Wolfe v. . Arthur ( 1896 )

The issues are set out in the opinion of Associate Justice (898) Avery.

Judgment upon the verdict for plaintiffs. Appeal by defendants. The issues submitted, and the responses thereto by the jury, were as follows:

1. "Did the defendant Arthur transfer, sell or dispose of his property, described in the complaint, with intent to hinder, delay or defraud his creditors or any one of them?" Answer: "Yes."

2. "Did defendants, Collins and Allison, or either of them, have notice of such fraudulent intent on the part of defendant Arthur?" Answer: "Yes."

The court instructed the jury that if they believed from the testimony that the defendant Arthur sold, transferred or assigned the property described to defendants Collins and Allison with intent to hinder, delay or defraud Smith in the collection of his judgment, they should respond to the first issue in the affirmative. Counsel for defendant rested his argument mainly upon the contention that the finding upon the first issue should, like that in answer to the second, have been made to depend upon the intent of Collins and Allison as well as that of Arthur. In a subsequent portion of the charge the judge told the jury, in substance, that even though their answer to the first issue should be "Yes," the burden would still rest on the plaintiff to satisfy them that the defendants Collins and Allison had actual notice of the fraud or notice of such facts as would induce any prudent (899) man to institute and prosecute inquiries that would have led to the discovery by them of the covinous purpose of Arthur.

It is settled law in North Carolina that a sale or mortgage for a valuable consideration may be upheld as valid, though the seller or mortgagor intended by the transaction to delay or defraud his creditors, where it is not shown that the purchaser or mortgagee participated in the fraudulent purpose. Battle v. Mayo, 102 N.C. at p. 440; Beasley v. Bray,98 N.C. 266.

It was not error to tell the jury that fraud, in law, does not always necessarily involve a corrupt or dishonorable intent on the part of the person to whom it is imputed. The knowledge on the part of a purchaser of the seller's purpose to perpetrate a fraud on his creditors is thus held to vitiate a sale, though the intent of the former was to secure an honest debt due him. While appellant's counsel did not abandon other exceptions, they were not insisted upon. A careful review and consideration of the exceptions discloses no merit in any of them. There is no error in the specific mention by the judge in his charge of suspicious circumstances, and the instruction that the jury might consider them in connection with all other circumstances as bearing upon the question of intent. The testimony referred to tended to excite suspicion and to show certain badges of fraud which challenged inquiry without raising an actual presumption of a fraudulent purpose. Bank v. Gilmer, 116 N.C. 684. There was no error, and the judgment is

Affirmed.

Cited: Calvert v. Alvey, 152 N.C. 613.

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