Opinion · Supreme Court of North Carolina
Hawkins v. . Alston
Hawkins v. . Alston, 39 N.C. 137 (N.C. 1845)
- Type
- Opinion
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- Supreme Court of North Carolina
- Jurisdiction
- North Carolina
- Date
- 1845-12-05
- Topic
- litigation
Ruffin, C. J. If the grounds, upon which the bill impeaches the transactions between the defendants, be founded in facts, there cam be no hesitation in holding, that they amount to a fraud in law against the plaintiff, as a creditor. For no device can be more deceptive and more likely to bailie, delay, or defeat creditors, than the creating incumbrances upon their property by embarrassed men, for debts that are fictitious or mainly so. The false pretence of a debt, or the designed exaggeration of one, is an act of direct fraud.
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HAWKINSv. ALSTON,39 N.C. 137(1845)
JAMES B. HAWKINS v. MICAJAH T. J. ALSTON et al.
Supreme Court of North Carolina
(December Term, 1845.)
2. And more especially will the Court, when a bill is filed by a creditor to set aside such conveyance, refuse to admit the validity of the bond so attempted to be secured, when the parties, being particularly interrogated, decline or refuse to set forth, fully and sufficiently, what was the consideration of the bond.
3. A bond may be voluntary, and such an one, though binding between the parties, can not stand before other debts arising out of contracts for value.
4. Sales by execution must be made before the return of the writ, without respect to price, because the mandate of the writ is peremptory; but the obligations of a trustee are not precisely like those of a sheriff. A trustee under a deed of trust conveying property for the purpose of a sale to pay debts, is charged with the interests of both parties, and ought not, except under very special circumstances, to sell at an enormous sacrifice.
On 31 January, 1843, he defendant, Micajah T. J. Alston, by a deed, to which he and the defendants, Spencer H. Alston and Christopher B. Allen were parties, conveyed to the said Allen all his property, real and personal, consisting of eleven slaves, which he owned absolutely and in severalty, of (138) a negro woman named Caroline, of whom the said Micajah owned three undivided fourths, and the said Allen owned the other fourth, and of three other slaves, being a woman and her two children, which the said Micajah owned for the term of his life. The said effects conveyed, consisted further of all the said Micajah's household and kitchen furniture, namely, 4 beds, bedsteads, and furniture, a cradle and cradle bed, 2 tables, 1 press, 1 dozen chairs, looking glass, dishes, plates, knives and forks, cups and saucers, pots, pans, and ovens, and six old trunks: also, 3 head of horses, 8 head of cattle, 1 wagon, corn and fodder, 4 cows, and 21 pigs, and also the plantation on which Micajah lived, which he had leased for 1843, and a negro boy whom he had hired for the same period, and about 1,200 or 1,500 lbs. of bacon; upon trust to secure and pay certain debts therein recited, to be owing fromPage 107the said Micajah to the said Spencer, that is to say, one debt of $284.47, due by bond dated 20 July, 1841; one other of $54.34, due by bond bearing date 15 December, 1842; one other debt of $1,475.60, by bond bearing date 30 January, 1843, and payable one day after date; and one other of $408, or thereabouts, besides interest, due on a bond, given by the said Micajah as principal and Spencer as surety, to John H. Alston, which had then been due about a year; with power and directions to the trustee, in case Micajah should fail to pay all those debts on or before 1 March, 1843, at the request of Spencer, to sell the property to the highest bidder for ready money, having first advertised the time and place of sale fourteen days, and out of the proceeds of sale discharge the expenses and debts, and then pay the surplus to Micajah or his order. Spencer H. Alston is the brother of Micajah and Allen his brother-in-law.
