238 F. 913 | 4th Cir. | 1916
The defendant John A. Hursey was adjudged a bankrupt in December, 1914. His indebtedness was about $15,000 and his assets about $1,000. The trustee brought this action to set aside a conveyance from Hursey to his wife, Mattie Hursey, of five lots in the town of Dillon for the expressed consideration of $500 and love and affection. The District Court held on the evidence that there was no actual fraud in the transaction, and on this point there is no assignment of erro'r. .The appeal involves the two questions whether the District'Court was right in holding: First, that there was an antecedent debt or obligation to the Navassa Guano Company; and, second, that the deed was voluntary and invalid as to that debt. At the time of the conveyance Hursey was a merchant in the town of Dillon. The evidence fails to show that he was under any pecuniary obligation at the time, either fixed or conditional, except such as may have been assumed by a contract dated January 10, 1911, for the purchase of 375 tons of fertilizers from the Navassa Guano Company. The contract was taken by the company’s traveling agent and contained the stipulation that it should “be operative only after being approved by the company’s home office.” No fertilizer was shipped under it until February 13, 1911, after the execution and record of the deed.
“The rule may tie stated to be that slight indebtedness, such' as for current expenses for a family or debts inconsiderable to the value of the donor’s estate, will not generally avoid a voluntary conveyance; but, subject to this qualification, it seems to be a settled rule of law that one who is in debt cannot make a voluntary conveyance which will prevail against existing debts.” Blakeney v. Kirkley, 2 Nott & McC. (S. C.) 544; McElwee v. Sutton, 2 Bailey (S. C.) 128; Izard v. Middleton, 1 Bailey, Eq. (S. C.) 228; Richardson v. Rhodus, 14 Rich. (S. C.) 95; Anderson v. Pilgram, 41 S. C. 423, 19 S. E. 1002, 20 S. E. 64; Barrett v. Still, 102 S. C. 53, 86 S. E. 204.
The rule is thus well stated in Bispham’s Equity (7th Ed.) page 375:'
“The true rule seems to be that the gift will be valid if the ‘donor has, at • the time, the pecuniary ability to withdraw the amount of the donation from his estate without the least hazard to his creditors, or in any material degree lessening their prospects for payment.’ ”
The consideration of $500 was not nominal, but it was altogether inadequate. The lots were worth four or five times that amount. Such inadequacy shows always either imposition, or some other consideration entering into the transaction. It is not logical to say that a conveyance made without actual fraud must be either altogether
The question whether equity will require repayment from the proceeds of sale of the $500 actually paid by Mrs. Hursey has not been passed on by the District Court, and it would not be proper for this court to anticipate it. Indeed, the question will disappear, should Mrs. Hursey elect to exercise the right fixed by the District Court to pay the debt of the Navassa Guano Company and retain the property.
Affirmed.
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