Blair v. Brown

• Decision Date: 02 April 1895
• Citation: 21 S.E. 434,116 N.C. 631
• Parties: BLAIR et al. v. BROWN et al.
• Court: North Carolina Supreme Court

21 S.E. 434

116 N.C. 631

BLAIR et al. v. BROWN et al.

Supreme Court of North Carolina

April 2, 1895

Appeal from superior court, Moore county; Armfield, Judge.

Action by Harvey Blair & Co. and others against L. T. Brown and others. From a judgment for plaintiffs, both parties appeal. On plaintiffs' appeal, affirmed. On defendants' appeal, reversed.

It was error to charge that, if the jury should find that the deed was fraudulent as to one creditor, they should find it fraudulent and void as to all.

On the 26th of November, 1890, the defendant L. T. Brown, a merchant residing in Moore county, executed a paper writing purporting to be an assignment of his goods, wares, credits, etc., to the defendant S.D. Jones to secure the payment of a sum of $5,500 to the said S.D. Jones, and then all outstanding claims against the assignor, naming some of them. The debtor reserved to himself $500, as his personal property exemption and provided for the expenses of executing the trust before any of the debts should be paid. This action is instituted by the unpreferred creditors for the recovery of judgments against the defendant Brown for their debts against them, and also to have the deed declared fraudulent and void. It is charged that the assignment was executed in pursuance of a conspiracy between the assignor and the assignee to hinder délay, and defraud the plaintiffs, and that such was the intent of the assignor, and that the assignee knew of it and participated in it at the time of its execution. The defendant Brown died after the action commenced, and his administrator, J. E. Caviness, has been made a party defendant. The answer denies the material allegations of the complaint, except his indebtedness to the plaintiffs. The following are the issues submitted to the jury, and their responses thereto: "(1) Was the deed of assignment from Brown to Jones, assignee, executed with intent to hinder defeat, delay, or defraud the creditors of L. T. Brown? Ans. Yes. (2) Is the defendant J. E. Caviness, administrator of L T. Brown, indebted to the plaintiffs? If so, in what amount? Answer. Yes; as alleged in the admissions filed." The court thereupon rendered judgment "declaring the deed of assignment executed by L. T. Brown to S.D. Jones fraudulent and void as to the plaintiff creditors of L. T. Brown, and that said deed be set aside as to plaintiffs, and further adjudged that the plaintiffs recover of J. E. Caviness, administrator of L. T. Brown, the several amounts alleged in the complaint as due to the creditors therein named, aggregating the sum of $5,331.49 and interest, and further adjudged that the plaintiffs recover of the defendants the costs of the action, to be taxed by the clerk of the court. His honor further ordered and adjudged that, upon the admissions in the pleadings, that this cause be referred to Frank McNeill, referee, to ascertain and report to the next term of this court what property and effects of L. T. Brown, deceased, and the value thereof, came or should have come into the hands of S.D. Jones, trustee, by virtue of the said fraudulent deed of assignment, and said referee was further directed to report any other facts which he may deem essential to a full adjustment of the matters in controversy, and this cause was retained for further orders and directions. The plaintiffs excepted to his honor's refusal to render judgment against the said S.D. Jones, trustee, and the sureties on the said undertaking, and for the error alleged the plaintiffs appealed to the supreme court." From the judgment rendered upon the verdict against the defendants, both parties appealed to this court.

Douglass & Spence and Shaw & Scales, for plaintiffs.

Black & Adams, for defendants.

Defendants' Appeal.

MONTGOMERY J.

