Garland v. Arrowood, 179 N.C. 697 (1920)

May 5, 1920 · Supreme Court of North Carolina

179 N.C. 697

P. W. GARLAND, Trustee v. L. C. ARROWOOD et al.

(Filed 5 May, 1920.)

Bankruptcy — Betterments—Measure ot Damages — Statutes.

The trustee of one who has been adjudged a bankrupt and has theretofore paid money for improvements put upon the lands of another with .his consent, in fraud of the rights of his creditors, may recover as for betterments, the value of the improvements to the land, but not a greater amount so expended, Rev. sec. 655, which will be a lien upon the lands; and a judgment that if it be not paid at a certain date the land be sold for cash, after due advertisement, by a commissioner appointed by the court, is correctly entered.

Appeal by plaintiff and defendants from Shaw, J., at December Term, 1919, of GastoN.

This is an action by the trustee in bankruptcy of Luther C. Arrowood to subject certain lands to a charge for money alleged to have been wrongfully invested by the bankrupt in building a barn and dwelling-house, and in making other improvements thereon, with the consent of the owner, William 0. Arrowood, in fraud of the creditors of the bankrupt.

This case was before the Court at Fall Term, 1916, 172 N. 0., 591, upon the statute of limitations; at Fall Term, 1917, 174 N. C., 657, upon the competency of evidence; and again at Spring Term, 1919, upon the action of the lower court in setting aside the verdict on the second issue on which the jury found that Luther 0. Arrowood was insolvent at the time of making said improvements. A new trial was awarded by this Court in each of said appeals for errors in the rulings of the lower court upon the questions above stated.

Upon the last appeal the new trial was restricted to the second issue only. On the last trial, which is now brought up for review by this appeal, the issue submitted was, ‘Did the defendant, Luther C. Arro-wood, at tbe time be invested bis individual funds in improvements on tbe land of William Arrowood, known as tbe ‘borne place,’ retain property fully sufficient and available for tbe satisfaction of bis tben creditors ?” Tbe jury responded tbat be did not. Upon tbis issue, and upon tbe issues found in tbe previous trial, 177 N. .0., 371, bis Honor entered judgment tbat tbe defendant bad invested bis own money in improvements on tbe land of bis father, described in tbe complaint, to tbe amount of $1,400, and tbat tbe said investment bad enhanced tbe value of tbe said land in tbe sum of $1,100, and rendered judgment in favor of tbe plaintiff in tbat sum from tbe first day of tbe term, said recovery to be administered by tbe trustee in bankruptcy in accordance with tbe rights of tbe parties entitled to share in said fund, tbe said amount to be a charge upon said real estate, and if not paid by February, 1920, the land should be sold for cash, after due advertisement, by the commissioner appointed by tbe court for tbat purpose. From tbis judgment both parties appealed.

Mangum & Woltz and S. J. Durham for plaintiff.

Osborne, Cocke & Robinson, Carpenter & Carpenter, and Arthur C. J ones for defendants.

Per Curiam.

Tbe plaintiff appeals from the refusal of the court to enter judgment for $1,400, the sum which the jury found the bankrupt bad invested in the improvement of bis father’s land. In Michael v. Moore, 157 N. C., 462, where the husband bad invested funds in the improvements of bis wife’s land, the Court did not expressly pass upon the point, but by analogy to the charge allowed for betterments, Rev., 655, we think tbat the land should be subjected to a lien for the increased value added to it, and no further. It may be tbat if the bankrupt was solvent, there should be judgment against him personally for the $1,400, with interest from date of the wrongful and fraudulent subtraction of tbat sum from bis assets. But tbat point is not presented.

As to tbe questions raised upon tbe defendant’s appeal, we think tbat in view of tbe full discussion on tbe three previous appeals, and on tbe trial below in tbis case, as to tbe allegations of fact upon which tbe defendants’ exceptions are based, no further discussion is necessary.

As to both appeals we find

No error.