Ledford v. Emerson

143 N.C. 527
Supreme Court of North Carolina·Decided December 22, 1906·Published·Cited by 16 cases

Opinion

Walicjee, J.,

after stating tbe case: Tbe plaintiff alleges that tbe defendant collected tbe proceeds of tbe sale of tbe options, which amounted to $10,000, and that bis share was one-half or $5,000, from which was to be deducted tbe sum of $600 due by tbe plaintiff on tbe settlement, leaving $4,400 tbe clear balance coming to tbe plaintiff as bis share of tbe profits. So far tbe complaint shows only an indebtedness by tbe defendant to tbe plaintiff arising out of contract. But be further alleges that while be consented that the options might be taken in the defendant’s name, upon tbe assurance of tbe latter that it would facilitate the sale of tbe land and would not affect tbe stipulation as to the equal division of tbe profits, yet be now believes that all this was done with tbe intent to cheat and defraud him, and that tbe sale of tbe options by the defendant without tbe knowledge of tbe plaintiff and without disclosing tbe fact to him was made with a like intent, and further that tbe false representation by which be procured tbe receipt for $250 was also fraudulent and .made in furtherance of tbe original and continuing intent to deprive tbe plaintiff of bis just and equitable share of tbe profits, tbe plaintiff being at tbe time tbe defendant got the receipt an illiterate man. The plaintiff took a judgment [530] for the amount due him as his share of the profits and interest from 1 May, 1903, the time they were received by the defendant, upon an issue which finds that the defendant is “indebted” to him in that amount, “by reason of the matters alleged in the complaint.”

We have already held (140 N. C., 288) that the defendant could be arrested under an ancillary order and committed unless he should give an undertaking conditioned, as provided by the statute, to render himself amenable to the process of the Court during the pendency of the action and to. such as may be issued to enforce the judgment. But this is quite a different thing from imprisoning him under final process until he pays 'the debt or otherwise discharges himself from custody. The only provisions of the law relating to arrest and bail which can have any possible bearing on this case are substantially as follows: A defendant may be arrested where, as factor, agent, broker or fiduciary, he receives money or property and embezzles or fraudulently misapplies it, or where he is guilty of fraud in contracting the debt or incurring the obligation for which he has been sued, or when the action is brought to recover damages for fraud or deceit. Revisal, sec. 121. It is provided that an execution against the person of the judgment debtor shall not be issued, unless an order of arrest has been served, as provided by law, or unless the complaint contains a statement of facts showing one or more of the causes of arrest enumerated in the statute, “whether such statement of facts be necessary to the cause of action or not.” Revisal, sec. 625.

The Constitution provides that “there shall be no imprisonment for debt in this State, except in cases of fraud.” Art. I, sec. 16. This, we think, clearly means that there shall at least be no imprisonment to enforce the payment of a debt under final process, unless it has been adjudged, upon an allegation duly made in the compláint and a corresponding issue [531] found by a jury, that there has beeu fraud. Whether the fraud to which that section refers is one that is committed in contracting the debt, or extends to one that is collateral to it, such as the fraudulent concealment or disposition of property to evade the payment of the debt, is a question we need not now consider, though discussed by counsel. Whatever may be the nature of the fraud, it must be alleged and proved as any other issuable fact, and it is safer and better that when it is found by the jury to exist, it should be recited in the judgment, with a proper order or direction as to the issuing of executions to enforce it. The defendant is entitled in auy event' to have a finding by the jury upon this1 important allegation, before there can be any judgment that will warrant the issuing of an execution against his person.

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Ledford v. Emerson, 143 N.C. 527 (N.C. 1906).

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