Barber v. . Buffaloe , 122 N.C. 128 ( 1898 )

This case has been here before and is reported in111 N.C. 206, and in 114 N.C. 228. On 9 December, 1889, J. C. Lassiter made what appears to be a general assignment of all his property to the plaintiff Barber, in trust, apparently to secure and pay all his debts. In this deed of assignment it is provided that Barber, the trustee, shall at once take the property named in the deed into his possession, to sell the same for cash, privately or publicly, and out of the proceeds arising therefrom to first pay the debt of Norman Everett, after the proceeds of other property of Lassiter, mortgaged as a security for the Norman Everett debt, are applied. This mortgaged property has been sold, and it brought $1,000; it was bought by one Biggs, surety (130) on the Norman Everett debt, and uncle of Lassiter's wife. And it is admitted that the Norman Everett debt will absorb the proceeds arising from sales of property in Barber's hands as trustee, after payment of costs, charges, etc. The deed in terms provides that, after the Norman Everett debt is paid, all the assignor's debts shall be paid pro rata, and the debt of Augustus Wright is one of the debts named in the deed of assignment.

It was in testimony that the defendant is a public officer — a township constable; that on Saturday, 7 December, he served two summonses on Lassiter issued in favor of Wright, and these summonses were returnable that day before a justice of the peace, at which time judgments were taken amounting to about the sum of $265; that on the day following (Sunday) Lassiter sent to the town of Scotland Neck for Dunn, an attorney, to draw the deed of assignment; that Scotland Neck is in Halifax County, a distance of 16 miles and across the Roanoke River; that Jackson, the county seat of Northampton County, is only 11 miles; that Dunn went to Lassiter's that night, and Biggs, the surety on the Norman Everett note, went with him, and the deed of assignment was drawn between twelve and one o'clock that night; that this deed was sent to Jackson that night and registered early next morning; that the land mortgaged as security of the Norman Everett debt, for which Biggs was surety, was soon afterwards sold and Biggs became the purchaser at the price of $1,000; that Lassiter has continued to live on this land ever since said sale and purchase by Biggs, without paying rent therefor.

The defendant contended in this Court that it was incumbent on the plaintiff to show on the trial below that the debts secured in the (131) deed of assignment were bona fide, or that he should have shown at least that there were such debts as those named in the deed of assignment, and cited Feimster v. McRorie, 34 N.C. 287, and Hodgesv. Lassiter, 96 N.C. 351, for this position. There was no such position as this taken on the trial below by prayer for instructions or by exception. It is made here for the first time and should not be allowed on that account. Exceptions cannot be made for the first time in this court.Phipps v. Pierce, 94 N.C. 514; Calvert v. Miller, 94 N.C. 600; Rodmanv. Harvey, 102 N.C. 1; Lindsey v. Sanderlin, 104 N.C. 331.

But it could not be sustained if it had been made. The case shows that when Lassiter was on the stand as a witness he was handed a paper, and he said: "The paper handed me is the note I gave to Norman Everett, referred to in the deed to Barber. It was for borrowed money."

It also appeared that the debt of Wright, upon which the judgments were taken and which the defendant sets up and claims as his justification for seizing and taking the property named in the trust and sued for in this action, is a part of Lassiter's indebtedness named in said deed of assignment. These facts appearing on the trial answered the requirements of the law. It is not intended that the debts named in the deed shall be shown by the trustee to be bona fide. This would throw upon him the burden of disproving fraud, which is contrary to the general rule in issues of fraud, as shown by many decisions of this Court. He that alleges fraud must prove it. The assignee has only to show that there were evidences of such indebtedness existing at the time of executing the assignment. Feimster v. McRorie, supra. This was shown by the evidence of debt and judgment under which the (132) defendant claims to justify himself in taking the property, and also, by the testimony of Lassiter when he said "this is the note I gave Norman Everett, named in the deed of assignment. It was for borrowed money."

It has been contended that it was incumbent on Barber, the trustee, to show the existence of all the debts named in the deed, or, at least, that he should do this as to the debts that would be paid in part or in full out of the trust fund. This we do not understand to be the rule. It is only required of the plaintiff to show a consideration to support his legal title. And this is held to be done when he shows the evidence of outstanding debts. It is not necessary that he should show this as to all the debts named in the deed, nor as to any particular debt. Feimster v.McRorie, supra; Hafner v. Irwin, 26 N.C. 529. But if the rule contended for, that he must show the debt or debts that would be paid by a sale of the property conveyed in the deed, obtained, the plaintiff has done this by showing the existence of the Norman Everett note.

The defendant among other things prayed for and asked the following instruction:

"4. That it is not necessary that the trustee Barber should participate in any such alleged fraudulent intent or have knowledge of it. It is sufficient to avoid the deed if Lassiter alone was actuated by such intent."

As this seems to have been a general assignment by Lassiter, an utterly insolvent debtor, for the benefit of his creditors, this was a proper instruction and should have been given, unless there was no such evidence of fraud on the part of Lassiter as should have been (133) submitted to a jury. Woodruff v. Bowles, 104 N.C. on p. 197.

We are of the opinion that there was such evidence of fraud as should have gone to the jury.

Without recapitulating all the evidence bearing upon the issue of fraud, the fact that Biggs, the real party benefited by the deed of the assignment, went with the attorney who drew the deed, across the Roanoke River, a distance of sixteen miles, on Sunday night; that he bought Lassiter's home, mortgaged to secure the debt for which he was surety, and that he has allowed Lassiter to occupy it ever since without rent, taken in connection with the other evidence in the case, are such circumstances, in our opinion, as call for an explanation before a jury. One element of fraud in such cases is benefit to the assignor.

There was error in not giving the defendant's fourth prayer, and also in the Court's directing the verdict of the jury.

New trial.