Unaka and City Nat. Bank of Johnson City, Tenn. v. Lewis

• Decision Date: 27 June 1931
• Citation: 159 S.E. 312,201 N.C. 148
• Parties: UNAKA AND CITY NAT. BANK OF JOHNSON CITY, TENN., et al. v. LEWIS et ux.
• Court: North Carolina Supreme Court

159 S.E. 312

201 N.C. 148

UNAKA AND CITY NAT. BANK OF JOHNSON CITY, TENN., et al. v. LEWIS et ux.

Supreme Court of North Carolina

June 27, 1931

Appeal from Superior Court, Watauga County; C. C. Lyon, Emergency Judge.

Action by the Unaka and City National Bank of Johnson City, Tenn and another, against John P. Lewis and wife. From the judgment, plaintiffs appeal.

No error.

Issues submitted, in substance, whether defendant executed deed to wife to defraud and hinder or delay creditors held proper.

The following judgment was rendered by the court below:

"This cause coming on to be heard before His Honor, C. C. Lyon Judge Presiding, and a jury, and the following issues having been submitted to the jury and answered as follows:

"'Is the defendant, John P. Lewis, indebted to the plaintiff, Unaka and City National Bank of Johnson City, Tenn., and if so, in what amount? Ans. $16,275.00 with interest.

"'2. Is the defendant, John P. Lewis, indebted to the plaintiff First National Bank of Bristol, and if so, in what amount? Ans. $5,000.00 with interest.

"'3. Did the defendant, John P. Lewis, execute the deed of October 25, 1926, to his wife, Madge M. Lewis, with the purpose and intent to cheat and defraud and hinder or delay his creditors in the collection of their debts? Ans. No.

"'4. Is the feme defendant, Madge M. Lewis, the owner of the personal property or any part thereof that is in dispute, seized by the sheriff of Watauga County under the warrant of attachment in his hand in this cause, viz; two diamond solitaire rings, one cluster diamond ring, one diamond stick pin, one diamond dinner ring, one watch and chain, one breast pin, the Major Donnelly horse and the Chrysler automobile, and if so, what part? Ans. 1913 and 1914 rings to Mrs. Lewis, remainder a personal property to plaintiffs.'

"Plaintiffs moved to set aside the verdict on the third issue and moved the Court on the pleadings and evidence to answer the third issue 'Yes,' which motion is denied and overruled and plaintiffs except.

"The defendants and especially the feme defendant, Madge M. Lewis, move to set aside the verdict on the 4th issue, which motion is denied and overruled and the defendants and especially the defendant Madge M. Lewis excepts; whereupon the Court renders the following judgment:

"It is considered, ordered and adjudged that the plaintiff Unaka and City National Bank of Johnson City, Tenn., recover of the defendant, John P. Lewis, the sum of $16,275.00, together with interest on the component parts of said sum as follows: to-wit: Interest on $5000.00 from August 24, 1929, and interest on $4000.00 from August 21, 1929, and interest on $7275.00 from August 26th, 1929.

"It is further ordered, considered and adjudged that the plaintiff, First National Bank of Bristol, Tenn., recover of the defendant, John P. Lewis, the sum of $5000.00, together with interest thereon from August 12, 1929.

"It is further considered, ordered and adjudged that the defendant, Madge M. Lewis, is the owner in fee and entitled to the possession of the property described in the deed from John P. Lewis to Madge M. Lewis dated October 25, 1926, and registered in the office of the Register of Deeds of Watauga County, in Book 36, pages 92 and 93, and known as the Blowing Rock property.

"It is further considered, ordered and adjudged that the defendant, Madge M. Lewis, is the owner of and entitled to the possession of the diamond rings given her by her husband in the years 1913 and 1914 and thus labeled.

"It is considered, ordered and adjudged that the defendant, John P. Lewis, is and was at the time of the issuing of the warrant of attachment the owner of all the other personal property levied upon, by the sheriff under and by virtue of said warrant of attachment in this cause, to-wit, the Chrysler automobile, the two horses and all the remainder of the jewelry, including one watch and chain, one breast pin, one cluster diamond ring, one diamond stick pin and all the other jewelry levied upon by the officer in this cause other than the two rings labeled 1913 and 1914, and this judgment is declared a specific lien upon said personal property and that execution be issued to the sheriff or other lawful officer commanding him that out of said personal property levied upon he satisfy the judgment aforesaid or so much thereof as the proceeds of the sale of said personal property, after deducting the cost of this action will satisfy, and that the proceeds of said sale, after deducting the costs of this suit be applied to the discharge of the plaintiffs' judgment in this cause pro rata.

"C. C. Lyon, Judge Presiding."

