Action of Claim and Delivery — Fraudulent Conveyance — Burden of Proof — Bill of Sale — Subsequent Insertion of Other Property Without Noted Change of Consideration — Conveyance as Security — Erroneous Rejection of Testimony Cured by Admission of Fact Intended to be Proved — Instructions.
1. In the trial of an action of claim and delivery of personal property, in which defendant alleges that the bill of sale under which plaintiff claims is fraudulent, the burden is upon the defendant to prove the fraud, unless the instrument is fraudulent upon its face or enough appears therein to raise a presumption of fraud, and a finding by the jury that such bill of sale is not fraudulent will not be disturbed unless based on improper evidence or erroneous instructions.
2. The erroneous rejection of testimony on a trial is cured by a subsequent admission of the fact attempted to be proved thereby.
3. Where, in the trial of an action of claim and delivery of personal property, to which the defense was that the bill of sale under which plaintiffs claimed was fraudulent, it appeared that the grantor, after executing the bill of sale for certain property upon a recited consideration of $4,000, the estimated value of the property, agreed to include other property if the grantees would assume and pay other debts of his for which they were sureties, and did subsequently insert such other property in the instrument without changing the recited consideration: Held, that it was not error to refuse an instruction that, if plaintiffs and the grantor in the bill of sale agreed on a consideration of $4,000 for the transfer of certain personal property, and subsequently other property was inserted in the bill of sale without change of consideration, the instrument was fraudulent.
4. An insolvent debtor may, in good faith, pay one or more of his creditors, though nothing remains for his other creditors.
5. Although an insolvent debtor, in selling his property to a creditor in payment of a debt, may have the intent to secure a benefit to himself, or to hinder, delay or defraud his other creditors, the transaction will be upheld if the creditor who is paid does not participate in or know of the debtor's fraudulent purpose.
6. The refusal to give an instruction not warranted by the testimony is not error.
FURCHES, J.
This is an action for the possession of personal property, and comes to this Court on the appeal of defendant. Plaintiffs claimed title under a bill of sale bearing date 15 August, 1893, which defendant alleged was fraudulent, as to creditors under whom he claimed, being intended to hinder and delay the creditors of L. F. Ross from collecting their debts. And further, that this transaction between L. F. Ross and the plaintiffs was not an absolute sale, but in fact an assignment to secure plaintiffs as his sureties, and was, therefore, a fraud on the registration law, and void on that account.
It is not contended by the defendant that the bill of sale contains such evidence of fraud on its face that it was the duty of the court to declare it void, as a matter of law. Nor is it contended that sufficient appears on its face to create a presumption of fraud, which must be rebutted by the plaintiffs. Cheatham v. Hawkins, 76 N.C. 335; S. c., 80 N.C. 161; Booth v. Carstarphen, 107 N.C. 395; Cowan v. Phillips, ante, 26. This being so, it devolved on the defendant to establish (172) the fraud. And this was a question of fact for the jury and the jury has passed upon it, and found there was no fraud. This ends the case, unless this finding was based upon improper evidence, or erroneous instructions from the Court.
There is but one exception to evidence assigned as error, and that is that the defendant was not allowed to prove that "Ross told witness (Newell) that he was insolvent." This exception was virtually abandoned on the argument, and it was admitted on the trial that he was insolvent. So we see no ground upon which it should be sustained.
The defendant's only other exception is that the Court declined to give his 5th and 7th prayers for instruction, which are as follows:
"5. If the jury shall find as a fact that the plaintiffs and L. F. Ross agreed upon the sum of $4,000 as the consideration for the transfer of the buggies, carts, wagon and harness, and that subsequently other property, mules and wagons and harness, and hosiery mill stock and notes, were inserted in the bill of sale without change of consideration, such insertion of property being without consideration was fraudulent, and hence the plaintiff would not be entitled to recover."
"7. The plaintiffs having testified that the hosiery mill stock was inserted in the bill of sale as a security, the same was fraudulent, and the jury will answer the first issue `No.'"
This case discloses the fact that the plaintiffs, Ferree and R. R. Ross, were the sureties of L. F. Ross for considerable amounts, over and above $4,000, the estimated value of the property L. F. Ross at first agreed to sell them; that he afterwards agreed with the plaintiffs that, if they would agree to pay other debts for which they were his sureties, and to assume a liability of his to one Gwynn, he would sell them other (173) property, which was then inserted in the bill of sale. The evidence in the case tends to establish this state of facts, and in our opinion justified the Court in declining to give the defendant's fifth prayer.
We fail to find that the seventh prayer is sustained in fact. There may be sufficient evidence for the defendant to argue that the hosiery mill stock was inserted as a security. But we do not find that the plaintiffs testified that it was. This being so, the defendant's exception to the Court's refusing to give this prayer must fail.
Whatever might be our opinion if we were sitting as a jury, we find no error of law committed by the Court on the trial. The defendant's prayers for instruction, and the judge's charge, (which the reporter will set out in full), show that the defendant has no cause to complain of the Court in this trial. Failing to find error, the judgment is
AFFIRMED.
Cited: McBrayer v. Haynes, 132 N.C. 611.
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