Finley v. Smith, 24 N.C. 225, 2 Ired. 225 (1842)

June 1842 · Supreme Court of North Carolina

24 N.C. 225, 2 Ired. 225

DEN EX DEM. FINLEY AND LEA vs. GEORGE A. SMITH.

A judgment of a court, rendered on a day of the term subsequent to the day on 'which a conveyance of his property has been made by the defendant in the action, has relation back to the first day of the term, and an execution issuing thereon and tested of the same term will overreach such conveyance.

Such a judgment, though voluntarily confessed by a defendant to a plaintiff, who had knowledge of the prior conveyance, is not, on that account, fraudulent as against him who claims under the conveyance.

On the contrary the conveyance is considered in Jaw fraudulent as against the judgment.

The case of Farley v Lea, 4 Dev. & Bat. 169, cited and approved.

An appeal from the judgment of the Superior Court of Law of 'Caswell county, at Spring Term, 1842, his Honor Judge Dick presiding. The case is thus stated by the Judge: This-was an action ol Ejectment, brought by the lessors of the plaintiff, to recover the possession of one third of Liberty Ware House, a lot in the town of Milton, To sustain their action, the lessors of the plaintiff produced a deed from the sheriff oí Caswell county, which embraced, among other property, the premises in dispute. They also produced the records of two judgments, confessed in Caswell ¡Superior Court of Law, at May Term, 1837, by one John H. Crocket, one in favor of A. C. Finley, and the other in favor of Nathaniel Lea. The service of the writs upon which the judgments were confessed, was acknowledged by Crocket on the 11th and 12th of May, and both judgments confessed in open court on the last named day, which was Friday of the term. Upon these judgments writs of fieri facias were issued, tested as of Monday of the term, under which writs the property in dispute was levied upon, sold by the sheriff, and purchased by the lessors of the plaintiff. It appeared that the judg-' menfs were confessed on the promissory notes of John H. Crockett & Co., which firm consisted of himself and James W. Jeffreys. The writs embraced both names, though service Was accepted and judgments confessed by John H. Crockett only. It was also proved that the defendant, was in possession of the premises. . On the part of the defendant it was shown that on the 9th day of May, 1837, being Tuesday of the same term, John II. Crockett, being indebted to George W. Johnston & Co, of the town of Milton, in the sum of about twenty-four hundred dollars, executed to one George Farley, for their benefit, a deed of trust embracing the premises in dispute, and all of his estate both real and personal, which deed was duly proven and registered on the same day. A sale was made by the trustee under that deed, and the property in controversy purchased by George W. Johnston, under whom the defendant claims, and duly conveyed to him by the Trustee. Both the debts to the lessors of the plaintiff and the debt to George W. Johnston were admitted to be bonajide due and owing, and the property supposed to be worth about $1000, it. being all the property belonging to Crockett. On behalf of the defendants it was contended that the judgments confessed in favor of the lessors of the plaintiff were void, first, because by Crockett’s coming into court voluntarily and confessing a judgment, the consequence of which he knew was to defeat the object of the conveyance to Farley for the benefit of Johnston <fc Co., a fraud was perpetrated on their rights, and therefore the judgments were vitiated: Also, that the lessors of the plaintiff or their agents by procuring Crockett to confess the judgments for the purpose of defeating the deed to Farley, with a full knowledge that it had been executed and registered, committed a fraud on Johnston & Co., and the judgments were thereby vitiated or made void. To sustain the latter positiou they relied upon the evidence of the sheriff, who stated that, during the week of May Term, 1837, he communicated to the lessors of the plaintiff the fact that Crockett had made the deed of trust above referred to, and that at that time James W. Jeffreys was considered wholly insolvent, having conveyed all his property in trust, and that, at the instance of the lessors of the plaintiffs, he procured Crockett to acknowledge the service of writs, which he filled up himself, and to confess 'the judgments as before stated — that, before this was done, ‘he consulted with several of the attorneys in attendance-on the court, to know if it could be done, so as to get the preference of the trust, and they advised it could. The court charged the jury thait the plaintiff was entitled to Tecover, unless they 'believed from the evidence that the lessors Finley and Lea had combined, through their agent, the witness, with Crockett to prevent Johnston & Co. from enjoying the benefit of their deed, but if they believed that the object of these parties was simply to secure their debts, although by doing so they obtained the preference over Johnston & Co., then the transaction was not fraudulent, and the plaintiff was entitled to recover. There was a verdict for the plaintiff, and a motion for a new trial being overruled, the court gave judgment accordingly, from which the defendant appealed.

Kerr for the plaintiff.

¡Badger for the defendant.

Ruffin, C. J.

This action arises upon the same conveyance, judgments and executions, under which the parties claimed in the case of Farley v Lea, 4 Dev. & Bat. 169; the parties only being reversed. We need but refer to our judgment then given, to dispose of the present case. We then held, upon unquestionable authorities, that judgments, rendered on any day of the term, are by the rules of law deemed complete, and bind to all Intents and purposes, by relation from the first day of the term, and that a -fieri facias binds in like manner from its teste: so as to overreach an alienation of property made before the judgment was in fact rendered, or the execution was in fact issued, but after the day to which they relate, as just mentioned. We observe that, on the trial of this cause, those positions were not even •contested on the part of the defendant, and they seem to us decisive of this controversy. It was contended, indeed, that sthe judgments were fraudulent, and so void, because the ef-feet of them was to defeat the deed from Crockett to Farley, whi°h had ^ee£1 Previously made. The case states the debts to Finley and Lea, as well as that secured by the deed of trustj to be true debts. That being the case, it seems impossible to impute fraud to the judgments, upon any such principle as that supposed. They might be subject to such an imputation, if there was a trust for the debtor, or any ease or favor was intended for him. But nothing of that kind is alleged, but merely that they are dishonest and covinous, because they overreach and defeat the previous deed. But the very circumstance that they do so defeat the deed is conclusive, that they cannot be deemed in law fraudulent; for they have that effect, not from the intent of the parties, but by a rule.of the law itself; and, indeed, the law deems the alienation of property subsequent to the teste of a fieri facias to be itself fraudulent, since it tends to defeat the process of the law. Instead, therefore, of the party, who claims under Farley, complaining of the judgments, as defeating a prior valid deed, they must blame their own folly in relying on a conveyance, that was not valid as against a judgment, that might be rendered against the maker of the deed, and was so rendered. It is absurd to impute fraud to a security, merely upon the ground,that it is in law the best security, and preferred to a different and more imperfect one made before it. We think, therefore, it would have been more correct, if the court had simply instructed the jury that the plaintiff was entitled to their verdict. The judge, however, thought it right, perhaps from abundant caution, to leave it to the jury, though without evidence as it seems to us, to say whether the object of taking the judgments was to defeat the creditors secured in the deed, and not simply to secure the debts for which the judgments were rendered; and the jury found that against the defendant. He, therefore, has certainly nothing to complain of; and the judgment must be affirmed.

Per Curiam, Judgment affirmed.