42 S.C. 475 | S.C. | 1894
The opinion of the court was delivered by
This action came on for trial before his honor, Judge Hudson, at the Fall Term, 1893, of the Court of Common Pleas for Lexington County, in this State. His honor filed his decree on the 23d day of November, 1893. All parties acquiesce in the decree, except that the plaintiff has appealed from the findings of fact and conclusions of law therein, whereby her bond, in the penalty of $11,050.64, conditioned to pay $5,525.32, with interest thereon from the 18th February, 1887, at ten per cent, per annum, together with the two mortgages on 754 acres of land given to secure said bond, were declared invalid, being held obnoxious to both section 2014 of what is known as our Law on Assignments, and also to the Statute of Elizabeth. She has presented ten grounds of appeal in assigning such errors, but inasmuch as both the decree and these grounds should appear in the report of this case, we have not deemed it necessary to reproduce them here.
It may.be better that we should briefly outline a history of this contest, as set out in the “Case.” It seems that the defendant, John A. J. Mitchell, was twice married. His first wife died about 1869, and he married again in 1872. By his first marriage he had four children, each of whom inherited an estate in the State of Tennessee, through their mother. These children being minors, their father became their guardian, and received their respective estates. He was also one of the executors of the will under which his children derived their estates. Mr. Mitchell also received for his present wife some money sent to her from the State of Texas, in 1874, and also her share of the estate of her father, the late Andrew Lee Lark, of Newberry County, in this State. The plaintiff, as part of the estate derived from her father, purchased at his estate sale a plantation
Some time in 1886, in the summer, that child of Mr. Mitchell who had intermarried with the defendant, Nathaniel B. Dial, sought a settlement at the hands of her father as her guardian. It would seem from his (Mitchell’s) testimony that from some cause, he conceived the idea that he owed his ward nothing, though he says in his testimony that he told her he was willing to pay $750 in full settlement. This settlement she declined. A suit was threatened, and when this was done, he used some language it would have been well if he had left unsaid. His language here referred to was, if you sue, “the largest pole will knock down the persimmon.” The defendant, Mitchell, not long after this, made up an account with his wife, including therein items of indebtedness as far back as thirteen years, and so on down to the date of his reckoning of the account in February, 1887. It appears to be a fact in the case that Mr. Mitchell had given no note to his wife all these years. On the 3d November, 1887, he executed a bond to the plaintiff in the penalty of $11,050.64, conditioned to pay $5,525.32, with interest thereon at ten per cent, per annum from 17th February, 1887. Mrs. Dial put her claim in judgment against him in 1892, first having obtained judgment in the courts of the State of Tennessee for $1,407.90. The other defendants put their claims in judgment in 1892.
Under this condition of things, the plaintiff brought her action to foreclose the mortgage she had purchased from Jones, also that purchased from Gunter, and also that executed 3d November, 1887. The defendants admitted the validity of the Jones and Gunter mortgages, but stoutly contested the plaintiff’s right to foreclose the mortgage executed 3d November, 1887, on two grounds: first, that it was invalid under the as
The next step on our part is to see if these findings of fact have any testimony to support them, or is the overwhelming weight of the testimony opposed to them. It is almost needless to repeat the rule of this court on this branch of the law; we will not undertake to reverse a decree when there is testimony. to support the findings of fact by the judge, sitting as a chancellor, or in case the overwhelming weight of the testimony does support his findings. It is earnestly insisted that in this case such findings of the Circuit Judge are wanting iu both these particulars. In deference to these suggestions, we have made a careful examination of the testimony, and will now give the reasons for our conclusions. Who is an “insolvent” under our laws? Our own court, in Akers v. Rowan, 33 S. C., 470, have approved the meaning ascribed to the term “insolvency,” in its general and popular meaning, viz: “the insufficiency of the entire property and assets of an individual to pay his debts,” and, in doing so, approve the definition given by Field, Justice, in Toof v. Martin, 13 Wall., 47, of such general and popular meaning. With this understanding of this term, we will answer the question as to testimony in this case establishing the insolvency of John A. J. Mitchell, on the 3d of November, 1887.
Mr. Mitchell, in his testimony, says he was possessed of $250 of personal property and $8,100 was the value of his landed estate. He was thus the possessor in the aggregate of $8,350 worth of property, real and personal. His indebtedness was as follows:
The debt set up by his wife on her bond and mortgage..$5,525 32
Int. from 17 Feb., ’87, to 3d Nov., ’87, at lOper cent. 411 36
The debt he owed Dr. F. G-. Fuller...................... 1,000 00
The debt he owed Mrs. Dial..,....,......................... 800 00
*484 The debt he owed his other three children, at $800 each 2,400 00
The Jones mortgage debt (the oldest mortgage)........ 720 00
The Gunter mortgage debt (dated in 1885).............. 800 00
The three debts now in judgment, about................. 600 00
Aggregate of indebtedness on 3d Nov'., 1887.....$12,256 68
Now, by deducting the $8,350.00 from the $12,256.68, we will find he owed $3,906.68 more than his property, if sold at his own valuation, would pay. Is not this insolvency?
