Gardner v. Kirven, No. 14486.

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtSTABLER, Chief Justice
Citation191 S.E. 814
PartiesGARDNER. v. KIRVEN et al. (two cases).
Docket NumberNo. 14486.
Decision Date18 May 1937

191 S.E. 814

GARDNER.
v.
KIRVEN et al. (two cases).

No. 14486.

Supreme Court of South Carolina.

May 18, 1937.


[191 S.E. 815]

BAKER and FISHBURNE, JJ., dissenting in part.

Appeal from Common Pleas Circuit Court of Darlington County; G. Dewey Oxner, Judge.

Suits by C. E. Gardner, as receiver of John K. Kirven, against John K. Kirven and Emmie B. Kirven, and against John K. Kirven and Anna B. Kirven. From an adverse decree, defendants appeal.

Affirmed.

The order of Judge Oxner, requested to be reported, follows:

On the 10th of October, 1930,. Idella Blackmon, through her guardian ad litem, instituted an action in the court of common pleas for Darlington county against John K. Kirven for damages growing out of an unlawful assault committed September 29, 1930. Issue was joined and a verdict for $5,000 returned on November 3, 1932. The judgment which was entered on this verdict was affirmed by the Supreme Court on July 7, 1933. 170 S.C. 190, 170 S.E. 157.

Execution was issued, on which the sheriff made a nulla bona return, whereupon an order for supplemental examination was made on July 29, 1933, by this court. Testimony was taken in supplemental proceedings during the summer and fall of 1933.

At the same time a motion was made before Hon. Hayne F. Rice on the 13th of September, 1933, for execution against the person and for an order holding John K. Kirven to arrest and bail in payment of the judgment. Such an order was granted by Judge Rice on the 12th of December, 1933, and on appeal this order was affirmed September 8, 1934. 173 S.C. 322, 175 S.E. 814. John K. Kirven, however, prior to the rendition of Judge Rice's decision, left the state, and since that time has remained in Georgia and Florida. Collection of the judgment has therefore not been effected by means of this proceeding.

In the first above entitled action C. E. Gardner was on September 1, 1933, appointed receiver for John K. Kirven. Thereafter, on November 17, 1933, he instituted the second and third above entitled actions for the purpose of setting aside certain transfers and conveyances to Emmie B. Kirven and Anna B. Kirven, respectively, as fraudulent and preferential. These complaints were amended, demurrers were filed thereto, and the demurrers were overruled on March 8, 1934, which orders were affirmed on appeal August 3, 1934. 173 S.C. 302, 175 S.E. 637.

During these proceedings a motion was made by C. E. Gardner, as receiver, in the District Court of the United States for the Eastern District of South Carolina, in the case of Dixon v. Gage (Krupnick v. Peoples State Bank), 18 F.Supp. 895, asking that the receivers of the Peoples State Bank, who had possession of the Fred Law bond and mortgage hereinafter referred to, deliver the same over to him. Issue was joined upon this motion, and on May 28,. 1934, the Honorable J. Lyles Glenn, Judge Presiding, directed that the Fred Law bond and mortgage be turned over to C. E. Gardner, receiver, without prejudice to any rights therein held by Miss Emmie B. Kirven. Under the order of the court of common pleas for Darlington county issues regarding the title to this bond and mortgage were heard along with the two actions to set aside the transfers referred to hereinabove.

These matters were marked heard by me while presiding in the Fourth Circuit and arguments were made before me at that time. Counsel desired time after the oral arguments for filing written memoranda, and the delay in rendering this opinion is due to the fact that when the written arguments were received this court was busily engaged in holding courts in other circuits.

The issues presented by the pleadings in these cases are as follows:

(1.) Are the transfers from John K. Kirven to his wife, Anna B. Kirven, and to his daughter, Emmie B. Kirven, void as a violation of the Statute of Elizabeth, section 8696?

[191 S.E. 816]

(2.) Are the transfers by John K. Kir-ven to his wife, Anna B. Kirven, and to his daughter, Emmie B. Kirven, void under the Assignment Act (Code 1932, § 9106)?

(3.) What are the rights of the respective parties in the Fred Law bond and mortgage now in the hands of C. E. Gardner, receiver for John K. Kirven?

In disposing of these issues it is well to bear in mind certain well-established and fundamental principles of law applicable to the facts in these cases.

Under the provisions of the Statute of Elizabeth (section 8696), every conveyance made "for any intent or purpose to delay, hinder, or defraud creditors and others of their just and lawful actions, suits, debts, * * * shall be deemed and taken * * * to be clearly and utterly void, frustrate, and of none effect."

