McDaniel v. Allen

• Decision Date: 19 August 1975
• Docket Number: No. 20083,20083
• Citation: 217 S.E.2d 773,265 S.C. 237
• Court: South Carolina Supreme Court
• Parties: C. M. McDANIEL, Appellant, v. Ada F. ALLEN and Grant R. Allen, Respondents.

Page 773

217 S.E.2d 773

265 S.C. 237

C. M. McDANIEL, Appellant, v. Ada F. ALLEN and Grant R. Allen, Respondents.

No. 20083.

Supreme Court of South Carolina.

Aug. 19, 1975.

Felix L. Finley, Jr., Pickens, for appellant.

Earle McGee, Rice, Anderson, for respondents.

MOSS, Chief Justice:

C. M. McDaniel, the appellant herein, on July 1, 1971, recovered a judgment in the Court of Common Pleas for Greenville County against Grant R. Allen, in the amount of $52,973.43. This judgment was duly entered in the office of the Clerk of Court for Greenville County, and on July 6, 1971, was duly transcripted to Anderson County and entered of record in the Clerk of Court's Office. Thereafter, an execution on said judgment was duly issued and delivered to the sheriff of Anderson County, and such was returned Nulla bona.

The appellant instituted this equitable action against Ada F. Allen and Grant R. Allen, the respondents herein, to set aside a conveyance of real estate by Grant R. Allen to his wife, Ada F. Allen, dated and recorded on June 24, 1971, in Deed Book 16--X, Page 70, R.M.C. Office for Anderson County. The appellant alleges that this conveyance was given without valuable consideration with the intent to defraud the appellant, a judgment creditor, in violation of the Statute of Elizabeth, Section 57--301 of the Code. The respondents' answer was a general denial.

This case was referred to the Probate Judge of Anderson County, as Special Referee, who held a Reference and filed a Report. Exceptions to the Report were argued before the presiding judge who confirmed the Master's findings of fact and conclusions of law with certain modifications. The appellant prosecutes this appeal from the findings of the Special Referee and the trial judge.

It appears from the record that the lot of land in question was conveyed on May 20, 1965, by deed of record in Deed Book 14--R at Page 267, R.M.C. Office for Anderson County, to the respondents by Audrey K. May, individually, and as executrix of the will of Merrill R. May, subject to a mortgage in favor of Perpetual Building and Loan Association of Anderson, South Carolina.

The deed of Grant R. Allen to Ada F. Allen, which the appellant seeks to set aside, recites a consideration of $2500 and conveys the right, title, and interest of the husband in and to the lot described therein. The preamble in this deed states that there is a mortgage upon the said property in favor of the Perpetual Building and Loan Association, and the payments upon said mortgage have been primarily made by Ada F. Allen since the purchase of the property. It is further recited that the parties desire to have settlement of their property rights as between them with regard to said property. The amount of the indebtedness to the Building and Loan, as of the date of the Reference on May 4, 1972, was $16,105.76. The monthly payments were $158. Ther is documentary evidence that Ada F. Allen paid from her personal funds a down payment of $500 and upon the delivery of the deed to the property in question, she paid an additional amount of $2,290.52, making a total of $2,790.52.

It appears that on June 24, 1971, the respondents consulted with an attorney and tax expert concerning the transfer of Grant R. Allen's interest in the property to Ada F. Allen. He made certain calculations in order to determine the interest of Grant R. Allen in the property. He testified that he had made the income tax returns for the Allens for some period of time and knew the financial situation of the parties. Based upon this prior knowledge and his calculations, he determined that $2500 was more money than the value of Grant R. Allen's interest in the property. He also determined as a fact that most of the house payments had been made by Ada F. Allen. The record shows that at the time of the execution and delivery of the deed by the husband to the wife she gave him a personal check in the amount of $2500 as consideration for his interest in the property.

The wife testified that she worked until July 15, 1970, and for three years prior to her retirement she earned $11,000 per year. She further testified that her purpose in working was to buy and pay for a home, and that she made ninety per cent of the mortgage payments. Her testimony was substantiated by her personal checks to the Building and Loan. She categorically stated that she had no intent of defrauding anyone in making the settlement with her husband and was only attempting to protect her own interest because it was her property, and she only wanted what was hers. She further testified that she had placed in the home at her own expense carpet and drapes and had planted shrubbery around the house. She said that she had personally bought a lot 10 feet wide adjoining the property in question. She said she had also paid off the second mortgage on the property in the amount of $1500. There is testimony that the value of the house and lot in question was $35,000. The appellant agreed that this was the value of the house and it was confirmed by an appraiser in his behalf.

The Special Referee found as a fact and concluded as a matter of law that the conveyance from Grant R. Allen to his wife was based upon a fair and adequate consideration, and there was no intent to defraud the appellant. Upon exceptions being taken to this holding, the trial judge concurred in the conclusion of the Special Referee. This appeal followed.

Under the provisions of the Statute of Elizabeth, Section 57--301, every conveyance made 'for any intent or purpose to delay, hinder, or defraud creditors and others of their just and lawful actions, suits, debts, * * * shall be deemed and taken * * * to be clearly and utterly void, frustrate, and of no effect.'

In the case of Jeffords v. Berry, 247 S.C. 347, 147 S.E.2d 415, Justice Bussey, speaking for this Court, and discussing fraudulent conveyances under Section 57--301 of the Code, said:

'Our courts, in interpreting this statute, have held that conveyances shall be set aside under two conditions: First, where the transfer is made by the grantor with the actual intent of defrauding his creditors where that intent is imputable to the grantee, even though there is a valuable consideration; and, second, where a transfer is made without actual intent to defraud the grantor's creditors, but without consideration. Farmers' Bank v. Bradham, 129 S.C. 270, 123 S.E. 835; McInnis v. McRae, 134 S.C. 162, 132 S.E. 473.'

The deed in question was not without consideration; it does not fall within the second classification above mentioned and may not be set aside as fraudulent without an actual intent on the part of the grantor imputable to the grantee to delay, hinder, or defraud creditors of the grantor. There is no evidence in this record that the conveyance was made without consideration or that the consideration named was inadequate.

In the case of McElwee v. Kennedy, 56 S.C. 154, 34 S.E. 86, we said:

'To annul for fraud a deed based upon a valuable consideration, it must not only be shown that the grantor intended thereby to hinder, delay or defraud creditors, but it must also appear that the grantee participated in such fraudulent purpose. Even if we were to assume that there is evidence of Mala fides in the grantor, yet if the sole purpose of the grantee was to secure her claims, having no intent to hinder, delay or defeat other creditors, her title cannot be affected by the Mala fides of the grantor. The evidence fails utterly to show any intent on the part of the grantee to defraud her husband's creditors, and merely shows a purpose to secure her own Bona fide claims.'

In an equity case, findings of fact by a Special Referee and concurred in by a circuit judge, are conclusive upon this Court, and will not be disturbed unless it is shown that such findings are without any evidence to support them or are against the clear preponderance of the evidence. Carsten v. Wilson, 241 S.C. 516, 129 S.E.2d 431.

We have reviewed the evidence in this case and we conclude such supports the factual conclusions reached by the lower court. We think the evidence fails to show any intent on the part of the wife to defraud her husband's creditors, and merely shows a purpose to secure her own Bona fide claim.

The appellant has assigned a number of exceptions to the decree of the...