29 S.C. 395 | S.C. | 1888
The opinion of the court was delivered by
The plaintiffs severally recovered judgments against the defendant, C. A. Cobb, at the June term of the court at Abbeville (1886), the first named for $126, on a debt contracted in September, 1884, by Cobb & Richey, the senior member being C. A. Cobb, and the latter (Bieman) for $205.05, on a debt contracted in November, 1885, by Cobb & McHugh,
This action was then brought by the judgment creditors, to set aside and have declared void, as against his creditors, a deed of gift of a certain store house and lot in the town of Greenwood, claimed to have been made by the said C. A. Cobb to his sister, Emma T. Cobb (now Turner), on August 11, 1883. The complaint alleged that the said Cobb purchased the said house and lot from Dr. Maxwell, paid for the same with his own money, and had the titles made to himself “for Emma T. Cobb,” with intent to hinder, delay, and defraud the plaintiffs in the collection of their debts; that the deed was never recorded, but that the said O. A. Cobb held the property out to the world as his own, returned it for taxation in his own name, and used it in all respects as his own, and received credit on the faith of the property; and prayed that the store house and lot be adjudged to be the property of .the defendant, Cobb, and subject to the payment of his debts; and that the declaration in favor of the defendant, Emma T. Turner, be declared void as to the creditors of the said Charles A. Cobb, and for general relief. The defendants pleaded a general denial as to the alleged fraud in the declaration in favor of the sister, Emma T. Cobb.
It appeared that Dr. John C. Maxwell had previously given a mortgage of the house and lot to Professor Judson, treasurer of Furman University, to secure a debt; that Maxwell, the mortgagor, negotiated a sale of it for $2,500 to O. A. Cobb, who paid the mortgage debt and a balance to Dr. Maxwell, who, by the direction of Cobb, made a conveyance “to C. A. Cobb for Miss Emma T. Cobb.” There was on the mortgage a receipt for the money, and an endorsement by treasurer Judson, purporting to assign it to C. A. Cobb “for Miss Emma T. Cobb.” There was testimony as to the relations between C. A. Cobb and his sister, and as to their conduct in regard to the house and lot. The master found as follows: “It is admitted that the money paid by C. A. Cobb was his own funds. The deed was never recorded. Charles A. Cobb has had control and management of the property so conveyed, has rented it and collected the rents, receipting for the same, and has paid over small portions of the rent to his sis
Upon exceptions to this report, the cause came on to be heard by Judge Norton, who declared that he was satisfied with the findings of fact by the master; and held, substantially, that, from the evidence, there never was a bona fide irrevocable gift of the house and lot to the sister, but that from the beginning the alleged gift was merely pretensive and fraudulent, to be set up or not, as circumstances might require. The judge said: “I conclude that the intention of Charles A. Cobb, at the time the deed was made by Dr. Maxwell to him “for Mrs. Emma T. Turner” (née Cobb), was to quietly and as secretly as possible put the property in her hands, to be returned to him if the business and sporting ventures upon which he was about to enter should prove successful; but if these ventures should prove unsuccessful, then to be held by her against the claims of such creditors as might exist at the collapse thereof; and that in either event, and pending the result, he should have the management and benefit of the property, and that Mrs. Turner (then Miss Cobb) was cognizant of, and fully concurred in, such intention. All their acts are consistent with this conclusion, and many of them are inconsistent with any other. Cobb says he was a sporting man, and might lose the property, evincing the idea of providing for future contingencies,” &c. Thus holding, he granted the relief prayed for by the plaintiffs,
The exceptions are numerous (23- in number), and being printed in the Brief, need not be set out here. As stated at the bar, we think they may be condensed into the following propositions : 1. That subsequent creditors cannot attack a deed for fraud, or ask that it be set aside as to them. 2. That there was no proof of fraud originally on the part of C. A. Cobb or Mrs. Turner, and in that respect the Circuit Judge erred. 3. That C. A. Cobb did not hold out the property as his own, and did not receive credit on the faith of it. 4. That the plaintiffs have not exhausted their remedy at law.
