McElwee v. Kennedy

• Decision Date: 09 October 1899
• Parties: McELWEE v. KENNEDY et al.
• Court: South Carolina Supreme Court

34 S.E. 86

56 S.C. 154

McELWEE v. KENNEDY et al.

Supreme Court of South Carolina

October 9, 1899

Appeal from common pleas circuit court of York county; D. A Townsend, Judge.

Action by Margaret A. McElwee against Eliza J. Kennedy and others. There was a judgment for defendants, and plaintiff appeals. Affirmed.

The following are the opinion and decree of the circuit court (Townsend, J.):

"This action was commenced September 28, 1897, to vacate two deeds from James R. Kennedy to Eliza J. Kennedy, dated January 15, 1896, and February 25, 1896, respectively. The plaintiff, at the date of the commencement of this action and all of the defendants above named except Eliza J. Kennedy and James R. Kennedy, were judgment creditors of the firm of Kennedy Bros. & Barron, holding judgments which were recovered and entered of even date and equal rank. The attorneys for the plaintiff--some or all of them --are also the attorneys for the defendant judgment creditors, who have made common cause with the plaintiff. This action is therefore one for the benefit of the judgment creditors of the firm of Kennedy Bros. & Barron. The plaintiff and the defendant judgment creditors, who adopt the allegations of her complaint, charge that the two deeds which they seek to vacate are fraudulent and void as to creditors under the statute of Elizabeth. The defendants James R Kennedy and Eliza J. Kennedy claim that each of said deeds was executed upon a good and valuable consideration, and was bona fide,--one of them (the deed for 443 acres of land) having been made in the execution of a trust created in 1852 when this land, which at that time belonged to Eliza J Kennedy, was sold under an order of the court of equity for York district, and subsequently, within 20 years from its creation, verbally declared, and thereafter repeatedly and continuously acknowledged, until the trust was finally executed by the making and delivery of the deed on the 25th February, 1896; and the other (the deed of 307 acres of land, dated 15th January, 1896) having been made in part payment of the rents which James R. Kennedy, as the agent and trustee, collected from the tract of 443 acres, and accrued interest thereon, for which the said James R. Kennedy promised to account, leaving a large balance still unpaid. The testimony shows, and I do find, that Dr. Henry R. Smith, late of York district, in the state aforesaid, died intestate in the year 1846, leaving the defendant Eliza J. Kennedy, then Eliza J. Smith, a girl of about 5 years of age, his sole heir at law. One of the tracts of land described in the complaint in this action--the tract of 443 acres--constituted a part of the estate of the said Dr. Henry R. Smith. In the year 1852, under a proceeding in the court of equity of York district, instituted by Robert Gilfillan (who had been appointed general guardian of the said Eliza J. Smith) as such guardian, the said tract of land was sold under order of the court of equity made in said cause, and was purchased by Samuel Blair for the sum of $4,208, which, pursuant to the terms of the decree, was to be paid in three equal annual installments, with interest from the date of sale, sales day in November, 1852. As required by the decree in that proceeding, Samuel Blair executed his three bonds, with security, with a mortgage of the premises to secure the same, to John L. Miller, who was then commissioner in equity for York district, and his successors in office. These papers are all filed in the office of the commissioner in equity, and all of them were recorded except the mortgage, and have remained continuously in the custody of the said John L. Miller and his successors in office until produced at the hearing of this cause. The deed to the said tract of land, made by John L. Miller, as commissioner in equity, to Samuel Blair, having been executed and delivered of even date with the bonds and mortgage executed by Samuel Blair to the said commissioner, was recorded in the office of the register of mesne conveyance for York district on the 26th August, 1854. This deed contained full recitals of and concerning the judicial proceeding by authority of which it was made and delivered. In the aforesaid proceeding instituted by Robert Gilfillan as guardian it was decreed further, on the recommendation of the commissioner in equity, that the purchase money of the tract of 443 acres of land remain in the hands of the trustee in the character of real estate, and that the petitioner, Gilfillan, be allowed to charge commissions only in the interest on the same in lieu of rents. In 1859, James R. Kennedy married Eliza J. Smith, at that time a ward of the court of equity for York district, who was then in her nineteenth year. On 5th October, 1860, Samuel Blair gave to James R. Kennedy his sealed note, of which the following