During the progress of the trial, the plaintiffs introduced evidence tending to show: That the deed of assignment from Brown to Jones was preferred and executed on the 21st day of November 1890, and withheld from record till the morning of the 27th of November, 1890, and that after the execution of said deed, and before the recording thereof, the assignor, Brown, executed and delivered to one J. M. Monger the following power of attorney: "This is to certify that John M. Monger is our agent to contract for us for the purchase of goods, collect all amounts due us, and generally to do and act for us in as full a manner as if we gave our consent to each individual act of his. L. T. Brown. November 21, 1890." That said Brown, at the time of the execution of the deed of assignment and said power of attorney, had on hand a large assortment of goods, the greater part of which he had purchased within the 30 days prior to the assignment, and that said J. M. Monger, immediately after the execution of the said power of attorney, went South, and in a section in which the said Brown had not heretofore purchased goods, and purchased goods for the said Brown, on credit, to the amount of $6,000, and that said Jones, assignee, knew of these transactions. There was also evidence introduced by plaintiffs tending to show that one Terrell, agent for R. G. Dun's Mercantile Agency, called on Jones, assignee, who was doing business in Sanford, N. C., and in the same town in which the said Brown was doing business, between the 21st and 27th of November, 1890, and informed him (Jones) of his agency, and that he was seeking information of the standing, etc., of the business men of Sanford, for his firm, and that said Jones informed him that the said Brown was, in his opinion, worth about $5,000; that he (Brown) was doing a very good, straightforward business; and that his store was one of the largest in the town. Plaintiffs also introduced evidence tending to show that one J. S. Harper, traveling salesman of Harvey Blair & Co., one of the plaintiffs, during the month of October, 1890, called on the defendant Jones for information as to the financial standing of the said Brown, and in response thereto Jones informed said Harper that Brown was worth about $5,000, and that at said time, and at the time of the information given by Jones to Terrell as aforesaid, said Jones held unrecorded mortgages on all the real and personal property of said Brown to secure an alleged indebtedness of $5,500. The defendant Jones testified upon cross-examination by the plaintiffs that a short time prior to November, 1890, he (Jones) had disposed of all of his property with intent to defraud one of his creditors. There was also evidence tending to show that the true indebtedness from Brown to Jones was not $5,500, the amount preferred in the said deed of assignment, but was a sum much less than that amount. There was also evidence tending to show that a short time before the execution of the deed of assignment, and while the said Jones held the unrecorded mortgages on all the real and personal property of the said Brown, said Brown represented to Sweetzer, Pembroke & Co., of New York, that he was worth from $5,000 to $7,000 over and above all exemptions and liabilities, and that he purchased goods on a credit upon the faith of these representations. There was also evidence tending to show that though the assignee, Jones, was authorized in said deed of assignment to pay Brown, assignor, $500 in money in lieu of his personal property exemptions, upon an execution issued against said Brown after the execution of the deed of assignment, said Brown demanded, selected, and had allotted to him his personal property exemptions in property, to a large extent, not conveyed in the deed of assignment. The plaintiffs then insisted that there was before the court sufficient evidence of a combination and conspiracy between the assignor and assignee to defraud the creditors of the assignor to admit the declarations of the assignor made subsequent to the deed of assignment. His honor was of that opinion, and so ruled. Upon this the plaintiffs introduced as a witness for themselves J. M. Brown, who testified as follows: "I am a brother of L. T. Brown. I had a talk with him at my house after the assignment,--the next spring after it was made. He said the assignment was all a damned fraud, and that he would not come to court, because it would ruin him and injure Mr. Jones. He told me this a dozen times." To all of which the defendants excepted. The plaintiffs then introduced as a witness one N. B. McBride, by whom they proposed to prove a conversation that he had with the assignor after the execution of the deed of assignment. The defendants objected. Objection overruled. Defendants excepted. This witness was then permitted to testify as follows, to wit: "I had a conversation with Brown, assignor, after the assignment. It was at Greensborough, in April, 1892. He said he wanted to go home to see Jones, and if Jones would give him his house and lot back he would let things go on as they were, and if they did not he would go on the stand and burst it up, for it was a fraud from beginning to end; that he was due Jones $2,000; and that he made the assignment to pay that debt. He said to Mr. Douglass that if Jones did not come to terms he was going to employ some one to burst it up. Mr. Douglass told him to stop, when he began to talk, for he was employed on the other side." To this the defendants excepted. The plaintiffs then introduced as a witness one M. B. Buchanan, by whom they proposed to prove similar declarations of Brown, the assignor, after the assignment. The defendants objected. Objection overruled. Defendants excepted. The witness was then permitted to testify as follows, to wit: "I heard a talk between Brown and McDonald. Brown said he owed Jones some money, but not so much as he claimed, and, if he did not give him back his house and some money, he would go on the stand and break the...