Jeffords v. Berry
| Citation | 247 S.C. 347,147 S.E.2d 415 |
| Decision Date | 15 March 1966 |
| Docket Number | No. 18476,18476 |
| Court | United States State Supreme Court of South Carolina |
| Parties | T. T. JEFFORDS, as Receiver for Shuler & Smoak, Inc., Respondent, v. Andrew BERRY and R. Sumter Williams, Jr., Appellants. |
Andrew Berry, Orangeburg, for appellants.
R. A. Bowman, Orangeburg, for respondent.
The respondent, as receiver for Shuler & Smoak, Inc., an insolvent corporation, seeks in this action to set aside a certain deed of realty by the said corporation to appellants, on the ground that such was fraudulent. The cause was referred to a special referee and, pursuant to his recommendations and report, the circuit court entered a decree setting aside and canceling said deed, and from that order comes this appeal.
The deed in issue was dated January 3, 1965, and conveyed to appellants certain business property in the City of Orangeburg, found by the special referee to have a market value of $36,000, such finding of fact being fully supported by the evidence. The deed recited a consideration of $1,000, which was actually paid, and that the conveyance was made subject to three mortgages totaling $30,900, more or less, and subject to taxes and other liens of record against the property, it being stipulated in the deed that none of such indebtedness was assumed by the grantees. The appellant Berry is an attorney, who had from time to time represented the insolvent corporation over a period of nearly thirty years, but was not regularly retained by it. The evidence shows without dispute that at the time of the conveyance the corporation was insolvent, and, further, that in either October or November prior to the conveyance, Mr. Berry and an official of the corporation had informed the holders of the two largest mortgages that the corporation was insolvent and did not have any money and could not pay its bills.
While the respondent offered evidence as to the market value of the real property involved, he offered no evidence as to the exact amounts of the various liens against the realty at the time such was sold, and no other evidence as to the market value of the equity purchased by appellants. The only evidence as to the amount of the outstanding liens was the testimony of Berry, which was neither precise nor complete thereabout, but from his testimony it is inferable that the aggregate of the liens was somewhere between thirty-one and thirty-two thousand dollars. The record contains no evidence as to the attitude of the several mortgagees with reference to whether or not foreclosures thereof were immediately threatened. Of significance, we think, however, is the fact that Berry, two days after the date of the deed, paid to the holder of the first mortgage, on behalf of the grantees, the sum of $1,265.88, it being inferential that such amount was delinquent and overdue thereon.
The evidence leaves no doubt, we think, that the corporation was insolvent and that knowledge of its insolvency was either known or imputable to the grantees. While the referee's finding that the fair market value of the realty was $36,000 is supported by the evidence, his conclusion or finding that the value of the property, over the lien indebtedness, was approximately $6,000, is, we think, not supported by evidence. He made no other finding with respect to the value of the equity purchased by appellants, and no specific finding as to the inadequacy of the consideration paid therefor. He made no finding of any fraudulent intent on the part of either the grantor or the grantees, but simply concluded that,
'The aforesaid deed is void as prejudicial to the rights of the unsecured creditors and should be set aside and canceled of record.'
The circuit court overruled exceptions to the report of the referee and entered a decree in conformity with his recommendations. The court concurred in the findings of the referee to the effect that the grantor was insolvent and that such fact was known to the appellant, Berry, and that Berry's knowledge thereabout was imputable to his co-appellant. Additionally, the circuit judge found that the consideration for the deed was inadequate, but did not find that it was grossly inadequate. Like the referee, he made no finding of any fraudulent intent on the part of either the grantor or the grantees. To the contrary, he exonerated the grantees in the following language,
'This contest does not involve the character or competence of Mr. Andrew Berry, individually or as an attorney, or his co-defendant, R. Sumter Williams, Jr., and nothing in this order will or should be construed as a reflection upon the character or competence of either.'
His order setting aside the deed appears to be based only on the insolvency of the grantor, knowledge of such insolvency by the grantees, and...
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In re JR Deans Co., Inc., Bankruptcy No. 97-08095-W. Adversary No. 99-80231-W.
...at 258. In Royal Z Lanes, the transferee paid $195,389.00 for property worth over $1 million. The court noted: In Jeffords v. Berry, 247 S.C. 347, 147 S.E.2d 415 (S.C.1966), we found that "grossly inadequate" consideration is "a strong badge of fraud" but we specifically rejected the argume......
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John K Fort v. Kudeviz (In re, Genesis Press, Inc.)
...and "withoutvaluable consideration" are not synonymous in the law. 337 S.C. at 595, 524 S.E.2d at 622 (quoting Jeffords v. Berry, 247 S.C. 347, 147 S.E.2d 415, 418 (1966)). "Grossly inadequate consideration does not render a conveyance voluntary; rather, the inadequacy of the consideration ......
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John K Fort v. Kudeviz (In re, Genesis Press, Inc.)
...and "withoutPage 14 valuable consideration" are not synonymous in the law. 337 S.C. at 595, 524 S.E.2d at 622 (quoting Jeffords v. Berry, 247 S.C. 347, 147 S.E.2d 415, 418 (1966)). "Grossly inadequate consideration does not render a conveyance voluntary; rather, the inadequacy of the consid......
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John K Fort v. Kudeviz (In re, Genesis Press, Inc.)
...and "withoutPage 14 valuable consideration" are not synonymous in the law. 337 S.C. at 595, 524 S.E.2d at 622 (quoting Jeffords v. Berry, 247 S.C. 347, 147 S.E.2d 415, 418 (1966)). "Grossly inadequate consideration does not render a conveyance voluntary; rather, the inadequacy of the consid......