Hatnes v. Hoffman

• Decision Date: 12 March 1896
• Citation: 46 S.C. 157,24 S.E. 103
• Parties: HATNES. v. HOFFMAN et al.
• Court: South Carolina Supreme Court

24 S.E. 103

46 S.C. 157

HATNES.

v.HOFFMAN et al.

Supreme Court of South Carolina.

March 12, 1896.

Assignment fob Benefit of Creditors—Preference—Reservation of Homestead — Attorney's Pee.

1. Under Rev. St. 1893, § 2147, rendering illegal preferences to creditors within 90 days before the making of an assignment by an insolvent debtor, in fraud of the assignment law, a mortgage given within that time by an insolvent to his brother was not invalid, where it was shown that it covered only the debtor's homestead, which was exempt; that the debt secured was for borrowed money, with which the property was purchased; that the mortgage was given in compliance with a written agreement, made four years before, when the money was borrowed; and that the mortgagee did not know of the mortgagor's insolvency.

2. A reservation, in a deed of assignment, of such real and personal property of the assignor as is exempt under the homestead laws of the state, does not invalidate the assignment.

3. A provision for the payment of a fee to the assignor's attorney for preparing the assignment does not invalidate the assignment.

Appeal from common pleas circuit court of Barnwell county; Ernest Gary, Judge.

Action by B. F. Haynes against Joseph B. Hoffman and others to set aside an assignment for the benefit of creditors by said Hoffman, and a mortgage alleged to have been a preference. Judgment for plaintiff, and defendants appeal. Reversed.

The following are the pleadings and the affidavit of J. B. Hoffman, referred to in the opinion:

"B. F. Haynes, Plaintiff, against Joseph B. Hoffman. John S. C. Hoffman, and M. E. Izlar as Assignee of Said Joseph B. Hoffman, Defendants.

"The plaintiff above named, complaining on behalf of himself and all others, the creditors of the defendant Joseph B. Hoffman, who shall in due time come in, seek relief by, and contribute to, the expenses of this action, alleges:

"(1) That, on the 20th day of January, 1894, the plaintiff sold and delivered to the defendant Joseph B. Hoffman a quantity of tobacco, amounting, in value, to the sum of eighty-seven dollars and ninety-eight cents, at and for that price, which said defendant promised to pay.

"(2) That, in payment for said tobacco so sold to him, said Joseph B. Hoffman, defendant, on the 19th day of December, 1894, at Blackville, S. C, made and delivered to Bellinger, Townsend & O'Bannon, as attorneys for the plaintiff, his promissory note in writing, dated on that day, and thereby promised to pay, thirty days after said date, to the order of the said Bellinger, Townsend & O'Bannon, attorneys, the sum of eighty-seven dollars and ninety-eight cents with interest at eight per cent. per annum.

"(3) That said note was indorsed by said Bellinger, Townsend & O'Bannon, and made payable to the order of the plaintiffs, and delivered, so indorsed, to said plaintiffs, who are now the holders and owners thereof.

"(4) That no part of said note has been paid.

"(5) That the said defendant Joseph B. Hoffman was, at the time hereinafter mentioned, and still is, insolvent.

"(6) That, at the time hereinafter mentioned, the defendant John S. C. Hoffman was a creditor and near kinsman, being, as plaintiff is informed and believes, a brother, of the defendant Joseph Hoffman.

"(7) That, on the 31st day of December, 1894, there appeared of record, in the office of the register of mesne conveyance for the said county of Barnwell, a certain deed of mortgage, purporting to have been executed and delivered by said Joseph B. Hoffman to the said John S. C. Hoffman, and under which said John S. C. Hoffman claims a lien upon the property therein mentioned, of which mortgage the following is a copy:

