Garland v. . Arrowood

Walker, J., after stating the case: The court erred, not in setting aside the verdict as to the second issue, but in answering the issue itself, and thereby reversing the jury’s finding. The plaintiff contended that the second issue is immaterial, as the defendant in the sixth section of his answer admitted his insolvency at the time the improvements were made on his father’s premises. Saying that “he owed little or nothing-more than he has property to pay” was not definite enough for a judicial admission that he was insolvent. If he owed nothing more than he had property with which to satisfy all claims against him, he might well he solvent within the meaning of our statute as to fraudulent conveyances, which declares that no voluntary gift or settlement of property by one indebted shall be deemed or taken to be void in law, as to creditors of the donor or settlor, prior to such gift or settlement, by reason merely of such indebtedness, if property, at the time of making such gift or settlement, fully sufficient and available for the satisfaction of his then creditors, be retained by such donor or settlor. All things considered, the jury may have found, upon this statement in his answer, that the property retained by the defendant, Luther 0. Arro-wood, was “fully sufficient and available” to pay his then existing debts. We exclude from our consideration the other half of the statute (Revisal, sec. 962), concerning the effect of indebtedness, as evidence *374 of fraud, with respect to prior and subsequent creditors, as it appears to be immaterial for the purpose of deciding this appeal. It is apparent from a reading of section six (6) of the answer that the defendant was attempting, at least, to deny his insolvent condition, and to assert that he was only able to take care of his own indebtedness. Nor do we think that his testimony upon the same subject can be taken as an admission of his insolvency within the meaning and definition of that word by the statute. It is not a judicial admission, but merely evidence, which, coming from a party whose interest will be adversely affected by it, may more readily convince the jury that the fact to which he testified exists, but it is not decisive, as a judicial admission would be, within the principle that what is admitted need not be proved. Tredwell v. Graham, 88 N. C., 208. A calculation made from his own figures or estimate of what he was worth at the time the money was expended for making the improvements, however strong as proof, was not so conclusive as to withdraw the question from the jury. Taking all the testimony in the case together, including, of course, that of Luther 0. Arrowood, which is now claimed to contain an admission of insolvency, we are of the opinion that it should have been submitted to the jury to find the fact of solvency or insolvency, and that the judge erred in deciding that question himself and answering the issue without the intervention of the jury. The other issues involved substantially mere questions of fact, and there was evidence to support the verdict. Some of the issues were answered by consent, and most, if not all, of the remaining ones were answered favorably to the appellant. The case, therefore, practically turned npon the answer to the second issue. The motion for a nonsuit was properly overruled. The same motion was before the Court in the former appeals, and was denied, as the Court granted a new trial in each of the two appeals, which could not have been done unless the nonsuit had been disallowed. This decision, too, was right, as there was evidence to sustain the cause of action. The jury have found that there was no actual intent to defraud or, in other words, no mala mens, but if the defendant, the donor of the gift, failed to retain property fully sufficient and available for the satisfaction of his then creditors, the gift was void in law, without regard to the intent with which it was made. Black v. Saunders, 46 N. C., 67; Aman v. Walker, 165 N. C., 224; Michael v. Moore, 157 N. C., 462. The burden of at least going forward with proof of such retention of property is upon the defendant, where, as found in this case by the jury, there is a voluntary gift or settlement. Brown v. Mitchell, 102 N. C., 347, 369; Tredwell v. Graham, 88 N. C., 208; Cook v. Guirkin, 119 N. C., 13; Aman v. Walker, supra. *375 It may be tbat the second issue should be framed more in accordance with the language of the statute in regard to voluntary gifts (Revisal of 1905, sec. 962), but we leave this to counsel and the court, as in its present form the issue may answer all practical purposes with proper instructions from the judge. We have considered, and decided so far, only those questions which are directly involved in this appeal, confining ourselves strictly to them. The rights of existing and subsequent creditors when there is a voluntary gift or settlement voidable under the statute, are fully discussed and set forth in Aman v. Walker, supra, and we content ourselves with merely referring to that case where the subject is so clearly and accurately treated. Our conclusion is that there was error, and that there should be a new trial, which, though, must be restricted to the second issue only, and the other issues will stand as now answered. This opinion will be certified with instructions to proceed in accordance therewith. New trial as to second issue.