Halcombe v. Ray

• Decision Date: 31 December 1840
• Citation: 23 N.C. 340,1 Ired. 340
• Parties: DEN ON DEMISE OF ABNER HALCOMBE v. JAMES RAY.
• Court: North Carolina Supreme Court

1 Ired. 340

23 N.C. 340

DEN ON DEMISE OF ABNER HALCOMBE

v.JAMES RAY.

Supreme Court of North Carolina.

December Term, 1840.

A deed, absolute on its face, but intended as a mortgage only, is fraudulent and void against creditors and purchasers, and against subsequent as well as prior creditors.

Such a deed cannot be rendered valid by any subsequent agreement between the grantor and grantee, that the grantee should have all the interest of the grantor in the premises, and by the actual payment by the grantee, in pursuance of such agreement, of the full value of the land to the grantor's creditors.

Nor even where the deed is re-delivered subsequently to and in pursuance of such agreement. Having taken effect, as between the parties, on the first delivery, the deed could not be surrendered to be redelivered.

The cases of Gregory v. Perkins, 4 Dev. 50, and Martin v Cowles, 1 Dev. and Bat. 29, cited and approved.

This was an action of Ejectment, tried at the Fall Term, 1840, of Yancy Superior Court, before his honor Judge BAILEY. The jury found a verdict for the plaintiff and judgment was rendered thereon, from which the defendant appealed to the Supreme Court.

The facts of the case are stated by the court in delivering their opinion.

Francis for the plaintiff .

Hoke and Saunders for the defendant .

RUFFIN, Chief Justice.

Robert P. Tredway purchased the premises in controversy from one Bailey, and took a conveyance in fee, on the 25th of September, 1835; and both of the parties to this suit claim under Tredway. The price he was to give Bailey was $1000; of which $500 was secured by Tredway's own bond, and the other $500 by the bond of Tredway and the defendant, Ray, as his surety. At the time Ray executed the bonds, it was understood between those three persons, that Ray was to be indemnified from loss by a conveyance of the land as a counter-security; and he and Tredway requested Bailey to make his conveyance directly to Ray, instead of Tredway. But Bailey declined doing so, and Ray, who was father-in-law of Tredway, then became surety, upon an agreement of Tredway to secure him by a mortgage of the land.

On the 28th of September, 1835, Ray took from Tredway conveyances for the lands purchased from Bailey, and also for all his other property, real and personal; all which were absolute and unconditional in their terms, but were really given upon an agreement between the parties, that they should operate as a counter-security to Ray, in the manner above mentioned. In March, 1836, Halcombe, the lessor of the plaintiff, and one Love and other creditors, brought actions against Tredway; and he, in April following, having remained in possession of all the property he had conveyed to Ray, and being still indebted to those persons, and also to Bailey for the land and to others, made a contract to sell to Ray all his remaining interest or right of redemption in the land, and removed from the State. All those debts existed at or before the execution of the deed to Ray of the 28th of September, 1835, unless it might be the debt to the lessor of the plaintiff; and it did not appear whether that was contracted before or after that day. The land is of the value of $1000; and after Tredway left this State, the defendant paid $400, in part of the debt to Bailey, for which he was surety; and there remains due thereon $100, for which he is still liable. He also paid the further sum of $500 to Love and other creditors of Tredway, and assumed to pay $200 more for him. In June, 1836, judgment was recovered in the action brought by Halcombe against Tredway, and under a fieri facias thereon the land was sold and purchased by the lessor of the plaintiff.

On the trial, the counsel for the defendant moved the court to instruct the jury that the conveyance to the defendant was good, and vested the land in the defendant, although it was absolute in form, and although it was intended it should only be a security in the nature of a mortgage, to indemnify the defendant from loss as Tredway's security, provided the deed, in the opinion of the jury, was executed with the bona fide purpose that it should be used or operate only as such counter-security, and with no actual intent to deceive and hinder Tredway's creditors. And the counsel moved for the further instruction, that, if the foregoing proposition were not true in respect to Tredway's creditors, whose debts existed at the time he conveyed to Ray, yet it was, at least, true in respect to the debt to the lessor of the plaintiff, who did not shew when he became a creditor. And the counsel for the defendant moved the court further to instruct the jury that the purchase, by the defendant in April, 1836, of the remaining or absolute interest of Tredway, confirmed and made effectual the deed of September, 1835, as...