Booth v. . Carstarphen

12 S.E. 375, 107 N.C. 395

• Court: Supreme Court of North Carolina
• Decided: September 5, 1890
• Status: Published

Opinion

Mereimon, C. J.

after stating the facts: A deed like that in question here may be necessarily void because of fraud appearing upon its face from its vitiating provisions and purposes. This is so when the facts constituting the fraud so appearing are so manifest and of such vitiating character as that they of themselves imply fraud that admits of no explanation or conclusion to the contrary. In such case, it is the province and duty of the Court to declare and adjudge the deed fraudulent and void whenever the same shall come before it for adjudication. The reason is, that the facts so appearing necessarily imply the fraudulent intent and character of the deed, and the Court simply applies the law.

There are other cases where, in such a deed, one or more of its provisions and purposes, apparently and prima facie, imply fraud and the fraudulent intent and purpose of the maker thereof. In such case the law raises the presumption that the deed is fraudulent, and therefore void, and this presumption will prevail and destroy the efficacy of the deed, unless a party claiming benefit of it shall rebut the presumption by proper evidence, proving that the supposed vitiating provisions were not such in fact, but lawfu', and such as might properly be made and have effect. The rebutting facts proven must be such as that, if they appeared in appropriate connection in the deed, they would so explain and modify the provisions thereof, prima facie and of themselves fraudulent, as to render the deed, upon.its face, free from fraudulent intent and purpose. The presumption of fraud may be rebutted, because the provisions of the deed, apparently fraudulent, and to be so treated in the absence of satisfactor}7 explanation, do not necessarily and conclusively impty fraud — they admit of possible explanation that may render them valid. Hardy v. Simpson, 13 Ired., 132; Starke v. Etheridge, 71 N. C., 240; Cheatham v. Hawkins, 76 N. C., 335; same case, 80 N. C., 161; Holmes v. Marshall, 78 N. C., 262; Boone v. Hardie, 87 N. C., 72; Moore v. Hinnant, 89 N. C., 455; Hodges v. Lassiter, 96 N. C., 351; Beasley v. Bray, 98 N. C., 266; Phifer v. Erwin, 100 N. C., 59; Brown v. Mitchell, 102 N. C., 347; Woodruff v. Bowles, 104 N. C., 197; Bobbitt v. Rodwell, 105 N. C., 236.

The fraudulent intent of a party charged with fraud in any transaction or matter appears- from, and must be determined by, acts done or omitted to be done — their nature, connections, purpose and effect in contemplation of law. Such intent does not depend upon nor consist in, nor is it to be ascertained from simply the thought and purpose of the mind, but it depends upon,' and is to be ascertained from such thoughts and purposes evidenced and manifested by and taken in connection with the acts done or not done, and pertinent facts and circumstances. It is the act or thing done or not done that gives cast, quality and character to the thought and purpose of the mind — the intent — and of this the law takes notice. The law cannot lay hold of and deal with the simple inactive .intent of the mind; it knows and regards the intent as it appears to have distinctive character from what is done or not done in any transaction. It is therefore that a deed must be adjudged fraudulent and void when a provision or stipulation in it necessarily and conclusively implies its fraudulent character. Hence, too, when a provision in it raises the presumption that it is fraudulent, the law implies the intent, and the Court must adjudge the deed void unless the presumption shall be rebutted. And such presumption cannot be rebutted by the mere fact that the thought, the simple intent, of the mind of the party charged with the fraud had no actual intent of his mind to perpetrate the same. He must, produce evidence to prove pertinent facts — something done or not done — and facts and circumstances that in their nature, connections and bearings give cast, character and direction to the intent of the mind, as expressed in them, and show that the provisions of the deed supposed and presumed to be fraudulent were not so in contemplation of law, but really lawful. A party cannot be allowed to say that he did not really intend to perpetrate a fraud or do a fraudulent act, when the plain, necessary, natural and legal consequences of his acts are fraudulent in contemplation of law. Cheatham v. Hawkins, 80 N. C., 161; Boone v. Hardie, 83 N. C., 470; same case, 87 N. C., 72; Phifer v. Erwin, 100 N. C., 59.

