Finley v. Cartwright

The opinion of the Court was delivered by Mr. Justice Jones. The receiver of Cartwright & Co., and of the individuals composing that firm, brings this action to set aside a conveyance of land by A. Y. Cartwright to his wife, Carrie J. Cartwright, on the ground that said conveyance is void under the assignment act, sec. 2015, General Statutes, appearing as section 2147, Revised Statutes, because executed within ninety days previous to an assignment for the benefit of creditors by Cartwright & Co., and under circumstances forbidden by said act. The facts [200] found by the Circuit Court are as follows: “On the 5th day of January, 1894, A. Y. Cartwright was insolvent, as was also the firm of A. Y. Cartwright & Co., of which he was a member, and that on said 5th day of January, 1894, being then and now a resident of this State and the head of a family, he conveyed to Carrie J. Cartwright, his wife, an undivided one-half interest in the town property embraced in the deed of Mrs. McElwee and Mrs. Faulkner to A. Y. Cartwright, dated October 5th, 1893, which is the deed in this action sought to be avoided, and covering all the tangible property of A. Y. Cartwright. That on the 5th day of January, 1894, Mrs. Carrie J. Cartwright was a creditor of her husband, A. Y. Cartwright, and that the transaction between them on said date was had with a view to give Mrs. Carrie J. Cartwright a preference, forbidden by law, and to the exclusion of his other creditors; that Mrs. Carrie J. Cartwrigh* had reasonable cause to believe that her husband was insolvent at the time, and was in fact informed of his insolvency; that Mrs. Carrie J. Cartwright had reasonable cause to believe that the deed executed to her by her husband was executed in anticipation of executing the deed of assignment to Thomas F. McDow, which was executed on February 1st, 1894, and that such transaction was had in violation of and in evasion of the provision of chapter 72 of the General Statutes of South Carolina; that this transaction between husband and wife took place within ninety days before the execution of the deed of assignment to Thomas F. McDow, on February 1st, 1894, which said deed of assignment has been assailed and vacated as obnoxious to the provisions of the common law, the Statute of Elizabeth and the assignment law of this State, in the decree of this Court, rendered by Judge Benet, dated August 28th, 1895, from which, as before mentioned, there has been no appeal. On the 5th day of January, 1894, the total value of the property embraced in the deed of Margaret A. McElwee and Sallie E. Faulkner to A. Y. Cartwright, I find to be the sum of $2,200, a street having previously been opened through the [201] property, which had been subdivided into building lots of ioo feet front and of slightly varying depth, which said lots, or some of them, had been contracted for at prices ranging from $200 to $350 per lot. I find that the undivided one-half interest in said lots conveyed to Mrs. Carrie J. Cartwright on the 5th day of January, 1894, was of the value of $1,100. The other undivided half interest was conveyed to W. B. Moore on the same day by A. Y. Cartwright.” Upon these facts he found as matter of law that the deed by A. Y. Cartwright to his wife, Carrie J. Cartwright, is void to the extent of the excess of the value of the land conveyed over and above the sum of $1,000, the homestead of A. Y. Cartwright in said land, which excess he found to be $100. Accordingly he adjudged the deed void as to the creditors of A. Y. Cartwright & Co., with a provision that said deed should stand if the grantee within thirty days pa}'' $100 to the receiver. 1 Appellant assigns several errors in thefindings of fact; but as we view the case, the controlling question in reference thereto is whether the value of the premises.conveyed exceeded $1,000. It is not disputed that A. Y. Cartwright, as the head of a family resident in this State, was entitled to a homestead in the premises, and, therefore, if the value of the premises conveyed to his wife did not exceed $1,000, it is manifest that the deed to the wife did not convey to her any property which the creditors of her husband have a right to subject to the payment of their claims. Haynes v. Hoffman, 46 S. C., 167, and cases cited therein. A. Y. Cartwright was in no way bound to assign for the benefit of creditors property exempt as a homestead, and he could make a valid conveyance of such property to his wife. Cantrell v. Fowler, 24 S. C., 424; Ketchin v. McCarley, 26 S. C., 1, and other cases. [202] 2 3 [203] 2 4 [201] Did the premises conveyed exceed $1,000? In a case in equity, as this is, this Court has jurisdiction to “review the findings of fact,” under art. 5, sec. 4, of the Constitution, and this necessarily involves an examination of the evidence [202] with a view to ascertain what, in the judgment of this Court, is the truth. While there has been some difference of opinion among the members of the Court as to the rule which should govern in reviewing questions of fact under the Constitution