Now, as to the second proposition. On the 3d November, 1887, the date Mitchell gave his wife the mortgage, he owed the Jones mortgage $720; the Gunter mortgage $800; add to these his wife’s mortgage debt, $5,936.68, aggregating for the mortgage debts $7,456.68. But he had $8,100 worth of property. Take from this the homestead exemption of $1,000, leaves $7,100 of property covered by mortgage liens of $7,456.68, and what was then left for his other creditors? But if we admit that he would not have been entitled to any homestead, the pitiful sum of $643.32 would have been left for his other creditors. These calculations are based upon the estimate of his property by Mitchell himself. This estimate is referred to by the judge in his decree as “very full." . So, that it appears that the Circuit Judge’s finding that this mortgage to the plaintiff actually, or practically, covered his entire estate, thereby leaving nothing to pay the demands of the defendants and other creditors, is fully sustained.
Was this security given in good faith to secure a debt, and for the sole purpose of securing a debt? The Circuit Judge has found as a fact that it was not. No doubt his honor had in his mind, in this connection, the sensitiveness of a Court of Equity in scrutinizing transactions of a business character between a husband and wife, parent and child, as the case may be. It was possible, in looking over the items in the account between himself and his wife, that Mitchell made out in February, 1887, the Circuit Judge may have remembered the case of Bridgers v. Howell, 27 S. C., 425, decided in 1887, when the court held that the earnings of the wife by her personal services were decided to be those of the husband, and remem
Next, was it in fact a transfer of his property to one creditor to the exclusion of other creditors? On the 3d day of November, 1887, as we have before seen, Mitchell owed $12,256.68, and he had $8,100 liable in law to the payment of such debts. By adding the mortgage of his wife given on that day to those he already had given, it will be seen he owed as liens on such estate, $7,456.68. When his assets of $8,100 were reduced by his homestead exemption of $1,000, he only had property valued at $7,100 to pay the liens thereon of $7,456.68. Was not this last mortgage for $5,936.68, therefore, a transfer of his property to one creditor to the exclusion of his other creditors? The Circuit Judge so found, and in the light of the testimony here we cannot reverse this finding. So, therefore, these propositions being accepted as true, can there be any doubt but that when Mitchell gave this mortgage to his wife it amounted to an assignment under section 2014 of our General Statutes (now section 2146, 1 Rev. Stat.), whereby Mitchell gave a preference to his wife, and on that account was invalid?
Before passing away from this quotation from the decree, so far as reference is there made to the character of the indebtedness of Mitchell to his wife not being bona fide, we desire to say that, under the uncontradieted testimony of the probate judge of Newberry, and of Mr. Mitchell here, there can be no question that Mrs. Mitchell did have an estate derived from her father, the late Andrew Lee Lark, which consisted in money and lauds, both of which passed under the control of Mr. Mitchell for his wife. Nor, further, can there be a doubt under this
Eeferring to the argument for appellant, we find that he admits that “those statutes [Statutes of Eliz.] were enacted for two purposes, one of which is to prevent the debtor from enjoying property while pretending to convey or transfer it to another, and the other of which is to prevent the debtor from transferring or encumbering property in order to escape a debt. The case of Smith v. Henry, 2 Bail., 118, belongs to the first class. The case of Lowry v. Pinson, Ibid., 324, belongs to the second class.” We agree with so much of the argument of the appellant, on this branch of the case, as holds that a bona fide conveyance or mortgage is not interdicted under the laws of this State, including the Statute of Elizabeth, which is of force here; that the presumption of fraud does not arise from the mere act of encumbering his property; that there must appear some proof either of his arrangement to keep what he pretends to convey, or some proof — satisfactory proof — that he is parting with his property in order to evade a creditor; that under our assignment laws as well as the Statute of Elizabeth the question is one of intention.
■ Let us look at the testimony to see if the Circuit Judge is sustained in his conclusion here assailed. If the debtor did anything by this mortgage to have it set aside as invalid by his creditors, it was under the second clause, namely, “conveying or encumbering his property in order to escape a debt.” Does the testimony warrant the finding of the Circuit Judge in this view? As before remarked, we agree to the findings of fact that Mitchell was not only an insolvent on the 3d day of No
It is the judgment of this court, that the judgment of the Circuit Court be affirmed, and the cause be remanded to the Circuit Court to enforce the Circuit decree.