At the time of making the deed, the defendant, Micajah, was indebted to the plaintiff, Hawkins, on his bond, then due, for $500, the price of land sold him; on which the plaintiff instituted suit, in which he recovered judgment in (139) October, 1843, for the principal sum, and $36 for interest, besides costs. The plaintiff then issued afieri facias, on which the sheriff returnednulla bonato April, 1844; and thereupon, the plaintiff filed this bill against the said Micajah and Spencer, and the said Allen, and therein states that he can not obtain satisfaction of any part of his debt, unless it be out of the effects so owned by Micajah and conveyed to Allen, and charges that the said conveyance was intended to delay and hinder him of the recovery of his debt, and prays that the same may be declared fraudulent and void against him, and that satisfaction may be decreed to him out of the property, or out of the proceeds or value thereof in the hands of Allen and Spencer H. Alston. The bill charges, that the value of the property conveyed was more than sufficient to pay all the just debts of the said Micajah, if fairly disposed of; but that Micajah declared, that he would never pay the debt to the plaintiff, and he executed the deed in question with the express intention to defeat the plaintiff, and upon a contrivance between the three parties to it to encumber and cover all Micajah's property with that view: And, as evidence thereof, the bill further charges, that the debts mentioned in the deed of trust were not due from Micajah to his brother Spencer, or, if any part of them was due, it did not exceed one-half the amount therein mentioned: And, furthermore, that in a short time after the deed was made, namely, on 10 April, 1843, while the plaintiff was prosecuting his suit, the defendants proceeded to make a pretended salePage 108of the property conveyed, at the residence of Micajah, in the country, without due notice, and when but few persons were present; and that, at the sale, the defendant Spencer purchased all the negroes and the other property without competition, and for very low prices, much below the true value, and not amounting to the debts recited in the deed. The bill charges, that the few persons who were present at the sale, were (140) induced not to bid by the belief, that the sale was a matter of family arrangement, and that such belief was produced by the contrivance and conduct of the defendants or some of them; and that in fact the defendant, Spencer, having no bid against him, purchased at his own prices, not exceeding one-third of the value of the property, and that, notwithstanding such ruinous sacrifices, the said Allen did not suspend the sale, nor did the said Micajah request him to do so, but the sale proceeded upon a previous design of those parties, until the said Spencer bought everything in, upon the terms mentioned. The bill further charges, that the purchases of the defendant, Spencer, were intended for the benefit of his brother Micajah and upon a secret trust for him, while the property should, at the same time, be covered from the claims of the plaintiff and his other creditors; and that, in fact, all the property or nearly all of it continued in the possession and enjoyment of the said Micajah after the sale as before, during the year 1843, and that then the defendants, Spencer and Micajah removed the slaves out of this State to parts unknown, and the said Micajah was preparing to remove himself and his family, and settling where the slaves had been carried. The bill further charges, that, if the said Spencer did not purchase wholly in trust for Micajah, yet that he did so, as to all the property that might remain after Spencer should, by resale of part of it, or otherwise, be satisfied for the debt really due to him, if any; and that he has been thus satisfied and yet holds slaves, money and other things in trust for Micajah, to a greater value than the principal money, interest, and costs due to the plaintiffs. The bill then specially interrogates the defendants as to the several matters charged, and, particularly, what debts Micajah owed Spencer, when and how contracted, and upon what considerations respectively: why Micajah conveyed so much property, being all he had, to secure the debt, if any, to his brother, when much less than half of it was of value sufficient, (141) if fairly sold, to pay the debts mentioned in the deed, even if the said debts were all just: what was the value of the several slaves and other property, what the said Spencer gave for them, whether the prices were not less than half thePage 109values, and how it happened that he was able to purchase at such a great under-value all the slaves and other effects: why Allen, the trustee, continued the sale, when he discovered the property was selling so greatly below its value: whether the sale was thus continued with the acquiescence of Micajah, or whether he made request to his brother or trustee to defer the sale until better prices could be had: And whether, in fine, it was not intended that Micajah should still have the enjoyment of the property purchased by his brother, or some part of it, and whether the purchase was not for the benefit of Micajah, either in whole or in part.
The defendants answered together. Allen, the trustee, states that he had no interest in the subject-matter of the controversy, and that he was merely trustee; that he supposed the debts mentioned in the deed to be true debts, and that, after due advertisement at several public places, he made the sale, for the purpose of satisfying those debts, upon the terms prescribed in the deed. All the defendants state that it was conducted in the usual manner of sales to the highest bidder for ready money, and fairly, and without any attempt by any or either of them to prevent competition or induce other persons not to bid. They annex to their answer an account of the sales of the property, from which it appears that the defendant Spencer purchased everything that was sold, at prices, which amounted in the whole, to the sum of $1,740.50. The price of a woman Hester and her child was, for example, $250; that of a boy Trim, $22; that of three-fourths of Caroline, $150; that of a boy George, $50; those of woman Grace and her two sons, for the life of Micajah, $125; and those of other negroes in proportion. The prices of four beds, bedsteads and furniture, amounted to $17.50; of a wagon and harness, $10; of three horses, (142) $15; and 8 head of cattle, $10; and of 500 lbs. of bacon, $20. The answer admits that the prices might be something below the value of the property, but not so much below it as is charged in the bill.
