Matthews v. Matthews
| Decision Date | 07 August 1945 |
| Docket Number | 15764. |
| Citation | 35 S.E.2d 157,207 S.C. 170 |
| Parties | MATTHEWS v. MATTHEWS et al. |
| Court | South Carolina Supreme Court |
McEachin & Townsend, of Florence, for appellants.
Willcox Hardee, Houck & Wallace, of Florence, for respondent.
This is an appeal from an order setting aside and declaring null and void as against the respondent, a judgment creditor, an assignment by C. Colvin Matthews to his wife, Lillian E Matthews, of certain permanent disability benefits claimed by the transferor under a policy of insurance issued by the Jefferson Standard Life Insurance Company. The lower Court held the assignment invalid both under the Statute of Elizabeth, Section 8696 of the Code of 1942, and under the Assignment Act, Section 9106 of the Code of 1942.
In 1927 a judgment was obtained against appellant C. Colvin Matthews on a note which he executed in favor of his father, J. W. J Matthews. In 1938, no effort having been made to revive said judgment, an action was commenced upon the original judgment resulting in a new judgment for $1930.48. Execution thereon was duly issued upon which a 'nulla bona' return was made by the Sheriff of Florence County. No part of the judgment has been paid. Thereafter appellants were examined in supplementary proceedings before the County Judge of Florence County, appellant C. Colvin Matthews on January 8, 1944, and his wife on January 13, 1944.
Appellant C. Colvin Matthews procured in 1931 a policy of life insurance from the Jefferson Standard Life Insurance Company which contained a disability clause providing for the payment of $30 per month in the event he became totally and permanently disabled. Thereafter a claim for total and permanent disability benefits was made and allowed, and the Company paid said amount to the insured from August, 1934, to September 8, 1943, at which time it declined to make further payments, contending that the insured was no longer totally disabled, Appellants claim that on September 11, 1943, the insured assigned to his wife all his interest in said disability benefits by the following instrument:
Respondent commenced this action on January 21, 1944, for the purpose of setting aside the alleged assignment upon the grounds that it was void under the Statute of Elizabeth and constituted an unlawful preference under the Assignment Statute. Appellants denied that there was any fraudulent intent on their part in making and accepting said assignment or that such constituted a preference, and alleged that the assignment was made for a valuable consideration in that it was executed 'to partially reimburse' the transferee 'for her expenditure made and to be made for the support of the family.' Testimony on the issues presented, which, apart from the documentary evidence, consisted only of an examination of appellants, was taken before the County Judge, who thereafter in a well reasoned decree held the assignment invalid on both grounds.
It is undisputed that Mr. Matthews is insolvent and that the only asset which he owned was the claim for disability benefits which he contends was assigned to his wife. Mrs. Matthews testified that their home and automobile were purchased entirely with funds previously earned by her while working; that it required about $75 a month to support the family, consisting of herself, her husband and two children; that her husband's only contribution to this support was the sum of $30 per month which he received as disability benefits from the Insurance Company; that after the Company refused to pay further disability, she alone supported the family; that no consideration was paid when the assignment was executed, but it was agreed that thereafter any disability benefits collected would be paid to her in partial reimbursement for her support of the family; and that her husband dictated to her the terms of the assignment, which she wrote, and same was executed when no one was present. She admitted that she had earned no salary since 1940. The testimony of Mr. Matthews was substantially the same as that of his wife. He admitted that shortly prior to the time in question, he made a settlement with another insurance company from which he received the sum of $1500. He stated that at that time he owed his wife about $1100 which he paid from the proceeds of this settlement, and the balance of $400 was used for the support of himself and the family. His explanation of the assignment in controversy is as follows:
It is undisputed that the Insurance Company was never notified of the alleged assignment. It further appears that on December 17, 1943, Mr. Matthews instituted suit against the Insurance Company for the recovery of the unpaid disability benefits and that no reference was made in the complaint to the assignment in question. According to the record, the existence of this alleged assignment was not disclosed until Mr. Matthews was examined in supplementary proceedings on January 8, 1944. Two days later, on January 10, 1944, an amended complaint was served in which his wife was designated as a party defendant. In this complaint it is alleged that the assignment was made 'as security for money advanced and to be advanced, for the support of plaintiff's family, and for this reason she (Mrs. Matthews) is made a party to this action.'
The lower Court held that the assignment was voluntary and without consideration as against the respondent, an existing judgment creditor when the assignment was made. We are in accord with this conclusion.
The following from 37 C.J.S., Fraudulent Conveyances, § 149, page 970, is sustained by...
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