Our courts, in interpreting this statute, have held that conveyances shall be set aside under two conditions: First, where the transfer is made by the grantor with the actual intent of defrauding his creditors where that intent is imputable to the grantee, even though there is a valuable consideration; and, second, where a transfer is made without actual intent to defraud the grantor's creditors, but without consideration. Farmers' Bank v. Brad-ham, 129 S.C. 270, 123 S.E. 835; McInnis v. McRae, 134 S.C. 162, 132 S.E. 473.

Where transfers to members of the family are attacked either upon the ground of actual fraud or on account of their voluntary character, the law imposes the burden on the transferee to establish both a valuable consideration and the bona fides of the transaction by clear and convincing testimony. Epworth Orphanage v. Strange, 148 S.C. 500, 503, 504, 146 S.E. 414 (1), and cases cited; Virginia-Carolina Chemical Co. v. Hunter, 94 S.C. 65, 68, 69, 77 S.E. 751; Strickland v. Jones, 131 Ga. 409, 62 S.E. 322, 323, 324; Tucker v. Weathersbee, 98 S.C. 402, 406, 82 S.E. 638; Gray v. Collins, 139 Ga. 776, 78 S.E. 127, 128, 129; Younger v. Massey, 39 S.C. 115, 17 S.E. 711; Barrett & Co. v. Still, 102 S.C. 19, 29, 86 S.E. 204; Bank v. Dow-ling, 52 S.C. 345, 366, 29 S.E. 788; South Carolina Cotton Growers' Co-op. Ass'n v. English, 135 S.C. 19, 133 S.E. 542; Epworth Orphanage v. Strange, 158 S.C. 379, 155 S.E. 594; Bailey v. Blackmon, 3 F. (2d) 252, 253 (C.C.A.S.C.).

One is presumed to intend the natural consequences of his act. Rice v. City of Columbia, 143 S.C. 516, 543, 141 S.E. 705 (3).

In the Rice Case the court uses this language, 143 S.C. 516, at page 543, 141 S.E. 705, 713:

"They solemnly assert their innocence of any intention to hinder, delay, or defraud the other creditors, as if their innocence can shield them from the presumption that they intended the natural consequences of their acts. The equity of the creditors generally to an equal distribution of the assets of the insolvent bank cannot be annihilated by such a quibble. It makes not a particle of difference that they intended simply to secure their deposits; the effect of their acts is all that needs to be considered. If they proved to be the means of thwarting that equity which so appeals to the judicial conscience, they will be utterly destroyed.

"To sustain these transfers under the circumstances which appear beyond controversy would open wide the door for the most brazen acts of preference conceivable. All that the transferee would have to prove would be that he did not intend to hinder, delay, or defraud the other creditors; a position which he would have no right to assume in view of the legal 'presumption that he intended the natural consequences of his acts."

Where a conveyance is made without an actual intent to defraud but without consideration, it is said that the conveyance will stand if the grantor reserves a sufficient amount of property to pay his creditors. Penning v. Reid et al., 167 S.C. 263, 283, 284, 166 S.E. 139, 146.

But this means a sufficient amount of property not merely at the time of the transfer, but an amount from which in the final analysis the creditors are able to collect their indebtedness in full. The court in the Reid Case said:

"No rule is more clearly imbedded in the law of this state, than that a debtor must be just before he is generous. 'The law will not permit one who is indebted at the time to give his property away, provided such gift proves prejudicial to the interest of existing creditors. The motive which prompts the donor to make the gift is wholly immaterial. If the donor is indebted at the time, and the event proves

[191 S.E. 817]

that it is necessary to resort to the property attempted to be conveyed away by a voluntary deed for the purpose of paying such indebtedness, the voluntary conveyance will be set aside, and the property subjected to the payment of such indebtedness upon the ground that it would otherwise operate as a legal fraud upon the rights of creditors, even though it might be perfectly clear that the transaction was free from any trace of moral fraud.' Jackson v. Lewis, 34 S.C. 1, 12 S.E. 560, 562; Miller v. Erwin, 129 S.C. 415, 125 S.E. 36; Temple v. Montgomery, 157 S.C. 85, 153 S.E. 640, 641, 647; Izard v. Middleton, Bailey Eq. [228] 236; Jenkins v. Clement, Harp.Eq. [72] 85, 14 Am.Dec. 698; Greene v. Mobley, 112 S.C. 275, 99 S.E. 814; Magovern v. Richard, 27 S.C. [272] 286, 3 S.E. 340; Rice v. City of Columbia, 143 S.C. 516, 141 S.E. 705. * * *

"If in the final event the property of the debtor is not sufficient to pay his debts existing at the time of his voluntary conveyance, then such conveyance is null and void as to such debts."