Both the plaintiffs and defendants gave notice of appeal to the Supreme Court. Defendants did not perfect their appeal, so the appeal of plaintiffs is alone to be considered. Numerous exceptions and assignments of error were made by plaintiffs, the material ones and necessary evidence will be considered in the opinion.

Cox, Taylor & Epps, of Johnson City, Tenn., Bingham, Linney & Bingham, of Boone, T. C. Bowie, of Jefferson, and John E. Brown, of Boone, for appellants.

W. C. Newland, of Lenoir, and S. J. Ervin and S. J. Ervin, Jr., both of Morganton, for appellees.

CLARKSON J.

We see nothing in plaintiffs' contention that there was error in the ruling of the court below in refusing to require Madge M. Lewis to give interpleader bond. C. S. § § 829, 840.

C. S. § 840, is in part, as follows: "When the property taken by the sheriff is claimed by any person other than the plaintiff or defendant the claimant may interplead upon filing an affidavit of his title and right to the possession of the property," etc.

Madge M. Lewis was a defendant in the action, made so by plaintiffs. The complaint of plaintiffs commenced "The plaintiffs, complaining of the defendants, allege and say." She had a right in her answer to set up her ownership to the Blowing Rock property, and certain personal property. She was a necessary party for a complete determination of the action. C. S. § 456; Moorefield v. Roseman, 198 N.C. 805, 153 S.E. 399.

The defendants did not perfect their appeal in reference to the finding of the jury on the fourth issue. The main controversy, therefore, is over the third issue, which, we think, enabled the parties to present every phase of the contention.

In Hooper v. Trust Co., 190 N.C. at page 428, 130 S.E. 49, 52: "The test of the sufficiency of issues is, 'Did the issues afford the parties opportunity to introduce all pertinent evidence and apply it fairly?" D' Erskine v. Motor Co., 187 N.C. at page 831, 832, 123 S.E. 193. The plaintiffs tendered other issues. The exception and assignments as to the issues submitted cannot be sustained.

The third issue: "Did the defendant, John P. Lewis, execute the deed of October 25, 1926, to his wife, Madge M. Lewis, with the purpose and intent to cheat and defraud and hinder or delay his creditors in the collection of their debts?" This issue was answered "No" by the jury.

Is there any error on the record in reference to this issue and the answer thereto? We think not.

The real battle was waged over the deed made by John P. Lewis to his wife Madge M. Lewis, dated October 25, 1926, to the "Blowing Rock" property.

The deed recited: "Witnesseth, that for and in consideration of One Dollar cash in hand paid, receipt of which is hereby acknowledged, and love and affection."

C. S. § 1005--conveyance with intent to defraud creditors void. C. S. § 1007, is as follows: "No voluntary gift or settlement of property by one indebted shall be deemed or taken to be void in law, as to creditors of the donor or settler prior to such gift or settlement, by reason merely of such indebtedness, if property, at the time of making such gift or settlement, fully sufficient and available for the satisfaction of his then creditors, be retained by such donor or settler; but the indebtedness of the donor or settler at such time shall be held and taken, as well with respect to creditors prior as creditors subsequent to such gift or settlement, to be evidence only from which an intent to delay, hinder or defraud creditors may be inferred; and in any trial shall, as such, be submitted by the court to the jury, with such observations as may be right and proper."

In Shuford v. Cook, 169 N.C. at page 55, 85 S.E. 142, 143, the following is said: "The plaintiff earnestly pressed this exception, but the act of 1840, now Revisal, § 962 [C. S. § 1007], provides that the court, where there is any evidence tending to show that at the time of the alleged fraudulent conveyance the grantor retained property fully sufficient and available for the satisfaction of his then creditors, shall submit the question to a jury 'with such observations as may be right and proper.' The presumption formerly arising from a voluntary conveyance made by a party indebted is thus removed, and the indebtedness in such case is to be taken and held, in the language of Revisal,§ 962 [C. S. § 1007], 'to be evidence only from which an intent to delay, hinder or defraud creditors may be inferred.' Hobbs v. Cashwell, 152 N.C. 183, 67 S.E. 495." Beasley v. Bray, 98 N.C. 266, 3 S.E. 497.

"In Garland v. Arrowood, 177 N.C. at page 374, 99 S.E. 102, it is said: "The jury have found that there was no actual intent to defraud or, in other words, no mala mens, but if the defendant, the donor of the gift, failed to retain property fully sufficient and available for the satisfaction of his then creditors, the gift was void in law, without regard to the intent with which it was made. Black v Sanders, 46 N.C. 67; Aman v. Walker, 165 N.C. 224, 81 S.E. 162; Michael v. Moore, 157 N.C. 462, 73 S.E. 104. The burden of at least going forward with...