The defendants, Micajah and Spencer, state, that the debts from the former to the latter were due upon bonds, as described in the deed; and that said bonds were executed in part for moneys advanced by said Spencer, at different times, either as loans to said Micajah, or to pay debts for him, or for debts for which the said Spencer was bound as surety for Micajah; all of which they aver were justly due and remained unpaid at the time of executing the said deed of trust. They further answer, that the conveyance was made with the view of certainly securing the payment of those debts, and not to cover Micajah'sPage 110property or to defeat the plaintiff or any other creditor: And they deny that Spencer purchased any part of the property, upon any secret trust, or otherwise; for the use or benefit of Micajah, or that there was any agreement or understanding to that effect, either when the deed was executed, or at the sale, or at any other time; and they say that Spencer purchasedbona fidefor his own use and benefit alone, and that the defendant Spencer is under no promise, nor in any way bound, in consequence of his purchases, to render any aid or assistance to his brother Micajah, but that such aid and assistance as he may render him, will be voluntary on his part.
Replication was taken to the answer, and the parties proceeded to proofs. It was sufficiently established that notice was given of the time and place of sale as required in the deed; and that the whole sale took place at the residence of Micajah Alston, in Halifax, and was attended by about five and twenty persons, among whom were three persons, Mr. Bachelor and Mr. Marcus A. Allen, and Mr. J. N. Faulcon, who were (143) creditors of Micajah Alston — of whom the former has not, and the two latter have been, examined in the cause. One or two low bids were made during the sale by other persons, but there was no serious competition against Spencer Alston for anything, and he purchased all at the prices specified in the account of sales set forth in the answer. Four or five witnesses, who were at the sale, say that they saw nothing unfair in conducting it, and that the articles were exposed and cried openly and sufficiently, and that there were some persons present, who pursued the business of buying and selling slaves, and that no persuasions or other means were used by either of the defendants, as known to or discovered by the witnesses, to induce any person not to bid. Two witnesses for the plaintiff state, however, that an impression prevailed in the company, that the property was to be purchased, in part at least, for the benefit of Micajah Alston, and one of those witnesses, Marcus A. Allen, says that was his own impression, produced from the manner of sale, and from the declaration of Micajah to him, "that he might rest satisfied; for notwithstanding the sale, his debt should be paid" — which prevented him from bidding. All the witnesses state, that the property sold very low, and several of them say, for not more than half price. W. Skinner, a witness for the defendants, deposes that he was present at the sale, and that, as far as he is a judge of sales, this was fairly conducted. But he says the negroes sold very low; that, before he left the place he gave Spencer Alston $337.50 for three-fourths of Caroline, for whom the latter had given thatPage 111day $150; that the negroes, to which Micajah was entitled in severalty and absolutely, were worth $2,050, and that the woman and two boys (of whom one was 13 years old) to which he was entitled for life were worth $800 dollars, if he had owned the absolute property; that Micajah continued in possession of all the negroes and other property, except Caroline, until the latter part of 1843, when Spencer Alston sold to the witness, Hester and her child, at the price of $500, and (144) the boy Trim at the price of $400, and sold another woman and child to some other person, but at what price he did not know; and that he sent the remaining negroes, except one, to the South, by John Alston, a brother of the parties, and that one was taken by Micajah, who also removed from this State, but to what parts the witness does not know.
The defendants also offered evidence of the debts mentioned in the deed of trust. That, to John H. Alston is admitted by the plaintiff, and appears to have been due on a bond for $404.86, dated 19, October, 1841, given by Micajah and by Spencer as his surety, and to have been paid by Spencer, 14 June, 1844. The defendants further proved three bonds given by Micajah to Spencer, of the dates and for the sums mentioned in the deed. Neither of them has a subscribing witness, and the proof is by the handwriting of the obligor. It is established that the defendant Spencer, on 9 March, 1841, gave his bond to Yarborough and Perry for a store account or bond of $239.83, which Micajah Alston owed them, and that he paid it in August following. It is stated by several witnesses, that Micajah was a younger brother of the defendant Spencer, and that he made Spencer's house his home for about four years, from 1834 to 1839, except about one year, during which he was absent in Mississippi in 1837 or 1838, and that, just before he set out on that trip, he purchased a horse from Spencer at the price of $150; and that in 1841 or 1842, after Micajah's marriage, he purchased a horse from another person at the price of $175, to discharge which his brother Spencer advanced $75, and gave his note for the residue, as Micajah told a witness. It is also stated by two or three witnesses, that Micajah Alston said that, when he wanted money, he was in the habit of applying to his brother Spencer and that he supplied him, and that sometimes Micajah said, he owed his brother (145) a large debt and then would deny that he owed him much.