" 'State of South Carolina, County of Barnwell. To All Whom These Presents may Concern: I, J. B. Hoffman, of Blackville, in the county of Barnwell, in the said state, send greetings: Whereas, I, the said Joseph B. Hoffman, in and by my certain bond or obligation, bearing date the day of the date of these presents, stand firmly held and bound unto John S. C. Hoffman, of the county of Orangeburg, in said state, in.the penal sum of fourteen hundred ($1,400) dollars, conditioned for the payment.of the full and just sum of seven hundred ($700) dollars, in three equal annual installments from date, at the rate of eight per centum per annum, payable annually, till paid, and a reasonable counsel fee if collected by foreclosure, as in and by the said bond and condition thereof, reference being thereunto had. will more fully appear: Now, know all men, that I, the said Joseph B. Hoffman, in consideration of the said debt and sum of money aforesaid, and for the better securing the payment thereof to the said John S. C. Hoffman according to the condition of the said bond, and also in consideration of the further sum of three dollars to me, the said Joseph B. Hoffman, in hand well and truly paid by the said John S. C. Hoffman, at and before the sealing and delivery of these presents, the receipt whereof is hereby acknowledged, have granted, bargained, sold, and released, and by these presents do grant, bargain, sell, and release, unto the said John S. C. Hoffman all that certain lot of land, with buildings thereon, situate, lying, and being in the town of Blackville, in the county of Barnwell, in said state of South Carolina, measuring one hundred (100) feet on Dexter street, and fronting thereon, and running back from said street, and measuring in depth one hundred and fifty feet, and bounded on the north by said Dexter street, on the south by lot now or formerly of Richard Dunbar, Jr., on the east by lot now or formerly of Dr. L. C. Stephens, and on west by lot now or formerly of Mrs. S. R. Drew. The lot hereby mortgaged is the same lot of land conveyed to me, the said Joseph B. Hoffman, by E. R. Myer, by his deed of conveyance bearing date the 27th day of April, 1889, and recorded in the office of the register of mesne conveyance for said county of Barnwell in Book 5 Q, page 259, the 15th day of August,

A. D. 1889. Together with all and singular the rights, members, hereditaments, and appurtenances to the said premises belonging or in anywise incident or appertaining. To have and to hold, all and singular, the said premises unto the said John S. C. Hoffman, his heirs and assigns, forever. And I do hereby bind myself, and my heirs, executors, and administrators, to warrant and forever defend, all and singular, the said premises unto the said John S. C. Hoffman, his heirs and assigns, from and against myself and my heirs, executors, administrators, and assigns, and against all other persons whomsoever, lawfully claiming or to claim the same, or any part thereof. And it is agreed by and between the said parties, that the said mortgagor, his heirs, executors, or administrators, shall and will forthwith insure the house and building on said lot, and keep the same insured from loss or damage by fire, and assign the policy of insurance to the said John S. C. Hoffman, his executors, administrators, or assigns; and in case he or they shall at any time neglect or fail to do so, then the said mortgagee, his executors, administrators, or assigns, may cause the same to be insured in their own name, and reimburse themselves for the premium and expense of such insurance under the mortgage. Provided always, nevertheless, and it is the true intent and meaning of the parties to these presents, that if I, the said Joseph

B. Hoffman, do and shall well and truly pay or cause to be paid unto the said John S. C. Hoffman the said debt or sum of money aforesaid, with the interest thereon, if any shall be due, according to the true intent and meaning of the said bond and condition thereunder written, then this deed of bargain and sale shall cease, determine, and be utterly null and void; otherwise, it shall remain in full force and virtue. And it Is agreed, by and between the parties, that I, the said Joseph B. Hoffman, to hold and enjoy said premises until default of payment shall be made. Witness my hand and seal this ——-day of ——, in the year of our Lord one thousand eight hundred and ninety-four, and in the one hundred and nineteenth year of the sovereignty and independence of the United States of America. J. B. Hoffman. [L. S.]

" 'Signed, sealed, and delivered in the presence of M. P. Foster, I;. T. Izlar.' —"The said deed being probated on the 29th day of December, 1894, and the dower of Mrs. Hattie Hoffman being also renounced on said day, on which day, these plaintiffs are inform-ed and believe, the said deed was also executed and delivered. And these plaintiffs further allege that, at the time of the execution and delivery of said deed of mortgage, the said John S. C. Hoffman had reasonable cause to know and believe that said Joseph B. Hoffman was insolvent; and plaintiff is informed and believes said mortgage was without any consideration, save and except a past-due debt from said Joseph B. Hoffman to John S. C. Hoffman, and intended to hinder, delay, and defraud the other creditors of said Joseph B. Hoffman, and give a preference over them to said John S. G. Hoffman.

"(8) That, within ninety days after the execution and delivery of said deed of mortgage, to wit, on the 11th day of February, 1895, the said Joseph B. Hoffman made, executed, and delivered a deed of assignment to the defendant M. E. Izlar, in the words following, to wit:

" 'State of South Carolina, County of Barnwell. Whereas, I, J. B. Hoffman, merchant, of the town of Blackville, in the said state and county, am indebted to sundry persons in various amounts, aggregating in round numbers one thousand three hundred dollars, and although having assets estimated in round numbers at one thousand eight hundred dollars as appears by Schedules A and B annexed, am unable to pay the demands against me as they fall due; and whereas, it is my desire and intention that all of my said creditors shall share alike and equitably in the distribution of my assets: Now,...