Holmes v. . Marshall

78 N.C. 262 | N.C. | 1878

In Cheatham v. Hawkins, 76 N.C. 335, this Court said: "If there were other unsecured creditors at the time of this (264) assignment, and no other property of the debtor than that conveyed in the mortgage, out of which the creditors could make their debts, the fraudulent intent would seem to be irrebuttable. A clear benefit is secured to the debtor, and a clear right is withheld from the creditor, beyond what the law permits. An assignment cannot cover up and preserve the property for the debtor's use, or protect it from the remedies and demands of the creditors. Here is not only a retention of possession by the assignor which raises the presumption of fraud, but there is reserved the further power to dispose of it for the debtor's benefit, and still more, the exercise of that power annihilates the thing itself."

The plaintiff, in the case before us, testified that at the time of the execution of the deed of trust to him he had no notice or knowledge of the fact of the indebtedness of the trustors. His Honor held that this was not sufficient evidence to rebut the presumption of fraud which the law raised upon the deed. We think it was no evidence. The presumption of fraud here is not affected by the ignorance of the plaintiff of the insolvency of the trustors at the time of the execution of the deed; but the presumption is raised by the fact of their insolvency, and the further fact that the plaintiff is a party to a deed of trust which secures a benefit to the makers, and which conflicts with the rights of creditors. In fact, there were other creditors of the vendors at the time the deed was executed. The advantages reserved to the debtors in the deed were to the prejudice of those creditors, and as the plaintiff was a party to the deed, he is presumed to have intended the probable consequences of his act. It was either his duty not to have taken such a deed, or, taking it, to have first known that there were no creditors to be prejudiced by it.

PER CURIAM. No error.

Cited: Cheatham v. Hawkins, 80 N.C. 165; Booth v. Carstarphen,107 N.C. 400; Grocery Co. v. Taylor, 162 N.C. 311.

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