Godsey v. Bason, 30 N.C. 260, 8 Ired. 260 (1848)

June 1848 · Supreme Court of North Carolina

30 N.C. 260, 8 Ired. 260

HENRY GODSEY vs. JAMES BASON.

Where a debtor removes out of a County, with intent to defraud his creditors, a person, who, knowing of such intent, helps him by carrying him or his property a part of the way, in order to assist him in getting him out of the County, becomes bound for his debts, (under our Act of Assembly,) although he did not convey the debtor or hie goods entirely out of the one County into another.

Where a person, who has removed a debtor out of a County, is sued by a creditor, it is not necessary to shew that this person had a knowledge of any particular debt due by the debtor, but it is sufficient, if the circumstances of the case induce the jury to believe, that the removal was made with a view to defraud creditors.

In an action under our Act of Assembly, concerning the fraudulent removal of debtors, the measure of damages is the amount of the debt due by the debtor to the plaintiff.

Appeal from the Superior Court of Law of Roekingham County, at the Spring. Term, 184S, his Honor Judge Pearson presiding.

Thisisan action on the case brought February 28th,1845, on the act of 1820, for aiding and assisting in removing one Thomas Sharp from Rockingham County, with the intent to hinder and defraud the plaintiff of a debt, which Sharp owed him. Pleas: Not guilty, release, and accord and satisfaction.

On the trial, the plaintiff gave evidence, that in November 1841, he paid for Sharp, and as his surety, the sum of $94 56 to the present defendant, as the agent of the person to whom the money was due ; and that both the plaintiff and Sharp, and also the defendant, lived in Rockingham, from that time until the removal of Sharp, which is the subject of this action.

The plaintiff gave further evidence tending to shew an agreement between Sharp, the defendant, and his brother Isaac Bason, that the two latter should assist Sharp, to remove from the County and State to the Holstein river in Virginia, in order to avoid his creditors, and that, in exeution of it, Isaac Bason furnished a wagon, which, at a time agreed on, he had in readiness at a place in Rockingham, about five miles from Sharp’s residence; and that, on a certain day in August 1843, Sharp and his family, with the knowledge of the defendant, absconded on foot, in the night time, and went from Rockingham into Stokes County, and, on the same night, the defendant, at Sharp’s request, carried a bed and furniture and a box with sundry articles in it from Sharp’s residence to the wagon, at the place appointed, and delivered them to the wagoner, to be carried, and, by the defendant’s directions they were carried, that night, to Sharp in Stokes County, and thence with him and his family to the Holstein.

Evidence was then given on the part of the defendant, that, when Sharp went ofi', he was very much involved in debt, and had but little property, and that consisted of household, and kitchen furniture and a small stock; of all of which he disposed before he left, except a cow, which the defendant got, and the goods which the defendant carried to the wagon, and some articles, which Sharp and his family carried with them.

The defendant further gave evidence, that, soon after Sharp went away, the plaintiff said, Sharp gave him up papers before he left, and, if he succeeded in collecting them, he hoped he would ,not lose much after all.

The counsel for the defendant thereupon moved for the following instructions:

First — That if the jury believed, that Sharp had paid or satisfied the plaintiff’s debt before his removal, they ought to find for the defendant. The Court informed the jury, that there was no evidence of such payment or satisfaction ; and for that reason declined giving any further instruction on that point.

Secondly — That, as an action arose to the plaintiff against Sharp in November 1841, and, so, was barred by the statute of limitations when this suit wras brought in February 1845, the plaintiff could not recover in this suit; or, at all events, that the jury might take that circumstance into consideration on the plea oí satisfaction. But the Court refused to give either part of the instruction.

Thirdly — That, as the defendant did not remove the goods of Sharp out of the County of Rockingham, he was not liable in this action, although he removed them five miles within that County, in part performance of a general plan, for a removal out of the State, with intent to hinder Sharp’s creditors. The Court refused also to give this instruction.

Fourthly — That there was no evidence that the defendant knew, at the time of the removal, that Sharp was indebted to the plaintiff; and that, without such knowledge on the part of the defendant, he was not liable to the plaintiff.

The Court refused to give the instruction as prayed for; and instructed the jury, that it was not necessai’y the creditor should prove, that a person, aiding his debtor to remove, was expressly notified of the existence of the debt, but it was sufficient if he had knowledge of any facts that would put him on enquiry, whereby he might find out the debt; and, further, if they should find that the plaintiff, as surety for Sharp, paid the debt of $94 56 to the defendant, and that all those persons lived in the same County, and that Sharp was generally reputed, from the time of the payment to his removal, to be insolvent, that those circumstances were sufficient to put the defendant on such enquiry.

Lastly — The counsel for the defendant moved the Court to instruct the jury, that, if they should find for the plaintiff, they might take into consideration the state of Sharpe’s property, and assess only the actual damages, sustained by the plaintiff, from the removal of an insol•vent debtor. But the Court refused, and instructed the jury that the amount of the debt was the proper measui’e of damages.