Another is, that property, to a much greater value than the alleged debt from one brother to the other, was conveyed, and that this was done with the design, that, before the plaintiff could get a judgment, the property should be brought to a sale, so conducted as to enable the defendant, Spencer, to buy it at prices far below its value, as a mode by which; under the form of a public sale,prima faciefair, the one brother's property could become vested in the other, without an adequate valuable consideration, or by which the one should get the title, apparently for himself, but in reality upon some confidence for the maker of the deed. And there can be no doubt, allowing, even the whole debt mentioned in the deed to have been owing, that the conveyance of property to secure it, and with the further intentions supposed, would be fraudulent, for the want ofbona fides. It would be an attempt by a debtor, so far as the value of the property exceeded the debt, indirectly to convey it to a friend, voluntarily and without valuable consideration; or, in the other point of view, it would be a conveyance (146) to enable the creditor, under cover of obtaining payment of his debt, to make purchases either wholly, or in part, upon a secret trust for the debtor. Such a contrivance, if directly proved, amounts to express fraud; and, if to be fairly collected from the conduct of the parties, and the attendant and subsequent circumstances, the same consequences must follow. It is calculated to deceive the world by putting the title out of the debtor, and vesting it in the purchaser, pretendedly for the sole use of the latter, so as to exempt the property from execution, while the debtor is to enjoy, in some way, a benefit from the profits, or, perhaps, the possession of at least part of the property. It is, then, to be considered, whether the allegations of the bill are sustained by proofs or rational presumptions.
Upon the point of the indebtedness of Micajah Alston to his brother Spencer, the Court is obliged to say, the defendants have not given satisfactory evidence; and that there are veryPage 113strong grounds of suspicion against it, and especially, as to its amount, or anything near it. The debt to John H. Alston, for which Spencer was surety, appears to have been nearly as stated in the deed. That is the only debt, the origin and amount of which are established with any certainty. The others are stated to be due to Spencer himself, on three bonds, as follows: One, of 20 July, 1841, for $284.47; a second, 15 December, 1842, for $54.34; and the third, of 30 January, 1843, for $1,475.60 — making, in all, the sum of $1,814.41. The bonds have no subscribing witness, and are proved merely by the handwriting of the obligor. The deed was executed on the day after the last bond was given.
Transactions of this kind, between near relations, are naturally so much more the objects of suspicion, than those between strangers, that it is to be expected that parties, when father and son, or brothers, should offer something more than the naked bond of the one to the other, as evidence of the (147) alleged indebtedness, especially when the bond is executed recently, and followed immediately by a deed of trust for all the debtor's property. A bond may be voluntary, and such an one, though binding between the parties, can not stand before other debts arising out of contracts for value. Rev. St., Ch. 50, sec. 1;Lachmere v. Earl ofCarlisle, 3 Pr. Wms., 211;Jones v. Powell, 1 Eq. Cas. Abr., 84. Indeed, it may be fabricated for the occasion of creating the encumbrance, as an obstacle tobona fidfiecreditors. Therefore, all persons may be called on to offer some probable proof of dealings, out of which a debt might have arisen to the amount of the bonds produced or approaching it; and, especially, persons very nearly connected ought to be provided with stronger evidence on those points. It is an act of but common precaution, which every man owes to his own character, when a bond is executed between brothers for such a sum as $1,475.60, under such circumstances, and upon a settlement, as alleged, for previous dealings running through several years, that the parties should come to their settlement in the presence of disinterested third persons, capable of understanding and proving what, in fact, were the subject-matters of the settlement, so as to afford other creditors the opportunity of investigating the correctness both of the charges and the credits in it. Indeed, in the ordinary course of business, no one lets accounts run up to such sums without some entry in a book or some statement of the items on paper. It can hardly be possible, that all the items in dealings for so long a period as nine years, from 1834 to 1843, should have all been on one side. Therefore, some account must have beenPage 114stated between these parties, as the basis for the bond of $1,475.60; which the defendants ought to have been able to identify by an indifferent witness, or, at least, to have produced and verified by their own oath. But there is no witness to that point, nor document of that kind; which certainly (148) could not fail to excite surprise, as very extraordinary, if the settlement was a real settlement between debtor and creditor, in which each stood up for his rights. Instead of that, there is nothing but the three bonds; neither of which was ever seen, or heard of by any one else, as far as appears, until the execution of