22 S.E. 2 | N.C. | 1895
The exceptions to the judge's remarks to the jury are without merit. Almost the same expressions were used in Osborne v. Wilkes,
But if the testimony offered for the plaintiffs was believed by the jury, there were a number of badges of fraud which can scarcely be accurately described except by so denominating them, though they are sometimes designated as circumstances calculated to excite suspicion and challenge scrutiny in order to ascertain whether a conveyance was executed with fraudulent intent. Among the evidences of fraud relied *403 upon by the plaintiffs were the following: 1. That Gilmer owed a debt when he sold the goods; 2. That he sold on credit of 6, 12, 18 and 24 months; 3. That the purchaser was not worth over $500; 4. The purchaser gave his note without security; 5. Gilmer was embarrassed with debt; 6. Though not then insolvent, his embarrassment soon after resulted in insolvency; 7. The sale was to a son.
In Beasley v. Bray,
If the conveyance to the son by an embarrassed father had been made, when only mere relatives were present, and explanation (703) had been withheld, these circumstances would have raised a presumption which could be rebutted in no other way than by a full disclosure. Helms v. Green,
Had the conveyance been made by an insolvent husband to his wife, the burden would have rested upon those who claimed under it to rebut the presumption of fraud raised by those circumstances. Peeler v. Peeler,
This Court has recently held that mere inadequacy of price, however gross and whether considered alone or in connection with other suspicious badges, was only a circumstance tending to prove fraud. Berry v. Hall,
In Stoneberger v. Jeffreys, ante, 78, the Court has held that (704) "the burden of proof is sometimes shifted in the progress of the trial, but it is only by the introduction of testimony which the law has declared to be prima facie proof of fraud, but which may be rebutted by evidence deemed by the jury sufficient to explain such suspicious circumstances, and thereby overcome the artificial weight which the law has attached to them, as evidence. McLeod v. Bullard,
But I can imagine nothing that could introduce greater uncertainty into the law than the proposition that some indefinite combinations of the hundreds of circumstances which are deemed sufficient to throw suspicion upon a business transaction, will hereafter be held to raise a presumption of fraud. In the case at bar, we have eight suspicious circumstances grouped together, and it is proposed to declare them sufficient, as a rule of evidence, to amount to prima facie proof of fraud. Suppose we take these eight badges of fraud and a dozen additional ones, making twenty in all, that have never been heretofore held to be more than suspicious circumstances challenging scrutiny by the jury, and see how many hundreds of different combinations (705) may be made and presented to this Court, and we will be able to form some faint conception of the sea of uncertainty upon which we would embark, were we to make such a vague application of the abstract proposition referred to.
Upon the testimony tending to prove all these suspicious circumstances, however, the duty devolved upon the court, in view of the request made by counsel, to speak of them, not as evidential facts bearing upon the issue, but as badges of fraud to be considered by the jury in passing upon the issue involving the fraud. The prayers in which the plaintiffs asked the court to tell the jury that certain *405 evidence, if believed, raised a presumption of a fraudulent intent in the execution of the deed were properly refused by the court, but they demanded, in lieu of what was asked, some more specific instruction to the jury in order to enable them to comprehend the bearing of the circumstances proved, upon the findings. Parties who seek to set aside deeds are required not only to allege the existence of facts which constitute fraud, but to prove what they allege. Where a plaintiff charges the fraud according to the prescribed practice, and an issue, involving it, is framed and submitted, he has a right to insist that circumstances, which his testimony tends to prove and which the law denominates badges of fraud, shall be so called, and that scrutiny upon the part of the jury shall be invited by bestowing upon them their proper designation. Whenever a charge is excepted to, and it appears to the Court that it was calculated to mislead instead of enlightening the jury, a new trial should be granted. It would have necessitated the presence of a jury of lawyers in the box in order to comprehend fully what was the fact in issue, and the evidential facts tending to support the affirmative or the negative view of the proposition, because the language was technical. Such philosophical discussions (706) are addressed, in opinions of courts, to the bar, but instructions to juries are intended, in contemplation of law, to enable men of fair intelligence but without any technical learning to apply the law to the evidence. The portion of the instruction which we think amenable to the charge that it was not responsive to the requests and was calculated to mislead the jury, is as follows: "In a case of circumstantial evidence there are two inquiries for the jury, First, the evidential facts, that is, the facts relevant to the issue — are they true? Second, do you infer from such facts that the fact in issue exists? For example, in regard to the 6th issue, the fact in issue (alleged by plaintiffs and denied by defendants) is, that the goods were sold on 1 July, 1893, by J. E. Gilmer to John L. Gilmer, with intent to defeat or to hinder, or to delay the creditors of J. E. Gilmer or some one or more of them; or, putting this in other words, that his purpose or some part of his purpose in making this sale was to promote his own ease and favor, at the expense of, or to the prejudice of the rights of his creditors. The evidential facts on which the plaintiffs rely and which the defendants do not contradict, are the following." Then follows the judge's enumeration of the circumstances already mentioned, which counsel had insisted either established or raised a presumption of the fraud, but which the court nowhere calls by the comprehensible designation of badges of fraud, or circumstances tending to show fraud, or that call for scrutiny in the consideration of their findings in *406 response to the particular issue. When the plaintiffs took the burden, which the law imposes, of proving the fraud alleged, the court, having refused the instruction that the testimony in any aspect raised a presumption of fraud, should have told the jury, in language calculated to be understood by laymen, the nature and the bearing of the evidence relied upon by the plaintiffs to establish the (707) affirmative of the issue.
It was error in lieu thereof to recite these admitted facts and the explanatory evidence offered by the defendants and merely instruct the jury, "The question is whether these facts are true and then whether from the whole evidence you infer the existence or non-existence of the fact in issue, remembering that on the whole case the burden of proof is on the plaintiffs." Nowhere in the charge is there an instruction that any of the facts proven or admitted was a badge of fraud and that evidence explanatory of such badge "must be scrutinized with care."
Laws 1893, ch. 453, does not prohibit bona fide mortgages to secure one or more preexisting debts, but when as here, a mortgage is made of the entirety of a large estate for a preexisting debt, omitting only an insignificant remnant of property, such mortgage is in effect an assignment for the benefit of the creditors secured therein. To hold otherwise would be in effect to nullify the act. The court erred therefore, after the grantor's admission of the above fact, in refusing to grant the plaintiffs' motion to declare the deed of trust void as inconsistent with the Act of 1893 regulating assignments and deeds of trust, and void on the admitted fact that the grantor had not complied with the said act.
Chapter 453, Laws 1893, is not a mere recommendation from the Legislature to insolvents as to the form of assignments and proceedings thereunder, but in its very nature the act is imperative. If not complied with by the assignor by filing schedule as required, the assignment is invalid. The fact that the failure to observe any of its provisions makes the assignee indictable, of itself indicates that the requirements of the act are mandatory. The assignor is not indictable.
The assignment is simply invalid if he did not follow the act. (708) No authority is necessary for this proposition, but there are precedents to support it. Julian v. Rathbone,
New Trial. *407
Cited: Frank v. Heiner,