Beasley v. . Bray

Smith, C. J., (after stating the case). There is no finding of a fraudulent intent in the making the sale, as there is none apparent in the transaction considered by itself and divested of attending incidents. An insolvent owner of property has the same right as one who is solvent, to dispose of it by a sale or conveyance to secure a present indebtedness, in the absence of an operating bankrupt act, when done bona fide and not with the covinous purpose of hindering or defrauding creditors, and the presence of such purpose alike vitiates and avoids the conveyance made by either. When the vitiating intent appears in the instrument itself, the Court ascertains and adjudges the fact, and no jury finding is necessary. But when the fraud is *270 to be inferred from surrounding circumstances, and is not an element in the transaction, it must be found by a jury, .and upon a proper issue framed to raise the enquiry. This is the settled construction of the statute of the 13th Elizabeth, whose terms ours essentially pursues, as will be seen by .some adjudications of late date to which we shall refer. “ It is the intent and purpose existing in the mind of the insolvent debtor,” remarks Ashe, J., in Savage v. Knight, 92 N. C., 497, “ at the time of making the assignment, to delay, hinder, defraud and defeat his creditors, that vitiates his assignment and makes it void,” to which we subjoin the qualification that if the conveyance be absolute the vendee must participate in the fraud, for the contract is the act not of one but of both the parties. Reade, J., in Lassiter v. Davis, 64 N. C., 500, and Boyden, J., in Reiger v. Davis, 67 N. C., 190, so in Hodges v. Lassiter, decided at last term, the Court say: “ As the question of the presence of an infecting element of fraudulent intent in making the assignment is one of fact, it was properly left to the jury to find upon the evidence and to deduce from it. What constitutes fraud is matter of law; what is sufficient evidence of the facts required to establish it, it is for the jury to find. When the fraud appears upon •the face of the assignment, it is so declared by the Court. When dependent upon external proofs, it is- to be found by the jury.” But the subject is more fully discussed and the true principle announced in Moore v. Hinnant, 89 N. C., 459, 460, in .•a quotation from Burrill on Assignments, §332, in these words: “ It is clear, however, from the language of the statute, 13 Elizabeth, that its provisions were directed exclusively .against conveyances made with an actual intent on the part of the debtors to hinder, delay or defraud creditors, as distinguished from the mere effect or operation of such convey-:anees. The expression in the preamble “ devised a/nd con *271 trived, to the end, purpose and intent,” &c., leave no room for doubt on this point.” Hence it has been sometimes very expressively designated as the statute against “fraudulent intents in alienations ” The Court therefore committed error in not submitting an issue as to the intent to the jury, which they, not the Court, must draw in ascertaining the presence of fraud. The ('ourt seems to have acted upon the idea that the law deduced the fraud from the insolvency of the parties and the indulgence allowed for the payments, and that in face of the finding that the plaintiff did nbt know of Williams’ insolvent condition, nor that he was pressed by debts when the sale was made. We see no reason in law why an insolvent debtor may not sell to another, who, if he has not present means to pay for his purchase, is also free from other debts; the vendor relying upon the integrity and capacity of the vendee to provide those means in time to meet his liabilities. Indeed, it seems he did, in managing the business, in the course of three months pay half the principal of the first maturing obligation. But upon these matters it was the province of the jury to pass, and they have not passed nor been permitted to pass upon the material element upon which the validity of the assignment depends. The case may present strong evidence of fraud, from which the jury might find its existence, but the effect of the evidence itself should have been left to them to determine. There is error, and the verdict must be set aside and a venire de novo awarded. Error. ] Venire de novo.