Reiger v. Davis

• Decision Date: 30 June 1872
• Citation: 67 N.C. 185
• Court: North Carolina Supreme Court
• Parties: HENY REIGER v. JOHN D. DAVIS et al.

67 N.C. 185

HENY REIGER

v.JOHN D. DAVIS et al.

Supreme Court of North Carolina.

June Term, 1872.

It is a rule of law, that where a debtor, much embarrassed, conveys property of much value to a near realative, and the transaction is secret, and no one present to witness the trade except these near relatives, it must be regarded as fraudulent. But where these relatives are examined as witnesses, and depose to the fairness and bona fides of the contract, and that there was no purpose of secrecy, it then becomes a question for the jury to determine the intent of the parties, and to find the contract fraudulent, or otherwise, as the evidence may satisfy them.

A Judge, in commenting upon the testimony, may, by his manner and emphasis, intimate an opinion upon the facts, and violate the act of 1796. The record, however, must show such peculiarity of manner and emphasis, that the Court may see whether or not the act has been violated.

An absolute conveyance for a valuable consideration is good, notwithstanding the intent of the maker to defraud, if the grantee was not a party to such fraud, and bought without any knowledge of the corrupt intent.

[ Satterwhite v. Hlcks, Busb. 105. State v. Simmons, 6 Jones 21. Derries v. Haywood, 63 N. C. 53, and Lassiter v. Davis, 64 N. C. 498, cited and approved.]

Civil action tried before Clarke, J., at Spring Term, 1871, of CARTERET Superior Court.

The action was brought to recover possession of a lot in the town of Beaufort. Both parties claimed under Abigail Hill; the plaintiff under a judgment and execution against Abigail Hill and a sale by the sheriff in May, 1869; the defendant, Ward, under a purchase from the said Abigail Hill, prior to the teste of plaintiff's execution, his deed bearing date November 1st. 1865.

Plaintiff introduced the record of a judgment, at Fall Term, 1867, of Carteret Court against Abigail Hill and C. W. Hill, which was founded on a note given in 1856. Upon this judgment executions were issued, the last of which was a ven. ex. from Fall Term, 1868, under which the sheriff sold. The plaintiff, to show the indebtedness of Abigail Hill, introduced the record of other judgments against her, some of them upon claims due before the date of defendants' deed. He also introduced evidence tending to show the insolvency of the said Abigail Hill after her conveyance to the defendant Ward. It was in evidence that the defendant Ward was a nephew of Mrs. Hill, and that the consideration of the deed was a note of $2,000, principal and interest given by Mrs. Hill to her son C. W. Hill and which had been purchased by Ward for the sum of $1,300, the face of the note. Evidence was also introduced tending to show that Ward had very little property, that he was a young man who had been in the Confederate army until the surrender, and that during the year 1865 he lived with Mrs. Hill, and was not engaged in any particular business. It was also proved by a witness that he was the agent of Mrs. Hill to rent her lots in Beaufort, from the Fall of 1865 until the fall of 1868, and the first information he had of the sale was from a letter dated in April 1867.

The defendant Ward was examined as a witness. He testified, that he bought the lot in dispute from Mrs. Hill for $2,000. The payment was made in a note due from her to her son C. W. Hill for $1,300, given in 1866. He purchased this note for $1,300, and paid for the same five hundred dollars in cash and the remainder in a note given by himself for $800. This purchase was made in October 1865. The deed was written by C. W. Hill and delivered at Mrs. Hill's house a few days after it was written. It was kept by witness until its registration in September 1868. Witness had no special business in 1865, and lived with C. W. Hill and Mrs. Hill his mother. He worked for the five hundred dollars.

He further testified, that he claimed the property from and after the execution of the deed to him in November, 1865, and that the note was given to C. W. Hill by his mother in settlement of her guardian account.

C. W. Hill was examined as a witness and testified, that there was no secrecy in the transaction between his mother and defendant Ward, and that the trade was known to the neighbors. The note of $1,300 was given to him by his mother, for the consideration which had been stated by Ward. He was paid as Ward had testified, and used the $800 note in payment of debts. Witness sold the note to raise money which he needed at the time. He wrote the deed and witnessed it with two others.

There was evidence as to the value of the property, varying from two thousand to three thousand dollars.

His Honor charged the jury, that fraud vitiates every transaction into which it enters, and affects all who are cognizant of it. The part for the jury to determine is, was the conveyance from Mrs. Hill to Ward, dated November 1st, 1865, executed for the purpose of defrauding the plaintiff, a creditor of Mrs. Hill, or all of her creditors? If so, the deed is void.

If Mrs. Hill and her son C. W. Hill conspired to cover up her property to defraud her creditors, Ward must be proved to have known it, or circumstances must be shown which would have conveyed such information to a man of ordinary prudence and intelligence.

A voluntary conveyance of property without consideration by one in insolvent circumstances would be prima facie fraudulent. But a man in failing circumstances may prefer one creditor to another. Mrs. Hill may lawfully prefer her son to other creditors, but such transactions are viewed with suspicion. A badge of fraud is secrecy. How was it in this case? Ward and Hill say there was no secrecy, and, in addition, there were other witnesses to the deed. If the vendor remains in possession, it is not indication of fraud if such possession is consistent with the deed; but continuing in possession with gross inadequacy of price is a badge of fraud. Does the evidence satisfy that Mrs. Hill was insolvent in 1865? Her...