With these principles of law in mind we approach a discussion of the facts in the case. The transfers which are questioned in the second and third actions were made on November 1, 1930, on the same date that John K. Kirven filed his answer to the assault action brought by Idella Blackmon. The transfers were promptly recorded (Deed Book 176, p. 226; Deed Book 176, page 227). These two instruments to Mr. Kirven's wife and daughter transferred all of his property, real and personal, with the exception of a real estate bond and mortgage which had previously been given by Fred W. Law to A....

To continue reading

Request your trial
36 practice notes
  • Campbell v. Hanckel (In re Re), Case No. 12–04936–dd
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • January 1, 2014
    ...fides of the transaction by clear and convincing testimony.” Windsor Prop., 498 S.E.2d at 860 (quoting Gardner v. Kirven, 184 S.C. 37, 191 S.E. 814, 816 (1937)); see also Hovis v. Ducate (In re Ducate), 355 B.R. 536, 544 (Bankr.D.S.C.2006); Campbell v. Haddock (In re Haddock), 246 B.R. 810,......
  • In re JR Deans Co., Inc., Bankruptcy No. 97-08095-W. Adversary No. 99-80231-W.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • March 21, 2000
    ...(Ct.App.1993)); see also Future Group, II v. Nationsbank, 324 S.C. 89, 478 S.E.2d 45, 48-49 (1996) (citing Gardner v. Kirven, 184 S.C. 37, 191 S.E. 814 (S.C. 1937)); Coleman v. Daniel, 261 S.C. 198, 199 S.E.2d 74, 79 (1973); In re Haddock, page Under the constructive theory, where a transfe......
  • PCS Nitrogen, Inc. v. Ross Dev. Corp., Case No. 2:09–cv–03171–MBS.
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • August 21, 2015
    ...both a valuable consideration and the bona fides of the transaction by clear and convincing testimony." Gardner v. Kirven, 184 S.C. 37, 191 S.E. 814, 816 (1937) ; see also In re J.R. Deans Co., Inc., 249 B.R. 121, 134 (Bankr.D.S.C.2000) (quoting First Union Nat'l Bank of N. Carolina, 314 S.......
  • Oskin v. Johnson, No. 27187.
    • United States
    • United States State Supreme Court of South Carolina
    • November 7, 2012
    ...Inc. v. Dolphin Head Constr. Co., 331 S.C. 466, 471, 498 S.E.2d 858, 860 (1998) (citations omitted); Gardner v. Kirven, 184 S.C. 37, 41, 191 S.E. 814, 816 (1937) (“The law imposes the burden on the transferee to establish both a valuable consideration and the bona fides of the transaction b......
  • Request a trial to view additional results
36 cases
  • Campbell v. Hanckel (In re Re), Case No. 12–04936–dd
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • January 1, 2014
    ...fides of the transaction by clear and convincing testimony.” Windsor Prop., 498 S.E.2d at 860 (quoting Gardner v. Kirven, 184 S.C. 37, 191 S.E. 814, 816 (1937)); see also Hovis v. Ducate (In re Ducate), 355 B.R. 536, 544 (Bankr.D.S.C.2006); Campbell v. Haddock (In re Haddock), 246 B.R. 810,......
  • In re JR Deans Co., Inc., Bankruptcy No. 97-08095-W. Adversary No. 99-80231-W.
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • March 21, 2000
    ...(Ct.App.1993)); see also Future Group, II v. Nationsbank, 324 S.C. 89, 478 S.E.2d 45, 48-49 (1996) (citing Gardner v. Kirven, 184 S.C. 37, 191 S.E. 814 (S.C. 1937)); Coleman v. Daniel, 261 S.C. 198, 199 S.E.2d 74, 79 (1973); In re Haddock, page Under the constructive theory, where a transfe......
  • PCS Nitrogen, Inc. v. Ross Dev. Corp., Case No. 2:09–cv–03171–MBS.
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • August 21, 2015
    ...both a valuable consideration and the bona fides of the transaction by clear and convincing testimony." Gardner v. Kirven, 184 S.C. 37, 191 S.E. 814, 816 (1937) ; see also In re J.R. Deans Co., Inc., 249 B.R. 121, 134 (Bankr.D.S.C.2000) (quoting First Union Nat'l Bank of N. Carolina, 314 S.......
  • Oskin v. Johnson, No. 27187.
    • United States
    • United States State Supreme Court of South Carolina
    • November 7, 2012
    ...Inc. v. Dolphin Head Constr. Co., 331 S.C. 466, 471, 498 S.E.2d 858, 860 (1998) (citations omitted); Gardner v. Kirven, 184 S.C. 37, 41, 191 S.E. 814, 816 (1937) (“The law imposes the burden on the transferee to establish both a valuable consideration and the bona fides of the transaction b......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT