Garland v. Arrowood

• Decision Date: 29 April 1919
• Docket Number: 442.
• Citation: 99 S.E. 100,177 N.C. 371
• Parties: GARLAND v. ARROWOOD.
• Court: North Carolina Supreme Court

99 S.E. 100

177 N.C. 371

GARLAND v. ARROWOOD.

No. 442.

Supreme Court of North Carolina

April 29, 1919

Appeal from Superior Court, Gaston County; Harding, Judge.

Action by P. W. Garland against Luther C. Arrowood. Judgment for plaintiff, and defendant appeals. Error, and new trial as to one issue.

In suit by trustee in bankruptcy to subject land formerly owned by bankrupt's father to payment of amounts invested by bankrupt in improvements thereon for the purpose of defrauding creditors, allegation in defendant's answer that "he owed little or nothing more than he has property to pay" was not a judicial admission that he was insolvent at time improvements were made, within Revisal 1905, § 962, as to fraudulent conveyances.

The action was brought by plaintiff as trustee in bankruptcy of Luther C. Arrowood to subject certain land to the charge of money alleged to have been wrongfully invested by the bankrupt in building a barn and dwelling house and in making other improvements thereon with the consent of the owner William C. Arrowood, in fraud of the creditors of the bankrupt. The case was before this court at fall term, 1916 (172 N.C. 591, 90 S.E. 766), upon the plea of the statute of limitations, and again at fall term, 1917 (174 N.C. 657, 94 S.E. 401), upon the competency of evidence, which was admitted by the court at the trial in April, 1917, to the effect that defendant, the donor of the money, had acquired lands of considerable value in 1917, eleven years after the transaction in 1906. This was admitted to show his solvency in the latter year. A new trial was awarded by this court in each of the said appeals for error in the rulings of the lower court upon the questions above stated. The case was again tried at the last September term of Gaston superior court, when the verdict was in favor of the plaintiff, as it had been in former trials.

With this brief preliminary statement and explanation of the facts, the full nature of the case will appear from the issues and verdict, which are as follows:

"(1) Did the defendant, Luther C. Arrowood, invest his individual funds in improvements on the lands of William Arrowood, known as the 'Home Place,' as alleged in the complaint? Answer: Yes (by consent).

"(2) Was the said Luther C. Arrowood insolvent at the time of making said improvements? Answer: No.

"(3) What amount of such individual funds did he so invest? Answer: Fourteen hundred dollars.

"(5) Was the defendant, Luther C. Arrowood, at the time of making said investments on the land of William Arrowood, indebted to William Arrowood in an amount equal to the value of such investments? Answer: No.

"(6) If such investment was made by the defendant, Luther O. Arrowood, out of his individual funds on said lands of William Arrowood, was it done with the intent to hinder, delay, and defraud the existing creditors of the defendant? Answer: No.

"(7) Are there any debts owing by the defendant which existed at the time said investments, if any, were made by him upon the lands of William Arrowood, now enforceable against him at the date of this trial? Answer: Yes.

"(8) If the defendant made any improvements out of his individual funds on the lands of William Arrowood, did he do so with the intent to hinder, delay, or defraud any of his creditors in the collection of debts contracted subsequent to the date of such investments? Answer: No.

"(9) Did the defendant procure the said William Arrowood to change the devise of the home place to the defendant's wife for life? Answer: No.

"(10) If so, was this done with the intent to hinder or delay the creditors of Luther C. Arrowood? Answer: No.

"(11) Was the tract of land described in the deed from Chalmers Arrowood to Luther C. Arrowood introduced by the defendant as 'Exhibit 7' the same tract of land devised to Chalmers Arrowood in the former will of William Arrowood? Answer: Yes (by consent).

"(12) Was this tract of land a part of the home place mentioned in the last will of William Arrowood and therein devised to Luther C. Arrowood subject to the life estate of his wife? Answer: Yes (by consent).

"(13) Was said tract of land so devised at the instance of and by the procurement of Luther C. Arrowood? Answer: No.

"(14) Is the plaintiff's cause of action barred by the statute of limitation? Answer: No.

"(15) Did L. C. Arrowood enter into possession of said Chalmers Arrowood tract under the devise of William Arrowood as alleged? Answer: No.

"(16) At the time of the improvement and betterment of the land of William Arrowood by Luther C. Arrowood, was there a contract, agreement, and understanding subsisting between Luther C. Arrowood and William Arrowood by which the lands of William Arrowood, known as the 'Home Place,' were to be devised to Luther C. Arrowood in consideration of Luther C. Arrowood's improving the lands and giving to William Arrowood the use and benefit of such improvements and betterments during his life and otherwise supporting and maintaining said William Arrowood during his life? Answer: No."

The court set aside the verdict as to the second issue, and answered the issue, "Yes," and the defendant excepted. Judgment was entered for the plaintiff upon the amended verdict, and defendant again excepted and appealed.

F. I. Osborne, of Charlotte, and Carpenter & Carpenter and A. C. Jones, all of Gastonia, for appellant.

Mangum & Woltz and S. J. Durham, all of Gastonia, and Tillett & Guthrie, of Charlotte, for appellee.

WALKER J.

(after stating the facts as above). [] The court erred, not in setting aside the verdict, as to the second issue, but in answering the issue itself, and thereby reversing the jury's finding. The plaintiff contended that the second issue is immaterial, as the defendant, in the sixth section of his answer, admitted his insolvency at the time the improvements were made on his father's premises. Saying that "he owed little or nothing more than he has property to pay" was not definite enough for a...