Standard Oil Co. v. Hunt, 187 N.C. 157 (1924)

Jan. 22, 1924 · Supreme Court of North Carolina

187 N.C. 157

STANDARD OIL COMPANY et al. v. W. T. HUNT, F. S. ROYSTER GUANO COMPANY, et al.

(Filed 22 January, 1924.)

1. Evidence — Nonsuit.

On a motion to nonsuit, the evidence is to be taken in the light most favorable to the plaintiff, and he is entitled to the benefit of every reasonable intendment and reasonable inference to be drawn therefrom. C. S., 567.

2. Fraud — Definition—Equity.

Fraud, actual and constructive, is so multiform as to admit of no general rules or definitions, and it is no part of equity doctrine to define it.

3. Same — Debtor and Creditor — Mortgages — Judgments — Unsecured Creditors.

Evidence in tMs case that one conducting a small store gave certain creditors of Ms mercantile business mortgages in comparatively large sums to secure a preexisting debt, and that while the store bad been closed for some time, a fire occurred, etc., is held sufficient in a judgment creditor’s suit to set aside the mortgages as to the unsecured debts, and show that they bad been given and received with the intent to defraud those who were not thus secured in their debts against the owner.

Appeal by defendant, F. S. Royster Gruano Company, from Lane, J., at Spring Term, 1923, of Clay.

Civil action in the nature of a judgment creditors’ bill brought to set aside two mortgages, one given to F. S. Royster Guano Company and the other to Cherokee Hardware Company by W. T. Hunt and wife, with the intent, it is alleged, to hinder, delay and defraud Hunt’s other creditors, plaintiffs herein.

Upon denial of plaintiffs’ allegations and issues joined, there was a verdict and judgment in favor of plaintiffs, from which the defendant, F. S. Royster Guano Company, appealed.

John H. Dillard> Anderson & Gray, and Thos. J. Hill for plaintiffs.

D. Witherspoon and Moody & Moody for Royster Guano Company.

Stacy, J.

The single question presented by this appeal arises upon the appellant’s demurrer to the evidence and motion for judgment as of nonsuit made under C. S., 567. Viewing the evidence in its most favorable light for the plaintiffs, the accepted position on a motion of this kind, we find the following facts sufficiently established, or as reasonable inferences to be drawn from the testimony:

1. From 1919 to 1922 "W". T. Hunt was engaged in the mercantile business at Hayesville, N. C. He carried a small stock of general merchandise, variously estimated to be worth from $1,000 to $2,500, and he also ran a gasoline filling station in connection with his store. This was of small value.

2. On 31 March, 1921, Hunt and wife executed to F. S. Royster Guano Company a mortgage to secure the payment of a preexisting debt amounting to $3,950.97.

3. On 6 April, 1921, Hunt and wife executed a- deed of trust in favor of the Cherokee Hardware Company to secure a preexisting debt amounting to $704.69.

4. On 8 April, 1921, Hunt executed to W. L. Matheson, one of the plaintiffs herein, a note for $1,050, secured by. mortgage on a town lot worth from $300 to $5Q0, stating at the time that he wanted to secure Matheson as far as he was able to do so.

5. It was admitted oil tbe bearing tbat, at tbe time of tbe execution of these mortgages, ~W. T. Hunt was indebted to tbe plaintiffs as follows: To tbe Standard Oil Company in tbe sum of $203.40, witb interest from date until paid;-to W. L. Matbeson, tbe sum of $1,050, with interest from 24 June, 1921, until paid; to O. M. McOlung & Oo. in tbe sum of $468.37, witb interest from 31 May, 1921, until paid, and to W. N. Moore, guardian of Morris Moore, an infant, in tbe sum of $750 on wbicb $100 was paid 10 January, 1922, witb interest on said $750 from 25 October, 1919, till paid, and to tbe Olay County Bank in tbe sum of $524.09, witb interest from 20 June, 1922,. until paid. There was further evidence tending to show tbat Hunt was insolvent and unable to meet bis obligations at this time.

6. W. T. Hunt remained in business for a year or more after tbe execution of tbe mortgage above mentioned, when bis store was. destroyed by fire. His former partner testified: “A great deal of tbe time Hunt’s store was closed before tbe fire. Tbe filling station be bad at bis hardware store be was not using at tbe time of tbe fire.”

Upon these, tbe facts chiefly pertinent, we think tbe jury was amply justified in finding, as they did, tbat tbe mortgages in question were given witb intent to binder, delay and defraud tbe plaintiffs herein, and tbat tbe F. S. Royster Guano Company and Cherokee Hardware Company bad knowledge of such purpose and’ participated therein. On a motion to nonsuit, tbe evidence is to be taken in its most favorable light for tbe plaintiffs, and “they are entitled to tbe benefit of every reasonable intendment upon tbe evidence and every reasonable inference to be drawn therefrom.” Christman v. Hilliard, 167 N. C., p. 6.

Fraud, actual and constructive, is so multiform as to admit of no rules or definitions. “It is, indeéd, a part of equity doctrine not to define it,” says Lord Hardwiche, “lest tbe craft of men should find a way of committing fraud wbicb might escape such a rule or definition.” Equity, therefore, will not permit “annihilation by definition,” but it leaves the'way open to punish frauds and to redress wrongs perpetrated by means of them in whatever form they may appear. Tbe presence of fraud, when resorted to by an adroit and crafty person, is at times exceedingly difficult to detect. Indeed, tbe more skillful and cunning tbe accused, tbe less plainly defined are tbe badges wbicb usually denote it. Under such conditions, tbe inferences legitimately deducible from all tbe surrounding circumstances furnish, in tbe absence of direct evidence, and often in tbe teeth of positive testimony to tbe contrary, ample ground for concluding that fraud has been resorted to and practiced by one or more of tbe parties. Grove v. Spike, 72 Md., 300.

Tbe ease was properly submitted to tbe jury, and there is no error appearing on tbe record. Tbe verdict and judgment will be upheld.

No error.