Johnston-Crews Co. v. Folk

• Decision Date: 27 February 1922
• Docket Number: 10841.
• Citation: 111 S.E. 15,118 S.C. 470
• Parties: JOHNSTON-CREWS CO. v. FOLK ET AL.
• Court: South Carolina Supreme Court

111 S.E. 15

118 S.C. 470

JOHNSTON-CREWS CO. v. FOLK ET AL.

No. 10841.

Supreme Court of South Carolina

February 27, 1922

Appeal from Common Pleas Circuit Court of Hampton County; J. W. De Vore, Judge.

Bill by the Johnston-Crews Company against Richie B. Folk and others. Judgment for plaintiff, and the defendants appeal. Affirmed.

The decree of Judge De Vore was as follows:

This matter comes before me on report of the referee herein. This is an action to declare invalid a deed from J. G. Folk to Richie B. Folk, née Chovin, as it affects the rights of plaintiff and other creditors in like situation and circumstance. The deed in question is dated December 24 1912, and was recorded January 20, 1914. It purported to convey a one-third interest in 1,000 acres of land in Hampton county, S.C. The value of the land is between $10 and $30 per acre. On the executions on the various judgments proved returns nulla bona have been made by the sheriff. The following claims have been proved: Johnston-Crews Company judgment dated February 21, 1917, $591.67; Southern Fertilizer & Chemical Company, judgment dated June 25, 1917 $572.10; L. C. Peeples Clothing Company, judgment dated February 21, 1917, $110.25; Crumley-Sharp Hardware Company, judgment dated February 21, 1917, $83.67; W. L. Douglas Hat Company, judgment dated February 21, 1917, $133.75; International Shoe Company, judgment dated February 13, 1917, $300; H. S. Meinhard & Co., $513.44--all of which accrued during 1913.

In addition to the foregoing quite a number of creditors holding claims which were made between the date of the deed and the recording thereof were filed with the attorney for plaintiff and the referee .

There seems to be very little dispute regarding the facts of the case. J. G. Folk operated a store at Brunson during 1913, and made numerous accounts. So far as the records in the office of the clerk of court went, there was nothing to disclose the transaction of the deed in question. There is some testimony that credit was advanced him on faith of his ostensible ownership of one-third of a 1,000-acre plantation. He conveyed this in 1912, and the deed was not recorded by his wife, the grantee, until 1914. J. G. Folk testified that he was "broke" when he went in business. He was insolvent as the record shows. No apparent dispute has arisen between the parties or in argument as to the facts. Hence, in so far as this case is concerned, the prayer of the plaintiff must be granted.

The defendants, some of whom have been recently substituted for J. G. Folk, now deceased, mainly rely, and certainly in argument of counsel before me, relied upon the plea of res adjudicata set up in the answer. There was a suit brought by H. S. Meinhard & Co. for itself and others against J. G. Folk and his wife prior to the bringing of this suit by Johnston-Crews Company for itself and others against the same defendants. The Meinhard suit was an action to set aside the deed for fraud as the complaint discloses. The final order in that suit is short, and is as follows:

"The above-entitled case came up before me upon exceptions to the report of the special referee herein and after hearing argument, I find that there was not sufficient testimony to warrant me in setting aside the deed in question for fraud, the complaint stating but the one cause of action for fraud. The complaint was not drawn to set aside the deed under the recording act."

It will be observed that in the Meinhard suit it was adjudicated that the complaint there stated but the one cause of action for fraud, and that the court there specifically stated that the complaint was not drawn to set aside the deed under the recording act. If all other essentials in the establishment of the plea of res adjudicata were present, this court is of the opinion that judgment in the Meinhard case would prevent the successful interposition of the plea in the instant case. A reading of the two complaints clearly discloses that different causes of action are stated therein; the one being for fraud, the other for the recording act.

Therefore, it is ordered, adjudged and decreed that the title deed executed by J. G. Folk to Richie B. Chovin, dated December 24, 1912, and recorded January 20, 1914, in Book 22-D, at page 76, in the office of the clerk of court for Hampton county, S. C., be, and same is hereby, declared invalid, and is set aside as to those unpaid creditors hereinabove mentioned and those creditors whose accounts with J. G. Folk were created between the date of the said deed, to wit, December 24, 1912, and the date of the record thereof, to wit, January 20, 1914, and to those to whom J. G. Folk became indebted between said dates.