It is certainly settled that a voluntary conveyance by a debtor is void as against his subsisting creditors, upon the principle that a man must be just before he is generous. But it by no means follows that all voluntary conveyances are good as against subsequent creditors. It is not quite certain that in this case there were no existing creditors of C. A. Cobb at the time the deed in question was executed by him, or had it executed by Dr. Maxwell. The judge states “that the debts which Richey says Cobb owed when goods were being bought for Cobb & Richey, may have existed prior to the deed, and might have been the dregs of some previous mercantile business.” But passing that, and assuming that Cobb was not indebted to any considerable extent at the time of the execution of the alleged deed of gift (1883), how does the matter stand 1 The principle applicable in such cases is carefully stated by the Chief Justice in the case of Walker, Evans & Cogswell v. Bollmann Brothers, 22 S. C., 512: “Before a subsequent creditor can attack a settlement or transfer of a party made when not indebted, he must show that the same was voluntary, and was made with reference to future indebtedness, or prove circumstances of fraud other than what arises from its being voluntary,” &c.
Apply this test. There is no doubt that the declaration here was voluntary; and his honor, the presiding judge, found that there were circumstances connected with the deed and the conduct of the parties which showed clearly that the deed was never intended to be a bona fide irrevocable transfer of the property to
But if, by possibility, this may be a mistake, there can be no doubt whatever of the following facts found by the master and concurred in by the judge: that the deed was withheld from the registry; that notwithstanding the words in the deed, “for Miss Emma T. Cobb,” C. A. Cobb retained the possession, leased the premises, and used the rent as his own, without objection on the part of his sister, the alleged donee, who testified that she “allowed Charley to use it as his own, so he did not run any risk with it;” Cobb mortgaged the lot in his. own name — returned it for taxation in his own name. The only record which could hav.e shown Mrs. Turner’s interest was withheld from public inspection, and every act touching the property after it passed from Dr. Maxwell’s ownership, from which creditors and the public could draw inferences as to the ownership, was, whether intentionally or not, calculated to induce the belief that it was C. A. Cobb’s property. The testimony shows that creditors were led to so believe, and on that belief extended him credit.
In the case of Brock v. Bowman (Rich. Eq. Cas., 189), Judge O’Neall, in delivering the judgment of the court, said: “If a
It is said, however, that this was in reference to personal property, as to which possession is yrima facie evidence of ownership, but that such is not the case as to land. It may be true that the mere possession of land is not generally as strong evidence of ownership as that of personalty ; but that is for the reason that, so far as the public is concerned, the real ownership of land is assumed to he shown by the record, required by law to be made for the express purpose of giving notice to all concerned. Where there is the possession and use of land as owner — so held out to the world — and there is no registry which explains the fact, we are unable to see why the same principle should not apply. The rule is based on the abhorrence of the law for covert and fraudulent dealing, which may as well occur in reference to one kind of property as another. See Bump Fraud. Conv., 48.
The conveyance of Dr. Maxwell to C. A. Cobb was for valuable consideration, and, as to the creditors of Cobb, must stand. But the superadded supplemental words, “for Miss Emma T. Cobb,” must be considered as an attempt on his part to make a separate and distinct deed of gift to her. The view is, that this effort to cover the property was kept secret and never recorded, and therefore, as to subsequent creditors without notice, who trusted him on the faith of his ownership, is void. “If a convey
As to the allegation of error in setting aside the mortgage, which was, in fact, satisfied. Upon this mortgage treasurer Judson signed the following endorsement: “Received of C. A. Cobb, for Miss Emma T. Cobb, $2,460, on note of J. C. Maxwell, for the security of which the mortgage was given; and I do hereby assign to C. A. Cobb, for Miss Emma T. Cobb, the mortgage to better protect his title to said property conveyed to him by J. C. Maxwell.” If the assignment, as stated, was intended to protect the rights of C. A. Cobb, we do not see how it could so operate; for Dr. Maxwell had paid the note it was given to secure, and executed titles to C. A. Cobb “for Miss Emma T. Cobb.” If it was intended to protect Miss Cobb under the provision of the deed “for Miss Emma T. Cobb,” we have already endeavored to show that said provision was fraudulent and void as against the creditors without notice of C. A. Cobb; and in
As to the necessity for the plaintiffs to exhaust their legal remedy before bringing action, we need only say that the judgments were against C. A. Cobb alone, and had been returned nulla bona by the sheriff, which is regarded the appropriate and necessary evidence of inability to secure payment otherwise. Suber v. Chandler, 18 S. C., 526.
The judgment of this court is, that the judgment of the Circuit Court be affirmed.
The defendants filed a petition for a rehearing of this case, alleging that some of the grounds taken by them in their exceptions and argument had not been considered by the court. Upon this petition, the following order was endorsed December 1, 1888:
We have carefully considered this petition, and fail to find that the court overlooked any material proposition of law or question of fact, and under the well settled rule there is no ground for a rehearing. It is ordered, that this petition be dismissed, and that the remittitur be sent down to the court below without further delay.