Gorrell v. . Alspaugh , 122 N.C. 560 ( 1898 )

[For Syllabus see 120 N.C. 362.] This is a rehearing of the case heard here at February Term, 1897, and reported in 120 N.C. 362. Few cases that have come before this Court have received more careful consideration, not only on account of the important and interesting principles involved, but from the exhaustive argument and reargument of learned counsel and the very able dissenting opinion. In adhering to our judgment, it is unnecessary to go over again the same line of argument that brought us to our former conclusion, or to review the large number of authorities cited on either side. Many of the principles so strenuously urged by the plaintiffs will be unhesitatingly admitted, and the long line of eminent authorities would be conclusive did they apply to what we believe to be the essential facts in the case. At the outset we are met with the solemn admission of the plaintiffs that there was no actual fraud. There could have been no intent to defraud creditors in the inception of the transaction, because there were then no creditors to defraud. If there is any fraud, (561) it is purely one of construction, springing from the conscience of the court, and in this case we are asked to construe as fraudulent as to creditors, then neither in being nor in contemplation, a deed admittedly good between the parties, and on the faith of which the defendant Hines has paid the full value of the land. The deed from Alspaugh as administrator to Hines cannot be treated purely as a mortgage. Even to effectuate the contention of the plaintiffs it must operate as a deed in fee simple to take out of Norwood's heirs the full legal and equitable estate in the land conveyed. This deed was not void in its inception, certainly not as to these creditors who had no existence. At best it was only voidable by the heirs of Norwood, and conveyed to Hines the legal title which would vest in him until divested by proper conveyance or legal proceedings. Highsmith v. Whitehurst, 120 N.C. 123. It might be that if there had been an actual fraudulent intent a court of equity might construe Hines into a trustee for the creditors of Alspaugh, but this question is not now before us, as it is admitted there was no actual fraud.

In the argument the plaintiffs lay great stress upon the leading case of Halcombe v. Ray, 23 N.C. 340, the well-settled doctrine of which we have no inclination to dispute, but which has no application here. In that case, Bailey, the former owner, did not convey to Ray, but conveyed to Tredway, who executed to Ray the deed construed to be a mortgage, and which was in fact intended simply as a security. This deed was attacked by Tredway's creditors as being void to them, and upon its defeasance the land would have reverted to Tredway, the mortgagor, and have been liable for his debts. It was not necessary that the (562) deed should operate as a conveyance in fee simple as well as a mortgage in order to bring the land within reach of Tredway's creditors, and when declared void it was set aside entirely as to them. In the case at bar it is sought to give the deed of Alspaugh, as administrator, to Hines the double effect produced by the deeds of Bailey to Tredway and Tredway to Ray combined. In other words, the deed now attacked must operate as a deed in fee from Norwood's administrator to Hines and as a mortgage from Alspaugh personally to Hines. This we think clearly distinguishes this case from that of Halcombe v. Ray and the line of decisions based thereon. The case of Thorpe v. Ricks, 21 N.C. 613, was in actual fraud of creditors, and, moreover, was tainted with usury. We see no error in our former judgment and must deny the petition to rehear.

Petition denied.