the deed. There is an attempt, however, to prove by witnesses, that there have been, in former times, some dealings between the brothers, on which Micajah became the debtor of Spencer. It appears, that in March, 1841, the latter did assume for the former, a debt to Yarborough and Perry for $239.83. We are not informed why that was done. It does not appear that the creditors suspected Micajah's credit, but merely that Spencer took the debt on himself. The legal inference would be, perhaps, that he was thereby paying a debt of his own to his brother. But admit it to be otherwise; and that may account for the first bond of $284.47, of 20 July, 1841. If that bond included the payment to Y. and P. the debt may be assumed to be that far just. But there the case hangs, we believe. There is no probable proof to uphold the other bonds. It is, indeed, stated that, in 1841 or 1842, Micajah purchased a horse in the neighborhood for $175, and that he said his brother lent him $75 at the time for a payment in part, and gave his bond to the seller for the residue. But no reason has been given, why the seller of the horse has not been examined to prove these facts, instead of relying on Micajah's declarations alone. Again it is stated, that, between 1834 and 1839, Micajah lived in his brother's family about four years, for which $500 would be a moderate charge, and that, in 1836, or 1837, he purchased a horse from Spencer at $150. Upon that, several observations may be made. It does not appear that Spencer intended to charge board. Nothing was ever said by either of the brothers to that effect. If Spencer intended to make the other pay for board. as he, no doubt, did for the horse, it is hardly possible that (149) he should have waited until January, 1843, without receiving any payment on account, or taking a bond for those demands, as he had, in the meanwhile, done for the other of $284.47. It must strike one, therefore, as highly probable, that there were mutual dealings, and those demand — if that for board ever existed — were satisfied in account. ButPage 115there is another objection to all these last items, which is insuperable under the circumstances. It is, that the defendants, who knew the fact perfectly, and were called on to state it on this point particularly, would not venture to swear in their answers, that any part of the sums for which the bonds are given, was for the horse sold, or for board. The bill charges, that the debts, or the greater part of them, were not really owing, and therefore, that the principal bond of $1,475.60 was devised of express covin; and it proceeds further to interrogate the defendant specially, what debts Micajah owed Spencer, when and how contracted, and upon what considerations. Now, although the defendants had been incautious enough to act without a witness to their dealings, yet, when the opportunity was thus afforded them for offering full explanation, and making their answers, responsive to the charges and interrogatories of the bill, evidence for them, one could not have expected less than that they would have gone into the matter, in detail, stated the account on both sides particularly, and accounted for the delay in taking the bonds. But instead of such a narrative, not equivocal nor evasive, but full and direct, as they could have given, and, if the bonds were fair, would probably have given, the answer only states that the debts were due upon bonds, as described in the deed; that they were justly due, and remained unpaid when the deed was executed; and that "the said bonds were executed in part for money advanced by said Spencer at different times, either as loans to Micajah, or to pay debts for him, or for debts for which the said Spencer was bound as surety for him." It is obvious, that this is no answer (150) to the points on which the discovery was sought. The defendants say the bonds were unpaid; and no doubt that is true. They say also, that they were justly due; which may likewise be true, in a certain sense — that is, as between themselves, although they were in the main voluntary bonds. The true inquiry is, whether the debts were justly due as opposed to other debts, that werebona fide;that is, whether they were true debts that arose entirely upon real contracts. And upon that essential point, the answer is. "that the bonds werein partfor money lent or advanced." But what part, to whom it was paid, or when is not disclosed; and for the other parts of the debts, besides the money, the answer assigns no cause but the bonds themselves. Five shillings lent or paid by Spencer, would satisfy the answer and save the defendants from the penalties of a false statement, touching the considerations of these bonds. There is no suggestion that the price of board or of a horse was included in them. The defendants wouldPage 116not make that statement, and therefore they can not ask the Court to give them the benefit of remote probabilities founded on the testimony of witnesses with imperfect information on the subject, when they, themselves, in whose knowledge the whole matter is, refuse, though demanded, to give any answer whatever. They do not even attempt to explain why the bond for the small sum of $54.84 was taken so recently as 15 December, 1842, if at that time, the pretended debtor owed the other large debt of $1,475.60, for which he gave a bond 30 January, 1843; nor is it intimated that this large debt arose upon any intermediate transactions.
