He who has fraudulently dispossessed himself of a thing may be treated as if he still had possession.

Explanation

A person who fraudulently divests himself of possession of property may still be treated as if he retained it. This prevents a wrongdoer from evading an action for recovery by voluntarily parting with possession before suit is brought.

Where this applies

• A debtor transfers his house to a relative right before a creditor files suit, and the court treats him as if he still owns the house because the transfer was fraudulent.
• A man gives away all his assets to a shell company he controls just before a lawsuit, and the court pierces the transfer and treats him as still possessing those assets.
• A business owner sells her inventory to a friend at a suspiciously low price to hide it from a judgment creditor, and the law treats her as if she still has it.