Edwards v. . Sorrell

Connor, J., after stating tbe facts.: Tbe petition for discharge complies, in terms, with tbe provisions of section 1930 of tbe Revisal, subsection 2 of which provides that tbe petitioner must file with bis petition “a full and true inventory of bis estate, real and personal, with encumbrances existing thereon, and all books, vouchers and securities relating thereto.” Section 1934 provides that “Every creditor opposing tbe discharge of tbe insolvent may suggest fraud and set forth tbe particulars thereof in writing, verified by bis oath,” etc. Tbe statutes applicable to cases of this kind are not so clear as they should be. Defendant was arrested and is in custody, pursuant to tbe ancillary proceeding prescribed by subsection 2, section 727, Revisal. .The method by which be may be discharged before judgment is prescribed by sections 735 and 737, neither of which contemplate tbe procedure provided by sections 1920 et seq. The language of section 1920 is sufficiently comprehensive to include defendant’s case: “Tbe following persons are entitled to tbe benefits of this chapter: (1) Every person taken or charged on any order of arrest or a surrender of bail.” Subsection 2 provides that any person taken “on execution of arrest for any debt or damages rendered in any action whatever,” thus making a distinction between a person in custody on an order of arrest which' includes such order made before judgment and a person in custody under final process. ' Whatever contradiction, may appear to exist between the several sections of the Revisal — originally different statutes; — is met by construing them as one statute, as, by their enactment as a part of the Revisal, they become. The .right to be discharged by complying with the last-named sections is in addition to the remedies given in sections 735 and 737. The Constitution prohibits imprisonment for debt, except in cases of fraud. Without undertaking to discuss the question *716 whether the cause of action set out in complaint comes within the exception, we are of the opinion that the defendant is entitled to the benefit of the provisions of the statute for the relief of insolvent debtors. The sole question presented by the appeal, therefore, is whether the answer of plaintiff to the petition for discharge raises an issue of fact. Defendant having filed the schedule of his property, it was not only proper, but necessary, that he should set out the facts showing what right, title, estate and interest he held in the real estate. This he has done by making specific reference to the deeds showing the title conveyed by them. He simply says to the plaintiff, “Here is a schedule of my property; I surrender such right, title’and estate as the court may decide I have therein.” The fact that he further .says that he is advised by counsel that, by reason of the condition of the title, it-is not subject to execution, while not improper, is surplusage. What the law is, in that respect, will be for the ultimate decision of the Court. It cannot be decided at this time nor in the present state of the record. The plaintiff, recognizing the fact that he must do something more than .merely “suggest fraud” — that is, set out the particulars, etc.— has, in compliance with the statute, done so. The suggestion and particulars set out simply raise a question of law — that is, he differs from the opinion of defendant’s counsel as to the legal effect of the deeds under which defendant holds title to the land. If he is correct in his opinion, the land will be subject to execution upon such judgment as he may recover in his action. The defendant has surrendered such title as he has; how can he do more ? We have discussed the question as to the liability of lands conveyed to husband and wife for the debts of either in Hood v. Mercer, ante, 699, where the authorities are collected. It is suggested, however, that defendant paid the purchase money for the lot conveyed by Mr. Foushee, commissioner, and that, in having the title made to his wife and- himself, he was guilty of fraud. If plaintiff’s view of the law be correct, the land is liable to his debts. If the fact be that defendant furnished the purchase money for the land, the legal effect of it would depend upon the date when plaintiff’s cause of action accrued. *717 Tbe allegation in tbe complaint is tbat “during tbe month of March, 1909, and during many months preceding,” the defendant was guilty of tbe wrongs which constitute plaintiff’s cause of action. The deed from Mr. Foushee, commissioner, was. executed 28 June, 1907. It does not appear with sufficient certainty that defendant then owed any debts or had incurred any liability to plaintiff to render his payment of the purchase money for the land fraudulent. If the fact be as suggested, the right of the plaintiff would be enforced by an action brought by the trustee, to be appointed pursuant to the statute, in which the wife would be a necessary party. We do not perceive how these questions can be passed upon in this proceeding. The ease of Adams v. Alexander, 23 N. C., 501, is relied upon. There the debtor had executed a deed of assignment of his property for the payment of debts. In his schedule he surrendered only his interest after the payment of the debts named in the assignment. The creditor, in opposing his discharge, alleged that the assignment was made with intent to defraud his creditors. This Court held that, as the debtor had scheduled “only the resulting trusts, which affirms the other trusts to be bona fide and good and is an assignment of the surplus only after all the other purposes of the deed have been answered, he had not complied with the statute.” Hutton v. Self, 28 N. C., 285. Here the petitioner schedules the property or the muniments of his title. Whatever he has passes to and vests in the trustee, to be applied to his debts. It would be a hardship on a debtor if, because, with no fault on his'part, the title to his property is involved in doubtful questions of law, he must remain in prison until, after litigation, they are settled by the courts.' The purpose of the law is to compel him to make an honest surrender of his property to his creditors. If he does that, he is entitled to be discharged. He is not imprisoned as a punishment for his inability to pay his debts. That was the conception of a discarded past. This case is a striking illustration of the hardship which could be perpetrated if the law was different. The plaintiff sues in forma pauperis, claiming $10,000 damages. He gives a bond, in the ancillary proceeding, in the sum of $100 and holds defendant to bail in the sum of $2,500. *718 If be may, after defendant has surrendered bis property to meet sucb judgment as may be rendered against bim, bold bim in custody until, after long litigation, tbe end is reached, tbe defendant, if be should successfully defend tbe action, would have suffered great wrong without any redress. If tbe plaintiff shall succeed in obtaining a judgment, be has all of defendant’s property bound for it and a right to sue out execution against bis person. We are of tbe opinion that tbe answer did not raise any issue to be submitted to tbe jury and that petitioner is entitled to bis discharge as prayed for. Tbe court will proceed to secure tbe property to meet tbe final result of tbe action. This opinion and judgment will be certified to tbe Clerk of tbe Superior Court of Durham County, to tbe end that further proceedings may be bad in accordance herewith! Reversed.