The truth is, then, that there is not evidence, upon which a rational reliance can be placed, to sustain the debts of $54.84, and $1,475.60. The bonds themselves, being executed to a brother by an embarrassed man on the eve of insolvency, as alleged by the parties, and with a view to found on them (151) an immediate conveyance of all his property, are entirely insufficient to establish thebona fidesof the debt, and require the aid of extrinsic proof of the probable justice of it, which does not exist in this case.
The opinion of the Court on the foregoing point is sufficient to dispose of the case. But we think it our duty to the cause of fair dealing and the justice due to creditors to say, that our opinion is equally strong against the defendants upon the other parts of the case. There are seldom collected more circumstances, than are here presented, of grave suspicion, that the deed and sale under it were notbona fide, with the intent to pay a debt, but, under color thereof, to provide for the grantor through favor of the preferred creditor; or, at all events, to defeat another creditor, as one of the primary motives for making the deed. The debtor and creditor are brothers; the trustee is a brother-in-law; the deed conveys everything the grantor had on earth, down to his wife's bed and his child's cradle, and the most trifling articles, as old trunks; with a provision for an early sale, before the present plaintiff could recover his judgment; an actual sale in little more than two months, at which everything was, without complaint on the part of the debtor, bought by the secured creditor at grossly inadequate prices; and, with the exception of one negro woman, the former owner retained possession of all the property for about eight months after the sale, when the plaintiff was getting into a situation to seize it; and then some of it was sold to third persons and the residue party spent by Spencer Alston and partly carried by Micajah out of the State. These facts, which are unquestionable, raise a conclusive presumption in a mind,Page 117at all familiar with real fair dealings among mankind, that the conveyance was made for the purpose of turning over the debtor's property without an adequate consideration to his brother, thereby to defeat other creditors, and, probably upon a secret confidence for himself, to some extent at least. The subsequent possession and enjoyment of the property by the debtor serves strongly to establish those intents. It (152) is not now held to be conclusive of the fraud, as a matter of law it is true. Nevertheless, it is a very cogent sign of bad faith in every case, and in the present case is in the highest degree evidence of it. A person may naturally enough convey property to secure a particular creditor, from whom he wishes forbearance, in the hope of paying the debt without a sale. So a person, who is insolvent, may probably assign his property with a view to an immediate sale, where a number of creditors are provided for, whose interest it will be to compete in bidding. so that the effects shall bring their value and exonerate the debtor as far as possible. But here is a case, which shows views of the parties of quite a contrary nature from either of the foregoing. There was but a single person provided for, and that by means of a deed authorizing a sale at a very short day. Why was that? If the object was really to pay the debt, and nothing more, why did not the parties at once agree upon a sale, at a fair price, of enough for that purpose? The reason for an assignment of the whole property, instead of a sale of part, upon those terms, is but too easily given. If there had been a sale at fair prices, there would have been a residue of the property left in the debtor, and exposed to execution. If it had been at grossly inadequate prices between brothers, it would have been easily questioned, and could not stand the trial, especially where the pretended debtor retained the enjoyment after the alleged sale. But sales to the highest bidder have an appearance of fairness as to price, which renders it more difficult to ferret out a fraud in them; although it is obvious that a preferred creditor has a great advantage over other bidders, by not being obliged to advance money at the time, and if he can collude with the trustee, by fixing the time and place of sale; and the retaining of possession for a period is not so conclusive of a secret trust. The sale under a deed of trust may thus really be devised, as a better cover and mode of effecting a conveyance to the creditor at an undervalue, or in secret trust for the debtor. Such a motive for this (153) deed, as it appears to the Court, must be inferred from the circumstances under which it was executed, its provisions in favor of a single person, and for so speedy a sale, the modePage 118of conducting the sale, and the continued enjoyment by the debtor afterward. Spencer Alston bought everything; and, according to the evidence, at about half price, or less. That is beyond contradiction; for, within that year, he sold four negroes for $1,237.50, for which he gave $620; and one of them he sold