Southern Comm'n Co v. Porter

• Decision Date: 11 May 1898
• Citation: 122 N.C. 692,30 S.E. 119
• Court: North Carolina Supreme Court
• Parties: SOUTHERN COMMISSION CO. et al. v. PORTER et al.

30 S.E. 119

122 N.C. 692

SOUTHERN COMMISSION CO. et al.

v.PORTER et al.

Supreme Court of North Carolina.

May 11, 1898.

Partnership—Assignment for Creditors—Fraud — Exemptions.

1. An assignment by a surviving partner of an insolvent firm for an indefinite term, the assignee to have the right to employ servants, and to replenish the stock, and out of the proceeds to pay firm debts, and also the individual debts of the survivor pro rata, is a fraud on creditors.

2. A surviving partner, who assigns partnership property of an insolvent firm to pay his own debts pro rata with the firm debts, cannot testify that he did not thereby intend to defraud firm creditors.

3. Where a transaction bears such evidences of fraud that it might property be inferred, it is error to refuse to submit the question to the jury.

4. A surviving partner is not entitled to have his personal property exemptions paid out of assets of the insolvent firm.

5. Where a deed of assignment was made by a surviving partner of an insolvent firm for an indefinite term, empowering the assignee to continue the business, a receiver might be appointed to administer the partnership fund, though the deed was not set aside.

Appeal from superior court, Buncombe county; Timberlake, Judge.

Action by the Southern Commission Company and others against W. Y. Porter and others. There was a judgment for defendants, and plaintiffs appealed. Reversed.

Geo. A. Shuford, Thomas & Wells, Moore & Moore, and Whitson & Keith, for appellants.

Davidson & Jones, for appellees.

FURCHES, J. The defendant Davidson and one Sherrill were partners, doing business as merchants at Swannanoa, in Buncombe county. The partnership became utterly insolvent. Sherrill died, and the defendant Davidson made an assignment of all the partnership effects to the defendant Porter. This assignment was made on the 16th October, 1896, in which it is provided that Porter shall at once take possession of the goods and partnership effects; that he have the right to employ clerks and servants, and to buy and replenish the stock of goods, and out of the proceeds to pay the debts of the firm, and also the individual debts of the defendant Davidson, pro rata with the firm debts, and no time is fixed when this trust Is to be closed. If this does not amount to fraud in law, upon which it was the duty of the court to so declare, and to so instruct the jury, it is so near the line that it is difficult to mark the division. But we see that this assignment is almost a copy of the assignment considered by this court in Stoneburner v. Jeffreys, 116 N. C. 78, 21 S. E. 29, except the provision that the individual debts of the survivor are to be paid pro rata out of the partnership funds, with the partnership debts. This provision does not seem to have been In Stoneburner v. Jeffreys. But for this case, we might have been disposed to hold that there were such evidences of fraud—the right to hire clerks and servants, to buy goods, and pay for them out of partnership effects, for an indefinite period of time—that it was a case where the court should hold and declare It fraudulent and void.

There was other evidence of fraud besides that already noticed, and contained in Stoneburner v. Jeffreys, supra. The assignment requires the assignee, Porter, to pay out of the assets...