Den Ex Dem. of Morgan v. McLelland , 14 N.C. 82 ( 1831 )

There was contradictory evidence as to the consideration, upon which the deed to the defendant had been executed. It was proved that McLelland, the elder, died in the year 1824, insolvent. (83) His Honor, Martin, J., at CABARRUS, on the last circuit, left the question of the consideration paid by the defendant to his father to the jury, and instructed them that if the deed was voluntary it was of itself a fraud upon creditors. A verdict was returned for the plaintiff, and the defendant appealed. The instruction that the deed from the father to the son, if voluntary, was fraudulent and void as against the creditor, under whose execution the lessor of the plaintiff purchased, is the only point in the charge of the court to which exception is taken.

The debt was antecedent to the settlements, being for a default in the office of sheriff, which was resigned in April, 1823, and the deed being executed in July following.

The position thus laid down by the judge, in a case like this, cannot admit of a question. It ought not to be brought into doubt for a moment. Under statute, 13 Eliz., debts subsequently contracted by one who had made himself insolvent by a previous voluntary conveyance immediately before have been protected, upon the ground that the deed was made with the view to become indebted. But the common law always preserved existing rights. Upton v. Bassett, Cro. Eliz., 444. And it has always been true that a conveyance by one indebted at the time to the extent of insolvency, even to a child who pays no price, or one altogether inadequate and colorable, was void as against preexisting debts. Every eminent judge who has sat either in courts of law or equity for more than two hundred years past has had occasion to say so, and has said so. A gift by a person unable to pay his debts so directly and inevitably tends to delay and hinder the creditor, and so plainly violates the first moral duty — honesty — that the least regard to fair dealing and integrity imposes it upon the Court to pronounce it void. It must be so, if creditors are to have any security for their debts beyond the mere will of the debtor. Such a transaction is not to be looked on only as a means by which the intent to defraud may be inferred by a jury; (84) it must be. The act is altogether incompatible, and irreconcilable with a contrary intent. It is an act of fraud in itself. Whether the deed was, in point of fact, voluntary or not was properly left to the jury.

PER CURIAM. Judgment affirmed.

Cited: O'Daniel v. Crawford, 15 N.C. 203; Parish v. Sloan, 38 N.C. 611;Clements v. Cozart, 109 N.C. 180.