Dawson Bank v. Harris

• Decision Date: 31 January 1881
• Citation: 84 N.C. 206
• Parties: THE DAWSON BANK v. GEORGE HARRIS and others.
• Court: North Carolina Supreme Court

84 N.C. 206

THE DAWSON BANK

v.GEORGE HARRIS and others.

Supreme Court of North Carolina.

January Term, 1881.

CIVIL ACTION tried at Spring Term, 1880, of NEW HANOVER Superior Court, before Avery, J.

The case was heard on complaint and demurrer. The demurrer was sustained, judgment, appeal by plaintiff.

Mr. E. S. Martin, for plaintiff .

Messrs. McRae & Strange, for defendants .

SMITH, C. J.

The plaintiff alleges that the defendant is indebted to him in the sum of seven thousand dollars, evidenced by two promissory notes under a contract for the loan of money entered into prior to February 3d, 1874, on which the interest has been paid up to April 28th, 1878; that on February 3d, 1874, May 4th, 1874, and July 27th, 1875, he made several deeds to the respective defendants, Marsden Bellamy, Henry P. West and John D. Bellamy, of separate lots of land owned by him in the city of Wilmington, with false recitals of money considerations, with an understanding and agreement with each, that they should reconvey to his wife, the defendant Julia, which has been carried into effect, and with an express intent thereby to defraud his creditors, and places his property beyond the reach of legal process.

That in furtherance of this purpose, after paying off several judgments recovered against him in New Hanover superior court, in the aggregate sum of twenty-six hundred dollars, he has caused the same to be assigned to his wife, more effectually to protect the several covinous conveyances and secure the property to her. That he owes debts exceeding fifty thousand dollars in amount, which all his estate of every kind, including that mentioned in the fraudulent deeds, is wholly insufficient to pay, and that he has become and is utterly insolvent.

The object of the action and the prayer of the complaint are that the plaintiff have judgment for his debt, that the several deeds be declared void, and the property therein mentioned, or so much as may be necessary, be sold for the satisfaction of the debt.

The defendants demur to the complaint, and assign as grounds thereof:

1. For that it is not averred that the defendant has not other property liable to execution and sufficient to pay the plaintiff's demand.

2. For that it appears upon the face of the complaint that the debt has not been reduced to judgment, so that execution could issue therefor.

3. For that there is a misjoinder of distinct and independent causes of action.

4. For that there is a misjoinder of parties and there is no community of interest among them, in the several impeached assignments.

These objections to the granting of the relief sought, under the present structure of the complaint, we proceed to consider:

I. The absence of an averment that the plaintiff cannot obtain satisfaction of his demand, from other property of the debtor:

The allegations of the complaint on this behalf are not very specific and pointed. But it charges the fraudulent alienations of the debtor, to screen his property from the claims of his creditors, and the plan by which it is intended and attempted to divest the title to a large number of town lots out of the defendant, and put it in his wife, under instruments in proper form to effect the object; the transfer to her of discharged judgments, apparently in force, for the accomplishment of the same dishonest purpose; the hopeless insolvency of the debtor, and the insufficiency of all his estate to meet his liabilities. These allegations, in substance, must be understood to mean that satisfaction of the plaintiff's debt can only be procured by pursuing the alienated land, and appropriating it thereto, and especially in the absence of any intimation that he has any other property accessible to legal process.

II. The failure to prosecute the claim to judgment, and sue out execution thereon:

When, under our former system, the law was administered by two separate and distinct tribunals, of which each had its own rules of practice, the court of equity would lend its aid to a creditor in enforcing a legal demand, when he had none or an inadequate remedy at law. Hence it became an established doctrine in that court, to refuse its assistance, unless the creditor had ascertained the amount of his debt by reducing it to judgment, and sued out execution, when the property of the debtor pursued, could be seized and sold thereunder, as in case of a fraudulent and ineffective assignment, in order that a lien might attach, although this was not required, when the estate and interest to be appropriated was purely equitable, or such as was not accessible to legal process, and in both cases it must be shown (and commonly this was done by the return of nulla bona to the execution) that the debtor had no property from which the debt could be satisfied by such legal process. Clark v. Banner, 1 Dev. & Bat. Eq., 608; Bethel v. Wilson, Ibid., 610. “A court of equity never interferes,” says RUFFIN, C. J., in Brown v. Long, 1 Ired. Eq., 190, “on behalf of a mere legal demand, unless the creditor has tried the legal remedies, and found them ineffectual.” In like manner, NASH, J., speaking...