is a copy: '$8185.49. One day after date I promise to pay to James R. Kennedy or order eight thousand one hundred and eighty-five and 49/100 dollars, for value received. Witness my hand and seal, October 5, 1860. [Signed] Samuel Blair. Seal.' Concerning this transaction both James R. Kennedy and Samuel Blair were examined. They each swore most positively that the transaction was had without authority, knowledge, or sanction of the court, or of its officer, the commissioner in equity, in whose custody the bond and mortgage, the choses of Eliza J. Kennedy, were, and also without the knowledge or consent of Eliza J. Kennedy. The testimony most conclusively shows this, and further, that James R. Kennedy asked for the note as a substitute for the bonds and mortgage in the custody of the court, and that the note was taken for about the amount then due in said bonds; that James R. Kennedy never at any time made application to the court for an order directing its officer to deliver the said choses to him, and that Eliza J. Kennedy never at any time or in any manner waived her equity to a settlement; that Samuel Blair deemed the execution of the note 'a weak act,' and hesitated seriously about doing so, but upon receiving the solemn promise of James R. Kennedy to the effect that he would save and protect the property of Eliza J. Kennedy for her, and act as her agent or trustee, he yielded, and delivered to James R. Kennedy the note above described, the consideration of which was the amount at that time due from Blair to Eliza J. Kennedy on the bonds and mortgage in the custody of the court. James R. Kennedy held this note until 1867, when, on the 13th of February of said year, Samuel Blair confessed judgment on same in favor of James R. Kennedy, and the judgment thus confessed was duly entered, became the first, and of that time the only, judgment against Samuel Blair. Thereafter one W. B. Pratt obtained a judgment for a small amount against Samuel Blair, and, with a knowledge of the said bonds and mortgage, at that time in the custody of the court of equity, levied on the 443 acre tract. The land was sold by the sheriff on sales day in April, 1868, and was bid off by James R. Kennedy for $1,800, which was credited on the judgment which Samuel Blair had confessed to James R. Kennedy. The deed of the sheriff to Kennedy was not, however, recorded until November 4, 1868. Eliza J. Kennedy knew nothing of these transactions between James R. Kennedy and Samuel Blair (except such notice as recording the said deed from the sheriff to James R. Kennedy would give) until about the 1st of January, 1869, when James R. Kennedy for the first time informed her of what had been done, and then declared that he held the land for her, and would act as her agent and trustee, and would collect the rents and profits, and account to her for the same, guarantying that the rents should not, in any event, for any year, fall below $250 per annum. In pursuance of this declaration of trust, and in fulfillment of his promise to account, James R. Kennedy, in or about January, 1873, gave his wife a note for all rents and profits up to that time, and about every four years thereafter he gave a renewal note, including the preceding notes and intervening rents and interest. The last note was given in 1893, for the sum of $2,100, which I find represents all previous notes given for rents and profits collected by James R. Kennedy from the 443-acre tract, together with intervening rents from the date of the execution of the last note, and accrued interest. I find further that this note was executed in fulfillment of the promise made by James R. Kennedy to his wife in 1869, to account to her for all rents and profits he should collect from the tract of 443 acres, which he then declared he held for her in trust. The note was made due and payable in 1899,--six years after date,--simply to dispense with more frequent renewals. In January, 1877, James R. Kennedy, W. M. Kennedy, and W. T. Barron formed the co-partnership known as Kennedy Bros. & Barron. They continued in business until June 2, 1896, when, from inability to make collections and to obtain further extensions from certain of their creditors, they made a deed of assignment. According to the proof, none of the members of the firm believed it to be insolvent on 15th January, 1896, when James R. Kennedy executed the first deed to Eliza J. Kennedy, and the same is true as to the belief of the various members of the firm on 25th January, 1896, when the second deed was executed. W. T. Barron, sworn for the plaintiff, testified that the firm believed it could pay the debts on 15th January, 1896, if the creditors of the firm would grant it extensions. Extensions were not procured by Mr. Barron, who was actually in charge of this particular business, and an assignment was executed on the 2d June, 1896, within about twenty-four hours after such a move on the part of the firm had

...