First National Bank of Lumberton v. McCaskill

Clark, C. J., after stating the case: The general rule that judgments are binding only on parties and privies is subject to several exceptions, and especially where the judgment is in rem. Greenleaf Ev. (Lewis Ed.), sec. 525, p. 823; Bigelow on Estoppel (5 Ed.), 221, 229. In Ennis v. Smith, 14 Howard (U. S.), 400, in which the will of General Kosciusko and the genealogy of his family wer.e in question, the United States Supreme Court held: “The documentary proof in this cause from the Orphan’s Court, of the genealogy of the Kosciusko family and of the collateral relationship of the persons entitled to a decree, and *364 also of tbe wills of General Kosciusko, are properly in evidence in this suit. The record from Grodno is judicial; not a judgment inter partes, but a foreign judgment in rem, which is evidence of the facts adjudicated against all the world.” It may bo of interest to note, in passing, that Kosciusko was the famous Polish patriot who, coming to this country in our Revolution, became adjutant on Washington’s staff, and at the end of the war was made a brigadier-general and voted a donation of land by Congress. In 1793 he became general in chief of the Poles in their war against Russia, Austria, and Prussia at the second partition of their unfortunate country. His statue stands on the square opposite the White House at Washington. In line with these principles of law, this Court held, in Latham v. Wiswall, 37 N. C., 294, that a decree for the sale of the estate of a lunatic for the payment of debts was a decree in rem, and creditors are bound by it though not parties to the proceeding. In Bank v. Comrs., 116 N. C., 339, it was held that a decree in a suit by R. R. Co. v. the Town of Oxford, on the validity of a bond issue, was binding on the commissioners in a subsequent suit against them by the holder of certain of these bonds though the parties to the second suit were not those in the first suit. In Sly v. Hunt (Mass.), 21 L. R. A., 680, it was held that a probate of a contested will is conclusive as against the world. The decree of the Federal Court adjudging that this identical conveyance was made by the defendant in fraud of creditors is competent evidence, though not conclusive. A judgment is, so to speak, a quasi admission on the part of the party against whom it is rendered. It is at least evidence against him which it is encumbent upon him to rebut. It would not be competent for him if the judgment was in his favor, as the plaintiff was not a party to that action; but it is evidence against the defendant. Such judgment cannot be pleaded as an estoppel, nor is it conclusive against the defendant. But this judgment, being in rem, is evidence just as a judgment of a criminal offense could be so used. In re Skinner, 97 Fed., 190, held that a judgment rendered by a State Court in which the bankrupt, his wife, and the trustee, were all parties, finding that a conveyance by the bankrupt to his wife was fraudulent as to creditors and should be set aside, was conclusive evidence to that ■effect in the bankrupt Court on an application for his discharge, which was opposed by creditors on the ground that such conveyance was a concealment of assets. The deed declared void as to one creditor is void as to all the creditors then existing. Hoke v. Henderson, 14 N. C., 12, which is quoted in Clement v. Cozart, 112 N. C., 412, which holds that “A voluntary con *365 veyance where the grantor did not at the time of the grant retain property fully sufficient and available for the satisfaction of bis then creditors is fraudulent in law as to existing creditors. And if such conveyance shall be declared void at the suit of an existing creditor, all creditors— those existing at the execution of the conveyance and all subsequent creditors — will be entitled to come in and participate in the fund arising from a sale of the property, subject to. priorities and to the maxim vigilantibus non dormicntibus leges subvenient." To same purport, 1 Moore on Fraudulent Conveyance, 70 and 2 Do. 575. In Sibley v. Stacey, 53 W. Va., 292, it was held that a decree adjudging a conveyance fraudulent and void as to one creditor inures to the benefit of all other creditors in the same class. In Curlee v. Rembert, 37 S. C., 214, it was held that a conveyance cannot be void as to one creditor and valid as to another creditor in the same class. In Savage v. Knight, 92 N. C., 493, it was held that “a deed fraudulent and void as to one creditor is void as to all.” To the same purport, Eppright v. Kauffman, 90 Mo., 25. “A record may also be admitted in evidence in favor of a stranger, against one of the parties, as containing a solemn admission or judicial declaration by such party in regard to a certain fact.” Greenleaf Ev. (Lewis Ed.), sec. 527a, p. 825. In 11 A. & E. (2 Ed.), 391, it is said: “Where there is jurisdiction of the person and the subject-matter, and the judgment is not the result of fraud and collusion between the parties to it, and the record is material only to establish the fact of such judgment and those legal consequences which result from that fact, the record must be regarded as conclusive even as to strangers. The object of this rule is to give stability and security to judgments, decrees, and sentences when made by courts having jurisdiction of the person and the subject-matter, and they are, therefore, founded on and supported by a sound public policy which admits an inflexible adherence to them.” In excluding this evidence there was Error. HoKe and AlleN, JJ., dissenting.