Chas. M. Betts & Co. v. Richardson , 112 S.C. 279 ( 1919 )

July 15, 1919. The opinion of the Court was delivered by This is an action to set aside a deed for fraud. B.B. Richardson, the husband of the defendant-appellant, was the owner of a lot of land in the city of Florence, and procured lumber to build a house thereon from the plaintiff on the 8th of November, 1913. Mr. Richardson executed a note for the lumber. On the 20th of December, 1913, he executed a deed of the improved lot to his wife, the defendant-appellant, stating a nominal consideration of $10. The record does not show that even the $10 was paid. The note was not paid at maturity. On the 20th of April, 1914, judgment was obtained on the note by default. Execution was issued and a return of nulla bona secured, and this action was brought to set aside the deed for fraud.

The issues were referred to a special master, who found that, while there was no moral fraud, yet that the deed was voluntary, and as its effect was to hinder, delay, and defeat creditors, it was void, and recommended its cancellation. To this report exceptions were taken. The case was heard before Judge Shipp, who confirmed the master's report. From the decree of Judge Shipp this appeal is taken, upon four exceptions.

1. The first exception complains of error in finding that the grantor, B.B. Richardson, was insolvent at the time of the conveyance. This exception cannot be sustained.

The case of Jackson v. Lewis, 34 S.C. 6, 7, 12 S.E. 560,562, is conclusive:

"A voluntary deed may be set aside at the instance of an existing creditor upon the ground of constructive or legal fraud, even where there is not the slightest taint of actual or moral fraud in the transaction, under the principle that the law requires that one must be just before he is generous. The law will not permit one who is indebted at the time to give his property away, provided such gift proves prejudicial to the interest of existing creditors. The motive which prompts the donor to make the gift is wholly immaterial. If the donor is indebted at the time, and the event proves that it is necessary to resort to the property attempted to be conveyed away by a voluntary deed for the purpose of paying such indebtedness, the voluntary conveyance will be set aside and the property subjected to the payment of such indebtedness, upon the ground that it would otherwise operate as a legal fraud upon the rights of creditors, even though it might be perfectly clear that the transaction was free from any trace of moral fraud."

2. The second exception complains of error in holding that the deed was voluntary. There is no evidence in the record to show that there was a valuable consideration. It is true the appellant paid off some incumbrances, but the record fails to show that there was an agreement that the appellant should assume them. The grantor simply conveyed the lot subject to incumbrances. That the appellant did pay off some incumbrances to free her property was purely voluntary on her part, and, so far as the record shows, without any agreement with the grantor. This exception cannot be sustained.

3. The third exception complains of error in not holding that the judgment on the note did not contain the certificate to the effect that the judgment was obtained for the purchase money of the property, or for improvements thereon. The decree in this case does not make the finding, and the respondent is now seeking to enforce this judgment, and it is the Court that gave the judgment by default. This exception cannot be sustained.

4. The fourth exception complains of error in not finding that the expenses of the last sickness and burial expenses paid by the appellant has priority over the judgment of the respondent. The record shows ample funds derived from the sale of personal property to pay the funeral expenses. This charge is payable primarily from the proceeds of sale of personal property, and the question does not arise in this case.

Judgment affirmed.