Nadal v. . Britton

Burwell, J.: The plaintiffs are creditors of R. W. King, deceased. The defendants are his administrator and his widow. The object of this action is to have declared fraudulent and void a deed in trust, made in February, 1887, by R. W. King to Peter Hines, to secure a debt of $2,500 due from him to his wife. This deed was not registered till January, 1891, a few days after the death of King. Two issues were submitted to the jury (neither party objecting thereto) as follows: 1. Was the trust deed executed and delivered? 2. Was said deed made with intent to hinder, delay or defraud creditors? His Honor instructed the jury to answer the first issue in the affirmative. To this the plaintiffs did not except. The fact that R. W. King was justly indebted to his wife, at the date of the execution and delivery of this deed, to the amount thereby secured to her, does not seem to have been controverted. Indeed, the amended complaint málces no allegation that the debt was not a just one and avers that “the defendant Carrie J. King holds a note against her deceased husband, dated February 15, 1887, *186 for $2,500.” The bona fides of the debt and the execution and delivery of the trust deed are thus established. His Honor was asked to charge the jury that there was no evidence upon which they could find that the deed was made by King with intent to hinder, delay or defraud creditors. This he refused to do, and the defendants excepted. In this we think he erred. When the indebtedness was admitted or uncontroverted proof thereof was produced, the burden rested on the plaintiffs to prove the fraud that they alleged. Hodges v. Lassiter, 96 N. C., 351; Brown v. Mitchell, 102 N. C., 347. And it was incumbent upon them to prove not only the fraudulent intent of the grantor, but also the fact that the defendant (Mrs. King) had knowledge of that intent and participated in it, and his Honor so told the jury. We do not think there was any evidence from which the jury could have inferred either that King’s intent was fraudulent or that his wife had knowledge of such intent, if it existed. If it is true that the husband was embarrassed by debt at the time of the execution of the note and the deed in trust to secure it, and that he had little or no property except the house and lot conveyed, these facts, far from establishing any wicked or fraudulent intent on his part, seem rather to show that he' was acting most properly and commendably when he delivered to his wife this security for the repayment of the money he then borrowed from her. If the debt was an honest one, as is conceded, the securing of it under the circumstances was most commendable. Nor does the fact that the other creditors of King, witnesses on the trial, knew nothing of the debt due from him to his wife, and of the deed in trust to secure that debt, tend at all to establish the fraudulent intent or the guilty knowledge. It was no part of their duty to tell to others their resources or liabilities. *187 Nor can the withholding of the deed from registration, from its date in 1887 to 1891, be considered as evidence of a fraudulent intent under the circumstances of this case. The bona fides of the debt being admitted, and the execution and delivéry of the deed in trust being established, this fact lost its significance. From the circumstance that the deed was not registered when it was executed, nor for so long a time afterwards, the. jury might have inferred, if that question had been before them, that the debt was fictitious. But, in the absence of any allegation to that effect, and after the execution of the deed had been fully proved, the failure to promptly register her deed was of no importance in this controversy, as there was no evidence at all that, while so withholding her deed from registration, she induced any one to give credit to her husband upon the faith of his being the absolute owner of the property on which she now claims her lien. Indeed, it seems from the testimony of two of the plaintiffs that she did not know that her husband owed any debts, for she told them, when they visited him in his last illness, that he owed nothing, and therefore it would not be necessary t.o sell the house and lot which she wished her daughters to have. This expression might perhaps tend to show that her debt was fictitious, but the debt being admitted, it certainly docs not tend to show that she had knowledge that her husband, when he borrowed her money and secured its repayment by a deed in trust, was contriving to hinder, delay or defraud his creditors^ present or future. But the jury have only found that the deed was made with intent to hinder,’ delay or defraud creditors; they have not found that Mrs. King had knowledge of that fraudulent intent. Without such a finding by the jury no judgment should have been rendered against her. Error. New Trial Awarded.