Guthrie v. Bacon

• Decision Date: 18 November 1890
• Citation: 107 N.C. 337,12 S.E. 204
• Court: North Carolina Supreme Court
• Parties: Guthrie. v. Bacon et al.

107 N.C. 337

12 S.E. 204

Guthrie.

v.Bacon et al.

Supreme Court of North Carolina.

Nov. 18, 1890.

Setting Aside Fraudulent Conveyance—Pleading.

1. Though the debtor could not recover land placed in secret trust to defraud creditors, his assignee in bankruptcy, or the latter's grantee, is not estopped to claim it.

2. Under Code N. C. § 138, the statute of limitation must be pleaded, and cannot be taken advantage of by demurrer, even where an equitable claim appears on the face of the bill to be barred.

Appeal from superior court, Cumberland county; J. C. McRae, Judge.

Action by W. A. Guthrie, grantee of D. G. McRae, assignee in bankruptcy of E. W. Bacon, against E. W. Bacon, W. S. Hair, Mary M. Hair, C. K. Carter, Q. A. Hall, and P. V. Fisher, to enforce a parol trust to land held by W. S. Hair, and occupied by the other defendants named, except Bacon, as tenants.

Rose & Rose, for appellant.

N. W. Ray and T. H. Sutton, for appellees.

Shepherd, J. As this action was dismissed upon demurrer, we must, of course, assume that all of the allegations of the plaintiff are true. It appears from the complaint that E. W. Bacon purchased the land in controversy at an administration sale, paid for the same with his own money, and, for the purpose of defrauding his creditors, procured it to be conveyed to W. S. Hair, who agreed, by parol, to hold it in trust for him. It also appears that the said Hair and other defendants are claiming the land under and through the said fraudulent conveyance. It is plain that E. W. Bacon, by reason of his fraudulent intent, had no interest whatever in the property, which he could have asserted in a court of equity. In a similar case, it was said that such a deb tor " did not have even a right in equity, as it is alleged that the trust was infected with fraud; in which case the court will not act at the instance of either party." Page v. Goodman, 8 Ired. Eq. 16; Everett v. Raby, 104 N. C. 479, 10 S. E. Rep. 526. The creditors of Bacon, however, had a right to follow the fund which had thus been fraudulently withdrawn. Page v. Goodman, supra; Rhem v. Tull, 13 Ired. 57; Gowing v. Rich, 1 Ired. 553; Dobson v. Erwin, 1 Dev. & B. 569; Gentry v. Harper, 2 Jones, Eq. 177; McGill v. Harman, Id. 179; Wall v. Fairley, 77 N. C. 105; Dixon v. Dixon, 81 N. C. 323; Everett v. Raby, supra. This right vested in the assignee of Bacon when he became a bankrupt, and the assignee representing the creditors would not have been estopped from asserting it. Boone v. Hall, 7 Bush, 66; In re Metzger. 2 N. B. R. 355; Bradshaw v. Klein, 1 N. B. R. 542; In re Wynne, 4 N. B. R. 23. The plaintiff, under the peculiar provisions of the bankrupt law, and the very comprehensive language of the conveyance executed to him by the assignee, acquired the said right to pursue the fund, and the complaint therefore sets forth a cause of action.

The defendants, however, insist that the action is barred by the lapse of time, and our attention is called to the...