The plaintiff obtained a verdict and judgment, and the defendant appealed.

Morehead, for the plaintiff.

Kerr and Iredell, for the defendant.

Ruffist, C. J.

The Court is of opinion, that neither of the exceptions can be sustained, and that the judgment must be affirmed. It is true, if the plaintiff had received payment from Sharp, so that no debt existed, this action would not lie. But it was held correctly, that there was no evidence from which the payment could be justly inferred. The declaration of the plaintiff, that Sharp left “ some papers” with him, and, if he could collect them, he hoped not to lose much, is too vague to authorise a finding of satisfaction. There is nothing to point out what the “ papers” were, or that they were received in satisfaction. If it may be assumed, that they were securities for money deposited with the plaintiff as an indemnity, it does not appear, that they were on solvent persons, nor what was their amount, nor that they were then, or even now, due ; much less that they had been collected. Under such circumstances it could not be judicially held, that any part of the debt had been paid.

Upon the point respecting the statute of limitations, it is to be noticed, that two j'ears had not elapsed between the payment of the money by the plaintiff and the removal of Sharp. It is unnecessary, therefore, to consider, whether a person, sued for fraudulently removing a debtor, can insist on the defence, that the statute would, at the time of the removal, have barred an action against the debtor; or, if he can, whether it may be done on the general issue, or must be pleaded. Those points do not arise in the case; for the plaintiff was entitled both to his debt, and to his action against Sharp, when he was removed.

By removing him, an action arose against the present defendant for the debt, which might be brought at any time within three years : and the plaintiff was under no obligation to prosecute Sharp further. Consequently, it cannot affect the remedy against the defendant, that, ai» terwards, the time ran so as to become a bar to an action against the original debtor. The remedies are of different natures and independent; and, while the debt exists, the creditor may take his remedy against either of the parties, or, indeed, proceed separately against both of them at the same time.

It is true, that removing a debtor from one to another part-ef a county, though with the intent and expectation at the time, that the debtor should remove out of the county, is not within the Act, if the debtor do not actually carry the intention into execution. For it is the removal out of the county, which makes the person, removing a debtor, liable for his debts, and the parties may change their purposes. But that was not the case here, as the fact was undisputed, that Sharp did go out of the county, according to the original design ; and, in such a case, a person who helps him by carrying him or his property a part of the way, in order to assist him in getting out of the county, becomes bound for his debts, although he did not convey the debtor or his goods entirely out of the one county into another. The statute is remedial, for the prevention of frauds on creditors, and is entitled to a liberal interpretation. It would be a fraud on it to allow it to be evaded by carrying the debtor to the county line. But, in truth, the case is within the words, as well as the meaning of the Act. For,, not only removing, but “ aiding or assisting” in removing a debtor, with intent to defraud his creditors, makes a person liable for all debts in the county.

The Court concurs also in opinion, that the circumstances mentioned by his Honor were sufficient to be left to the jury to charge the defendant with a knowledge of the plaintiff’s debt, if such knowlege were necessary to that purpose. But we think very clearly that it is not one, who, removes a debtor with the fraudulent purposes to put him or his property beyond the reach of his creditors generally, that is liable for all he owes in the County, though he have not specific notice of particular debts, nor even suspects their existence. The language of the act is, that any person, who shall remove a debtor out of any County with intent to defaud “ the creditors of such debtor, shall be liable to pay, all debts” which the debtor may justly owe in the County, and not those only of which he knew, or had reason to believe the existence. It is necessary, indeed, that the party should have some knowledge or belief of an indebtedness of the person removed, in order to authorise an inference of an intent to defraud creditors. But when, from direct evidence, or from the circumstances of the case, such as the general known pecuniary condition of the person removed, and the secret manner of the removal, the jury is satisfied of the general purpose to help the debtor to escape from his creditors, the act attaches, and gives- to every creditor, this remedy, although he, who removed the debtor, might have had no knowledge of the particular debt, and could therefore have had no intent to defraud one creditor in particular. A contrary construction would defeat the act altogether, as it must be almost impossible to fix the .party with precise knowledge of the various debts, or even to show enough to put him on enquiry as to the spe-cifie debts. The true principle of construction of this act is that applied to Stat. IS Elh. which is, that what is fraudulent as to one creditor, is fraudulent as to all creditors, or, at least, all existing at the time. Both the policy and the words of the act of 1820, require this construction.

With respect to the measure of damages, the langage of the act leaves no discretion in the Court or the jury. The enactment is positive, that a person removing, or aiding in removing a debtor, “ shall be liable to pay all debts” in the Couuty; “ which debts maybe recovered by the creditors respectively by an action on the case.”

Per Cueiam. Judgment affirmed.