Davis v. B. J. Smith & Co.

Avery, J.: The exceptions raise three questions — (1) whether there was any evidence to support the finding upon the first issue, which alone was submitted to the jury; (2) whether the admitted facts shifted the burden of proof from the plaintiffs to the defendants by raising a presumption that the deed of assignment was fraudulent; (3) whether there was error in refusing the motion of the plaintiffs for judgment upon the verdict. If it plainly appears upon the face of a deed of assignment that it was executed not in good faith, but for the purpose of securing the ease and comfort of the debtor, the Court is empowered to declare it void without the intervention of .a jury. Woodruff v. Bowles, 104 N. C., 197; Brown v. Mitchell, 102 N. C., 347; Hardy v. Simpson, 13 Ired., 132. Is the reservation of personal property and homestead exemptions for both of the assignors conclusive evidence of a fraudulent, intent on their part? We think not. The reservation of the right to the personal property exemption and the homestead “allowed bylaw” was neither'conclusive nor presumptive evidence of a fraudulent purpose. Barber v. Buffaloe, 111 N. C., 206; Eigenbrun v. Smith, 98 N. C., 207; Bobbitt v. Bodwell, 105 N. C., 236. While “ it is well settled that each member of a partnership has a right to require the applicati<?n of the joint effects to the joint debts before any portion of them can be directed *101 to the satisfaction of the individual debts,” it is a rule of law, as firmly established, that, “ with the assent of the partners, any one of them is free to dispose of the -company’s effects for his individual use, and a creditor cannot interfere to prevent the application.” Allen v. Grissom, 90 N. C , 90; Clement v. Foster, 3 Ired. Eq., 213; Rankin v. Jones, 2 Jones’ Eq., 169. If there is no lien in favor of the creditors of the firm, we fail to see the force of the contention that the reservation of the exemptions out of the partnership effects, as the law permitted them to do, by agreement among themselves, raised a rebuttable, if not a conclusive, presumption of a fraudulent-purpose on the part of the assignors. The late Chief Justice Smith, in Allen v. Grissom, conceding that there was conflicting authority as to the right of partners, under an agreement among themselves, to apply partnership funds, by assignment or otherwise, to the payment of individual debts, says: “ This is the doctrine established by repeated recognitions in this Court, from which, whatever maybe the decisions elsewhere, we are not at liberty to depart, and it commends itself to our approval.” Admitting, therefore, that the research of the industrious counsel for the plaintiff has enabled him to array much authority from text-writers and Courts which have adopted different views, we are not required to again renew the discussion of questions so long ago settled by our learned predecessors. The admitted fact that the plaintiffs in the deed attempted to secure a larger amount of indebtedness to any of the preferred creditors than was actually due, while it fell as far shor-t of presumptive proof, was evidence of a fraudulent purpose, which, as we understand the case, was submitted to the jury as bearing upon the first issue. The weight of the testimony, in view of all accompanying circumstances shown, was to be determined by them. *102 After reserving the homestead and personal property exemption “allowed by law,” the use of the subsequent language, “ to be set apart by the party of the second part,” constitutes neither conclusive nor presumptive evidence of fraud. Having reserved only such exemptions as the Constitution and laws recognized, the designation of some irregular method of either setting apart the homestead or appraising personal property would not vitiate the instrument or taint it with fraud. It would be simply evidence that the assignors were ignorant of the law or misunderstood the method of proceeding prescribed by statute, while it was still permissible for any aggrieved creditor, who should obtain .judgment and sue out execution, to 'pursue the proper remedies to enforce his own judgment. We can see no error in the charge of the Court, that the burden still rested upon the plaintiffs to prove the fraud which they alleged to the satisfaction of the jury. We find no testimony which in law would have shifted the burden of proof, but only circumstances bearing upon the inquiry involved in the issue submitted, the weight of which was properly submitted to the jury. There was No Error.