 5).

5. All the money used to purchase the locus was paid to the seller by the plaintiff in his individual capacity.

6. From a time beginning in 1970 to approximately December 1, 1973, Prime operated a retail gasoline service station on the locus.

7. In November of 1973, Prime received deliveries of gasoline from the defendant for which Prime incurred a debit in the amount of $28,551.87 (Exhibit 6).

8. As a result of Prime's continuing arrearages, on or about March 4, 1974, the defendant filed suit against Prime in Essex Superior Court, Civil Action No. 156961. On March 13, 1974, the defendant's motion to attach all of Prime's right, title or interest in locus was all owed in the amount of $28,551.87 (Exhibit 7).

9. On March 14, 1974, the special attachment granted to Prime was recorded at Book 6050, Page 645.

10. By deed dated March 14, 1974 and recorded at Book 6050, Page 658, the locus was conveyed from Max Engle to the plaintiff (Exhibit 9).

11. On March 25, 1975, judgment entered in favor of Sousa in Civil Action No. 156961 in the amount of $28,551.87 with interest from March 4, 1974.

12. On April 24, 1975, all right, title and interest in locus was levied on execution by Deputy Sheriff Charles H. Reardon, said execution being recorded at Book 6141, Page 672 (Exhibit 10).

13. On August 14, 1975, a sheriff's sale was held whereupon "all right, title and interest which the said Prime Gas & Oil Co., Inc. (standing in the name of Max Engle)" had in the locus was sold at public auction to the defendant. The sheriff's deed was recorded on September 12, 1975 at Book 6179, Page 757 (Exhibit 11).

14. On October 19, 1983, Prime was dissolved by the Secretary of State's Office under the provisions of G.L. c. 156B, §101 and is no longer a legal entity (Exhibit 18).

15. For the years 1974 to 1977, the plaintiff personally filed a Certificate of Registration with the Department of Public Safety - Division of Fire Prevention for the Commonwealth of Massachusetts setting fort that he was the holder of a license for the lawful use of buildings or structures situated on locus as relating to the keeping, storage manufacture or sale of inflammables or explosives (Exhibits 12-15).

16. On November 6, 1975, the plaintiff in his individual capacity leased the locus to Sure Petroleum Products, Inc. ("Sure") for a period of twenty years with an option to purchase (Exhibit 16). A notice of this lease was recorded on February 6, 1976 at Book 6215, Page 780.

At issue herein is the validity of the execution pursuant to G.L. c. 236, §§1 and 47. It is undisputed that at the time of the attachment, Engle had title to the locus. The defendant asserts that Engle held title as a nominee for Prime and that the conveyance on March 14, 1974 by Engle to Alford, made at the time when Prime was insolvent, was a fraudulent conveyance pursuant to G.L. c. 109A , §4. The plaintiff asserts that Max Engle held title as nominee for the plaintiff and that all purchase monies came from the plaintiff.

Assuming for purposes of discussion that the evidence warrants a finding that Max Engle held as nominee for Prime and the March 14, 1974 conveyance was fraudulent, the issue of the defendant's recovery of possession still remains.

G.L. c. 236, §47 states:

If an execution is levied on land or rights the record title to which fraudulently stands in the name of a person other than the debtor and such other person is in possession claiming title thereto, the levy shall be void unless the . . . purchaser at the sale . . . commences his action to recover possession thereof within one year after the recording of the execution and return in the registry of deeds. . . .

The defendant admits that no action was taken to recover possession or was made within the year after the date of the recording of the deed of the sheriff's sale of the property to the defendant. However, the defendant argues that the plaintiff was not in possession claiming title thereto, that the phrasing in §47 requires actual possession and that, as the plaintiff was not in actual possession, section 47 of c. 236 is inapplicable and the defendant's title remains valid.

The word possession is not synonymous with "actual possession." Possession is defined by Black's Law Dictionary, p. 1047, (rev. 5th ed. 1979) as "that condition of facts under which one can exercise his power over a corporeal thing at his, pleasure to the exclusion of all other persons," while "actual possession" is defined as "the immediate occupancy and control of the party."

The evidence demonstrates indicia of ownership by the plaintiff in that after the conveyance from Engle to the plaintiff, the plaintiff or his lessees have paid all property taxes on locus, the plaintiff rented locus to Sure with an option to purchase, the plaintiff recorded the lease to Sure at the registry and the plaintiff, as owner, registered licenses with the Commonwealth of Massachusetts as to the buildings and structures on locus. Accordingly, I find and rule that the plaintiff was in possession within the meaning of G.L. c. 236, §47 by virtue of the above mentioned acts and that the defendant is bound by §47 and its claim of ownership under the 1975 sheriff's sale is denied.

I also find and rule that. Engle was a nominee for the plaintiff, not for Prime, and further that the placement of the title in Engle was not done to defraud Sousa. The locus was conveyed to Engle on January 16, 1970. The debt in curred by Prime to the defendant upon which the attached is founded occurred in November of 1973. There is evidence that Engle was made nominee for the plaintiff to obtain multiple licenses for gasoline stations and for other business practices, certainly not a unique sitation in the business world.

The defendant has failed to present evidence sufficient for the finding that the plaintiff and Prime are a single entity or that the conveyance from Engle to the plaintiff was made with the "actual intent . . . to hinder, delay or defraud . . ." as required by G.L. c. 109A, §7. There is moreover no evidence that the defendant relied upon any ownership interest of Prime in locus in extending credit to Prime.

Thereupon, I find and rule that the title to locus at 31-31A Bridge Street stands in the name of the plaintiff, and the sheriff's deed to the defendant is void. The defendant's counterclaim asking for a declaration as to ownership and an accounting and disgorgement of rents collected by the plaintiff is herein denied.

The plaintiff and the defendant have made requests for numerous findings of fact and rulings of law. I have not attempted to rule in each of said requests as I have made my own findings on the facts which I deem material and on the law which I believe is applicable.

Judgment accordingly.