Voorhees, Miller & Co. v. Blanton

• Decision Date: 02 November 1897
• Citation: 83 F. 234
• Court: U.S. District Court — Western District of North Carolina
• Parties: VOORHEES, MILLER & CO. v. BLANTON et al.

83 F. 234

VOORHEES, MILLER & CO. v. BLANTON et al.

United States Circuit Court, W.D. North Carolina.

November 2, 1897

Merrimon & Merrimon, for plaintiffs.

P. J Sinclair and Ed. Justice, for defendants.

BRAWLEY District Judge.

This is a bill to set aside certain conveyances as fraudulent. The plaintiffs are merchants in Cincinnati, Ohio, who sold a bill of goods to C. D. Blanton & Co., merchants doing business at Asheville, N.C., and the defendant William M. Blanton, with others, guarantied the payment of the same. William M Blanton was a farmer residing in McDowell county on what is hereinafter called 'South Muddy Creek Farm,' in McDowell county, N.C., until about the year 1878, when he moved to the town of Marion, in the same state, where he engaged in merchandizing, and is now about 65 years of age. He became a partner with his son Charles, who was doing business at Asheville under the name of C. D. Blanton & Co. Some time before the transactions hereinafter related he gave his interest in that business to a younger son, Josephus, but there was no publication of his withdrawal from that firm until after the accrual of the indebtedness which is the subject of this controversy. Charles D. Blanton became greatly involved in debt outside of his mercantile obligations, and his father was surety for a considerable amount. In December, 1892, Charles D. Blanton sold the stock of goods of C. D. Blanton & Co. in Asheville to J. D. Brevard for $16,000 under a bill of sale which provided that the proceeds should be applied to the payment of certain debts of C. D. Blanton & Co. While a controversy subsequently arose, and it was disputed whether the debt to the plaintiffs was among those provided for in this bill of sale, I am satisfied from the testimony that William M Blanton at the time believed that it was so provided for, and that he believed that the amount of $16,000, the purchase price of the stock of goods, was ample to pay all of the debts of C. D. Blanton & Co. for which he was liable as indorser or guarantor. Subsequent events have demonstrated that he was mistaken in this conclusion. The debt of the plaintiffs remains unpaid, the property of William M. Blanton has been disposed of, and this suit is for the purpose of inquiry into such disposition of it, and to set aside all of the conveyances as fraudulent. While it might be that a court would feel itself compelled to set aside conveyances as in fraud of creditors, although there was no intention at the time to defraud a particular creditor, it cannot in fairness determine the character of a series of transactions without inquiry into the motive which impelled them, and entering as far as may be into the state of mind of the chief actor therein.

I find sufficient testimony to support the conclusion that at the time when William M. Blanton commenced to dispose of his property in the manner to be hereinafter specifically considered he was of the opinion, founded upon what to him was sufficient ground for the belief, that the plaintiff's debt was already provided for; and it may be as well to say, further, that no statute of the state of North Carolina has been cited forbidding preferences among creditors, and these conveyances are not contested on that ground. Here, then, we have an old man who finds himself in his declining years involved as surety for his son's indebtedness, which had already absorbed part of his fortune, and which was sufficient to sweep away all of his property. On the part of the plaintiffs it is contended that, confronted by these conditions, he straightway devised and executed such disposition of it as would secure for himself such ease and comfort as could be provided, and it must be admitted that the temptation so to do was sore, and such as human experience teaches us is often sufficient to swerve good men from the straight and narrow way. On the part of the defendant, it is contended that having led a life of industry and integrity, which had secured for him the respect and confidence of his fellows, his first and controlling thought was so to dispose of the remnant of his property as to pay all of his debts upon the best terms that he could secure, and thus become a free man again, maintaining his own self-respect and that of his fellowmen. The great searcher of hearts alone can know with absolute certainty which theory is right,-- that of the plaintiffs or that of the defendant. Without that guidance, and with such lights as circumstances afford, we will consider these conveyances each in its order.

1. Among the debts due by Charles D. Blanton was a note for $4.500, dated December 14, 1892, to the National Bank of Asheville, on which William M. Blanton was indorser. After negotiations, complicated with details fully set forth in the testimony, with which it is unnecessary to cumber this opinion, this note was liquidated by the conveyance of the South Muddy Creek farm. This farm, upon which William M. Blanton lived prior to his removal to Marion, was made up of several tracts of land, the first of which was bought in 1859 or 1860. Inasmuch as the decision on this branch of the case turns upon it, the testimony relating to the purchase will be given as it appears in the record:

'Q. Where did you get the money that paid for the farm? A. I furnished some myself, and my wife furnished some of it. Q. How much did your wife furnish? A. I think a little over $400 at the time, in 1860. In 1869 she furnished $600. In 1884 or 1885 she furnished $200. Q. Where did she get that money? A. From her father, David Setzer. Q. What did he give her that money for? A. To help me buy that land. Q. Who were you to buy it for with the money you got from him? A. It was his and her understanding and mine that I was to buy it for her.'

There was testimony that some of the later purchases were of more value than the earlier, and also testimony going to show that David Setzer had furnished some money as he had done for another daughter, and also testimony that the wife had always claimed an interest in the land, and the defendant Blanton claimed that that interest amounted to one-half interest, and in consideration of the surrender of that half interest in liquidation of the debt to the bank he conveyed to her the lot and house in which he lived in the town of Marion. There is testimony tending to show that the house and lot in the town of Marion was of greater value than that set upon it by the defendants, but the preponderance of testimony is that the house and lot in Marion was not worth more than the one-half interest in the South Muddy Creek farm. The conveyance of the house and lot in Marion is one of those sought to be set aside, and the question for decision is whether the claim of the wife to one-half interest in the farm lands is a valuable consideration, sufficient to support the deed. Assuming, as the testimony fairly warrants, that the one-half interest in the farm was about equal in value to the house and lot, the case will be considered as if it were a proceeding to set up an interest in the farm lands in behalf of the wife, and must be determined in accordance with the laws of North Carolina. A part of the money claimed to have been invested in lands for her benefit was invested prior to the adoption of the constitution of that state, in 1868, which provides, in article 10, Sec. 6, that 'real and personal property of any female in this state acquired before marriage and all property real and personal to which she may, after marriage, become in any manner entitled, shall be and remain the sole and separate estate and property of such female. ' Chief Justice Merrimon in Walker v. Long, 109 N.C. 513, S.E. 300, citing this provision and the pertinent legislation in harmony with it, says:

'As to her separate property, however acquired, she and her husband are, as to property rights and estates, not to be recognized and treated in legal contemplation as one person. She is an unmarried woman; it is so expressly provided.'

As to so much of the money as was laid out in land subsequent to the adoption of this constitution, the case presents no difficulty, and the testimony shows that the Higgins tract bought in September, 1869, for $1,200, of which amount the wife furnished $600, was worth as much as the remainder of the farm. By the law of North Carolina, prior to the adoption of the constitution of 1868, the husband-- jus mariti-- became entitled to all of the personal property of the wife which came into his possession; not so as to real estate or the proceeds of real estate. The testimony of Blanton is that the money which David Setzer gave to his daughter in 1860 was to be invested in land for her benefit, and that it was so invested. If so, the...