of 1895, it may now be regarded as settled that this Court may reverse a finding of fact by the Circuit Court, when the appellant satisfies this Court that the preponderance of the evidence is against the finding of the Circuit Court. Bleckley Co. v. Goodwin, 51 S. C., 363. In this case we think the finding of the Circuit Court, that the premises conveyed exceeded $1,000, is against the preponderance of the evidence. We will not go into any extensive discussion of the evidence, as such a discussion would be of no value as a precedent, but will notice briefly some of the evidence. It appears that on October 5th, 1893, Margaret A. McElwee and Sallie E. Faulkner sold and conveyed a lot containing eight or ten acres, within the corporate limits of Yorkville, to A. Y. Cartwright, for $575. This lot was used for planting cotton, and the evidence clearly shows that the sum named was a fair price for the same at that time. A short time thereafter, Cartwright succeeded in securing the town council to open a street through said lot, whereupon Cartwright subdivided it into ten lots for building purposes. Then certain young men who had recently married, or were about to marry, formed a plan of settling on this street as friends and neighbors. Three parties agreed in writing with Cartwright to buy each a lot for these sums respectively, $250, $200, and $200. Three other parties agreed verbally to take each a lot at these sums, $220, $200, and $350. Two of these parties did afterwards build on their respective lots. If the four remaining lots should be estimated at $200 each, we would thus have a valuation of $2,220 for the whole. The Circuit Judge valued the whole at.$2,200. But it is manifest from the evidence that these prices were boom prices. So far as appears, no money has ever been paid on these contracts. While the young gentlemen were men of [203] high character, it appears that most of them were men of small means, and could not have been compelled to pay under execution. One of the parties who built bought with the expectation of a large reduction from the price in the way of attorney’s fees; another testified that his contract was conditional on his receiving certain funds which he did not receive; while another, unwilling to comply, testified that he asked for and obtained a release, and that the lot he bargained for was not worth more than $50 or $75. The witnesses generally agreed that $575 was a fair price for the land when purchased by Cartwright, October 5th, 1893. An undivided half interest in said land was conveyed by Cartwright to his wife January 5, 1894, after the opening of the street, and after the above mentioned contracts for sale of lots. While a number of witnesses were examined, not one valued the whole premises as high as $2,000 after the opening of the street; although it was generally agreed that the opening of the street and the prospect of selling building lots considerably enhanced the value of the property. It was error, therefore, to value the property conveyed to Mrs. Cartwright at more than $1,000. This being so, there was error of law in adjudging the conveyance void under the assignment act; for conceding that Mrs. Cartwright was a creditor of her husband, A. Y. Cartwright, that Cartwright was insolvent, and contemplated making an assignment for the benefit of his creditors, and that his wife knew these facts, and conceding that the conveyance ivas executed within ninety days previous to the making of a valid assignment, still the conveyance could not be held as made with a view to give the wife an unlawful preference, since what was conveyed was beyond the reach of creditors and within Cartwright’s power of disposal without regard to creditors. In order to set aside a conveyance as void under sec. 2147, Revised Statutes, it is necessary to show: (1) that the grantor was insolvent at the time of the conveyance; (2) that the conveyance was made with a view to give an unlawful pref [204] erence; (3) that the grantee had reasonable cause to believe that the grantor was insolvent at the time of the conveyance; (4) that the grantee had reasonable cause to believe that the conveyance was made in fraud of the assignment law; (5) that the conveyance was executed within ninety days previous to the execution of a valid deed of assignment. Haynes v. Hoffman, 46 S. C., 166. If the property conveyed is protected from creditors by homestead exemption, and so need not be assigned for the benefit of creditors because of such exemption, th$ second and fourth conditions above mentioned do not exist. 5 Furthermore, it appears that the so-called deed of assignment was void. The case then stands as if no attempt to execute a deed of assignment had been made. The statute contemplates a valid assignment, and the right of the assignee thereunder to recover the property. It follows that the conveyance in question does not come within the prohibition of the statute for failure to establish the fifth condition above mentioned. The judgment of the Circuit Court is reversed, and the complaint is dismissed.