on the spot for $337.50, for which he gave $150. Now, this is said, in the answer, to have been a fair sale; and it is called so, because it was a public sale, and neither of the parties persuaded persons not to bid. The witnesses, for the same reasons, say, that as far as they are judges of such matters, it was fair. But they must estimate the morals involved in such cases, very loosely, if they hold this transaction fair. It is true, that sales by execution must be made before the return of the writ, without regard to price, because the mandate of the writ is peremptory. But the obligations of a trustee are not precisely like those of a sheriff. He is selected by the parties, and is charged with the interests of both, and ought not to sell at an enormous sacrifice, as in this case — at all events, he ought not, unless under very special circumstances. Now, suppose the present plaintiff and the other creditors of Micajah Alston had been secured in this deed, instead of Spencer Alston; would Micajah have stood by, a silent and heedless spectator of a sale, at which the creditor was buying, without competition, at his own half prices, all the property he meant to take and keep? Would he not certainly have urged the trustee to adjourn the sale to some time and place where bidders might be had? And would not the trustee — an impartial and fair man, not to speak of his being a brother-in-law — as certainly have done so? Then, why was not (154) this sale stopped? The answer is plain: the sale was going on precisely as the debtor, the creditor, and the trustee — all three near relations — wished, and from the beginning intended it should. So far from complaining of the ruin brought on him, Micajah Alston said to one of his other creditors, who is the only one examined to the point, that, notwithstanding the sale then proceeding, he would pay his debt, and accordingly he still kept the property, and thus had the means of paying him, if he would. Micajah Alston was unquestionably willing that his brother should purchase at the prices he did, and that the spectators felt and acquiesced in, rather than offend neighbors. It is impossible that Micajah Alston could have been willing to such a sale, if it had not been to his brother, and if he had not expected a benefit from it, and to defeat the present plaintiff. The witnesses may, perhaps, have meant, when they called it a fair sale, that it was so in respectPage 119of Micajah Alston, as he assented to it. But as respects that person's creditors, it was not a fair sale, but a most unfair one — devised and conducted with the view of disposing of his property, not at a fair price in satisfaction of a just debt, but, under cover of a sale for that purpose, to get the property, or much of it, into the hands of his brother for his own use. It is true, these defendants deny, that there was any agreement or understanding between them, that Spencer should purchase in trust for Micajah, or that he is bound or under promise to render him assistance; and they say that such assistance is altogether voluntary. No doubt that is in form, at least, true; for there never is, upon such occasions, a plain and express declaration of trust, which, indeed, would defeat the objects in view by placing in the debtor an admitted interest, that would plainly be subject to his debts. Therefore, the purpose always is, that the purchaser shall appear to be the exclusive owner, and that the rights of the grantor shall rest in mere personal confidence between the parties, and dependent upon the pleasure of the grantor. It is that very circumstance that constitutes the fraud, where it is collected that the deed (155) was made, because the grantor thereby expected a profit or benefit to himself from such pleasure and favor of the grantee; while his creditors can not reach that interest in any way. And the facts attending the sale, and the subsequent enjoyment of the property by the grantor, naturally reflect back on the previous parts of the transaction, and open to view the motives for making the deed.
The deed must, for these reasons, be declared fraudulent and void, as against the plaintiff. As parts of the property have been sold by the defendant, Spencer, for more than sufficient to pay the plaintiff's debt, and the residue removed beyond the process of the law, and Micajah Alston is insolvent, except in respect of this property, and has removed from the State, the plaintiff is entitled to a decree against the defendant Spencer, directly, for payment of the principal, interest and costs of his judgment at law; which may be ascertained by an inquiry. We suppose this will be sufficient, as there is no suggestion to the contrary. But, if the money should not be raised from him, liberty is reserved to the plaintiff to move for further directions in respect to the liability of the defendant, Allen. The defendants must pay the costs.
PER CURIAM. DECREED ACCORDINGLY.Cited; Satterwhite v. Hicks.44 N.C. 109;Taylor v. Dawson,56 N.C. 91;Tredwell v. Graham,88 N.C. 213;Clement v. Cozart,112 N.C. 422;Friedenwald v. Sparger,128 N.C. 449;Yarborough v. Hughes,139 N.C. 210.Page 120