The purpose of the deed before us in question purports to be to convey the land described therein to the trustee, to secure the payment of certain debts specified to the creditors therein named. At and before the time it was executed, the rn&ker thereof was much embarrassed financially, wholly insolvent, and owed debts other than those provided for in it. It was executed on the 15th of January, 1884, and the power of sale provided therein could not be executed by the trustee until after the first day of January, 1886. It contains, among other provisions, one in these words: “And it is further covenanted and agreed by and between all the parties to these presents, that, in the meantime — that is to say, from the date hereof to the day of sale — the said party of the first part shall be entitled to live on the land, and to take, use and apply the rents, issues and profits, and every part thereof, to his own use and benefit.” The deed further reserves to the maker thereof his right of homestead, and, as well, his personal property exemptions. If all these facts appeared on the face of the deed, it would be so manifestly and essentially fraudulent that the Court would at once declare it void as to creditors other than those claiming benefit under it. But, although some of the material facts do not so appear, still the insolvency of the debtor— the maker of the deed — at the time he executed it; that he owed debts not mentioned in it; that the trust could not be closed for two years; that he reserved his right of homestead in the land, and his right of personal property exemptions; that pending the trust, he was to have the right to live upon and have the rents and;, profits thereof, clearly raised the strong presumption,that the deed was fraudulent, an’d, if such presumption was not rebutted by proper evidence, then the Court should havé declared the deed void. This is so clear that we need not delay to point out the reasons that lead us to this conclusion. These are fully stated in the cases cited above,'and many others in our own reports; and elsewhere. Indeed, this seems „to be hardly denied.

But it is contended that “the plaintiff admits, that in making the deed in trust to Boone there was no actual intent to defraud the creditors of Carstarphen, Grant & Co.,” and, therefore, the deed is not fraudulent. This contention is not well founded. The provisions mentioned of the deed, and the attendant pertinent facts Admitted, manifest, give character and point to the intent, and imply, in legal contemplation, the fraudulent purpose of the maker. The mere fact that he had “ no actual intent” to defraud the creditors named, the absence of which was unexpressed and was not made manifest by acts done, or not done, and pertinent facts and circumstances explanatory of, and modifying the meaning of the facts constituting the apparent fraud, and thus showing the lawful intent, could not rebut the presumption. This could be done, not by mere absence of special fraudulent purpose of the mind, but by intent made manifest by pertinent facts and circumstances, which, iaken in connection with, and in their just bearing upon, the facts raising the presumption, show an honest and lawful purpose.

In Hardy v. Skinner, 9 Ired., 191, it was admitted that the plaintiff “did not impute any actual,fraud to the parties other than what appeared from the deed itself; but he insisted that the deed was, upon its face, fraudulent in law, no matter what the defendant might' show, and that the Court was bound so to pronounce.” The Court said, that “although this is a singular and extremely suspicious trans action, yet this Court thinks the plaintiff gave up his case by admitting that there was no fraud in fact, and that everything might be taken in favor of the deed which could show that it was bona fide.” The present case, it seems to us, is very and materially different from that one. There, the plaintiff insisted that the evidence of fraud appearing on the face of the deed could not be explained or modified, and that it was essentially and conclusively fraudulent. So insisting, he admitted that there was not “any actual fraud of the parties.” Hence, the Court said justly, “that everything might be taken in favor of the deed which could show that it was bona fide.” The admission was so broad that the Court treated the case as if the defendant had produced appropriate and sufficient evidence to rebut the presumption of fraud. But in this case, the admission is “there was no actual intent to defraud,” etc., not that there was not “any actual fraud.” If it had been proven, instead of admitted, that the defendant maker of the deed simply had no “actual intent to defraud,” this could not be evidence to disprove the fraudulent intent manifested by acts, facts and circumstances which the law could take notice of and deal with. Nor can it be fairly insisted that the admission of “no actual intent to defraud,” etc., should be treated as an admission that the defendant could prove such facts as would, in their nature, bearing and effect upon the evidence raising the presumption, show the absence of a fraudulent intent and a lawful purpose. It is very apparent the admission was not intended to have such broad and comprehensive meaning. It meant no more than that the maker of the deed had “no actual intent to defraud,” without reference or regard to his intent coupled with, and made manifest by, what he actually did. The mere intent of the mind could not rebut the intent accompanied and manifested by, and implied from, acts done.

The facts agreed upon, so far from rebutting the presumption that the deed in question is fraudulent, and on that account void, seem to strengthen it. Clearly, in contemplation of law arising upon the facts admitted by the parties, the purpose and effect of it was to hinder and delay the creditors not mentioned in the deed, and to provide, to their prejudice, for the ease, convenience and valuable advantage of the debtor.

We are, therefore, of opinion that-the Court should have adjudged that the deed was inoperative and void, and given judgment in favor of the plaintiff for the possession of the land.

There is error. The judgment must be reversed and judgment entered for the plaintiff, in accordance with this opinion. To that end, let this opinion be certified to the Superior Court. It is so ordered.

Error.