There are quite a number of creditors whose claims were filed with plaintiff's attorney at the commencement of this action, and also filed with the referee. In order that such creditors may participate in the benefit of this decree, it is ordered that E. M. Peeples be appointed special referee to herein determine the validity and dates of the said claims, and, if no appeal be taken from the decision of said referee, then such claims may be allowed to participate in the benefit of this decree.

It is further ordered that M. F. Thomas be, and he is hereby, appointed special master for the specific purpose of offering for sale and selling the property mentioned and described in the said deed and hereinafter described. It is ordered that the said M. F. Thomas, as special master, be, and he is hereby, required to offer for sale or sell the said property in front of the courthouse at Hampton, S. C., on some convenient sales day hereafter to the highest bidder for cash during the legal hours of sale, said sale to be made after three weeks advertisement of the time, place, and condition of said sale in the Hampton County Guardian, a newspaper, and by posting a copy of such advertisement on the courthouse door of Hampton, S. C.; that upon such sale the said special master shall make, execute, and deliver to the purchaser a good and sufficient title deed to the one-third interest of J. G. Folk, or his estate in and to all that piece, parcel, or tract of land in Hampton county, S. C., containing 1,000 acres, more or less, bounded on the north by lands of Gifford and Beach Branch Church, on the east by Greenleaf, Parnell and others, on the south by the estate of Franklin Johnson, and on the west by lands of Mears and estate of Lawton; that out of the proceeds of such sale the said special master shall first pay the costs and expenses of this action, and then pay to the creditors participating in the benefits of this decree as hereinabove set forth the amount of their respective claims, and, if there be any remaining funds in his hands as such special master, that such be held for disbursement subject to the further orders of this court.

Further ordered that either party shall have leave to apply at the foot of this order for such further orders as may be desired, provided such applicant shall give at least five days' notice to the adverse party of the grounds for such further order.

Let copies of this order be served upon counsel for the defendants forthwith.

W. B. De Loach, of Camden, for appellants.

George Warren, of Hampton, for respondent.

COTHRAN J.

A creditors' bill, seeking to have the court declare invalid, so far as their claims are concerned, a certain deed executed by the debtor to a young woman (afterwards his wife), not recorded within the statutory period, and to subject the interest of the debtor to the payment of said claims.

The following facts appeared: In the year 1912, J. G. Folk, the debtor, was a farmer near Brunson, S.C. He testified that the grantee of the deed, Miss Richie B. Chovin, had been a member of his family since she was 8 years old; that he lost his wife in 1912, and the young woman, who was then about 18 years old and in school in Charleston, was induced to return to his home and assume the cares of his household, upon his promise to convey to her his one-third interest in a tract of land which belonged to his deceased wife, containing about 1,000 acres and valued at $10 to $30 per acre; that she did return, and on December 24, 1912, he executed and delivered the deed in compliance with his agreement; that he married the young woman in 1914. This deed though executed in 1912, was not put upon record until January 20, 1914. In the meantime, in August, 1913, Folk embarked in the mercantile business, and during the year of 1913, contracted debts to wholesale merchants and others to the aggregate amount of about $2,500. Early in the year 1917 these claims were put in judgment, and nulla bona returns were entered upon the executions. At some time prior to February 13, 1918, exactly when does not appear in the record, an action was instituted by Meinhard & Bro., creditors of J. G. Folk--a creditors' bill, against him and his wife--for the purpose of having said deed declared fraudulent and void, under the statute of Elizabeth. This action was terminated in favor of the defendants by the following decree of Judge Spain:

"The above-entitled case came up before me upon exceptions to the report of the special referee herein, and, after hearing argument, I find that there was not sufficient testimony to warrant me in setting aside the deed in question for fraud; the complaint stating but one cause of action for fraud. The complaint was not drawn to set aside the deed under the recording act."

This decree was dated February 13, 1918. On February 20, 1918, a week thereafter, the plaintiff, Johnson-Crews Company, instituted this action for the purpose above stated.

The defendants insist that, the plaintiff having come into the Meinhard suit as a creditor, the decree...