Redmond v. . Chandley

MONTGOMERY, J.: Both plaintiff's and defendants tendered issues but the court refused them and substituted the following: 1. Did the defendant, B. T. Ohandley, execute and deliver the deed set out in the complaint to hinder, delay, defeat and defraud creditors? 2. Did defendant, N. M. Ohandley, accept said deed with knowledge of the intent of B. T. Ohandley to hinder, delay, defeat and defraud creditors? These issues were sufficient to try the question raised by the pleadings — the question whether or not the deed which was executed by the husband Ohandley to his wife *578 was done with intent to hinder, delay, defeat and defraud creditors. It is within the sound discretion of the trial judge to determine what issues shall be submitted, and to frame them subject to the restrictions, first, that only issues'of fact raised by the pleadings are submitted ; secondly, that the verdict constitutes a sufficient basis for a judgment; and, thirdly, that it does not appear that a party was debarred for want of an additional issue or issues of the opportunity to present to the jury some view of the law arising out of the evidence. The application of the law concerning the burden of proof in cases involving issues of fraud has been greatly simplified by the discussions of the matter in our own reports. A reiteration of the learning, however, may not be out of place here. If fraud appears plainly upon the face of the instrument impeached, there is no need for the intervention of the jury ; the presumption that fraud was intended is conclusive, and the court will pronounce the paper void in law. Hodges v. Lassiter, 96 N. C., 351; Brown v. Mitchell, 102 N. C., 347. If the fraud does not appear upon the face of the deed, the facts are to be developed on the trial before the jury. If the plaintiff shows certain facts and circumstances, as for instance that the grantor, insolvent or much embarrassed, has conveyed property of much value to a near relative, and the transaction is secret, and no one is present to witness the trade but these near relatives, and the defendant offers no evidence of good faith in the transaction, or if that which he does offer is not sufficient to be submitted to the jury, the law raises the presumption that the deed is fraudulent, and the jury should be instructed that if they believe the plaintiff’s testimony they should answer the issue of fraud in favor of the plaintiff. If, however, these relatives, as witnesses, give evidence in *579 rebuttal of the presumption of law, the jury should be instructed that if the defendant’s testimony satisfies them that there was no purpose of secrecy and that the transaction was fair and the consideration honest and adeqnate, then the presumption raised by the plaintiff’s testimony that the deed was fraudulent is rebutted, and the intent of the parties is a matter for the jury to determine, as the evidence may satisfy them. Bank v. Gilmer, 116 N. C., 684 ; Stoneburner v. Jeffreys, Ibid., 86 ; Brown v. Mitchell, supra; Woodruff v. Bowles, 104 N. C., 197. Then, again, if in a case where the facts and circumstances are such as to excite suspicion about the bona fides connected with the deed, su.h as, for instance, an unusual delay in its registra-tration, inadequacy of price, long credit if the grantor is pressed for money, and the like, the matter should be submitted to the jury and they should be instructed that such circumstances are suspicious, are what the law calls badges of fraud, to be closely scrutinized, but that they do not constitute a presumption of fraud in law, and that the burden of proof is on the party alleging fraud. Bank v. Gilmer, supra. In Beiger v. Davis, 67 N. C., 185, it is said : “ It is a rule of law to be laid down by the court that whore a debtor, much embarrassed, conveys property of much value to a near relative, and the transaction is secret, and no one is present to witness the trade-but these near relatives, it is to be regarded as fraudulent; but when these relatives are made witnesses in the cause and depose to the fairness and bona fides of the transaction, and that there was in fact no purpose of secrecy, it then becomes a question for the jury to determine the intent which influenced the parties, and to find it fraudulent or otherwise, as the evidence might satisfy them.” And that is the law now, notwithstanding there may be some unguarded expressions on the *580 sabject in our Reports since that case was decided. Helms v. Green, 105 N. C., 251. In the case before us, the deed alleged to be fraudulent was made by a husband to his wife, the defendant. Does the same rule laid down in Reiger v. Davis, supra, apply to this case ? It would seem not. It has been decided in numerous cases that where creditors attack as fraudulent a deed made apparently upon valuable consideration by an insolvent or much embarrassed husband to his wife, without any other badge of fraud or suspicious circumstance, the onus is upon the wife to show that the transaction is honest, that the consideration named in the deed has been paid in money or something else of value. Brown v. Mitchell and Woodruff v. Bowles, supra ; Stephenson v. Felton, 106 N. C., 114 ; Peeler v. Peeler, 109 N. C., 628; Bank v. Gilmer, supra. According to these decisions his Honor was correct in instructing the jury that the mere fact that the deed was made by the (insolvent) husband to his wife raised a presumption of fraud in law and must be rebutted by evidence. The defendants offered no evidence. The recital of a consideration in the deed was not evidence against the plaintiff, who was a creditor. It was merely a declaration or admission, of no effect except between grantor and grantee. Waitt on Fraudulent Conveyances, Sec. 220 : Bank v. Beakman, 36 N. J. Eq., 83. No Error.