Hiatt v. Wade, 30 N.C. 340, 8 Ired. 340 (1848)

June 1848 · Supreme Court of North Carolina

30 N.C. 340, 8 Ired. 340

JACOB HIATT vs. ELISHA WADE.

Under our Act of Assembly of 1840, ch. 28, a purchaser from a fraudulent grantor to a prior grantee shall not be protected in his purchase unless he has purchased for a full value and without notice of the fraudulent conveyance.

Appeal from the Superior Court of Law of Guilford County, at the Spring Term, 1848, his Honor Judge Peaeson presiding.

This is Trover for two stacks of hay. Plea, not guilty. Upon the exception, the case appears to be as follows.

Adam Sharp owned a tract of land in fee, containing 409 acres, and resided on it. He had a son named Samuel, and he permitted him, upon his marriage, to build also on the land and cultivate the greater part of it. The father and son kept separate houses, and cultivated distinct portions of the land. After they had thus continued many years, Adam Sharp in May 1842 conveyed the whole tract in fee to Samuel Sharp in consideration of $2000 paid, as expressed in the deed ; and that was a fair price for it. Just before his death in November 1843, Samuel Sharp, in consideration of love and affection, conveyed the premises in fee to the plaintiff and his wife, who was the daughter of Samuel. Adam Sharp continued to live on the land and to cultivate his portion of it, as he had before, until May 1845., when he removed from the State. When going away, he sold and conveyed to the defendant the crop of grass growing on the meadow in his occupation, in consideration of the sum of $50, which was its full value and then paid. After the conveyance to the plaintiff and his wife, the plaintiff imme? diately entered into those parts of the land, before occupied by Samuel Sharp; and, as soon as Adam Sharp went away, the plaintiff took possession of the residue of the land, and shortly afterwards cut the grass and stacked the hay on the meadow. In a few days the defendant carried it away, and the plaintiff brought this action. On the part of the defendant evidence was given, that many years before 1842, Adam Sharp, as surety for another person, became bound in a bond for $30,000, and that a suit was pending against him thereon, when he made the deed to his son in May 1842, and that it was in 1844 compromised for the sum of $1,200 paid by the same Adam : And evidence was further given, that the consideration of $2,000 mentioned in the deed to Samuel, was not in fact paid, but that only a bond was given for it; and that afterwards the parties, Adam and Samuel, stated to a witness, that it was never meant that it should be paid, as the father had always intended to give the land to his son and made the deed to that intent, but put it in the form of a sale and took the bond for the price, in order to keep the land from being sold under execution, in case judgment should go against the said Adam in the suit then pending: And evidence was further given, that at the same time and upon the ground of such understanding as aforesaid, the witness by the direction and in the presence of Adam and Samuel, entered on the bond a credit for the sum of $1,800, without any part of it being paid and in order to prevent Samuel, upon the death of his father, from being liable for that sum to the other members of the family.

On the part of the plaintiff evidence was then given, that when the defendant purchased the grass from Adam Sharp, he was informed of the deed from him to his son Samuel, and from the latter to the plaintiff and his wife.

The counsel for the defendant moved the Court to instruct the jury, that, notwithstanding the defendant’s knowledge of the deed from Adam Sharp to Samuel, the same was void, as against the defendant, if the jury believed that he was a purchaser for full value and that the deed was voluntary and made with an actual intent to defraud. The Court refused the'instruction, and directed the jury, that, admitting the deed to have been made in fraud of Adam Sharp’s creditors and also with intent to defraud subsequent purchasers from the grantor, it was, nevertheless, valid against the defendant, if he had notice of it when he bought. The plaintiff obtained a verdict and judgment, and the defendant appealed.

Iredell, for the plaintiff.

Morehead, for the defendant.

Ruffin, C. J.

A point obscurely appears in the case, of which something might, possibly, have been made for the defendant, if it had been urged on the trial. It is, that Adam Sharp, by the consent of his son and the plaintiff, actually occupied parts of the land, he had conveyed, including the meadows on which the grass grew, and, as he remained on the land for about five months of the year 1845, that he was entitled to the grass then growing and could, consequently, sell it. However that might be, the question was not raised on the trial, and therefore cannot be considered here.

On the point which was made, the decision is clearly supported by the Act of 1840, c. 28. The St. 27 Eliz. c. 4, enacts, that conveyances of land, made with intent to defraud purchasers, shall, only, as against purchasers for good consideration, be void. Under that Act it was, of course, held, that notice of the fraudulent deed did not impeach the title of the purchaser ; because the bad faith of the deed vitiated it, and, with notice of the deed, the purchaser had also notice of the fraud. But the legislature thought proper in 1840. to alter that and declare, that no person shall be deemed a purchaser within the meaning of the former Act, unless he purchase the land for the full value thereof, without notice, at the time of his purchase, of the conveyance by him alleged to be fraudulent. This language is as precise and positive as it can be. It is not open to construction, and is decisive against the defence. The counsel for the defendant has, however, zealously argued against it, because thereby a transaction, expressly designed to defraud the donor’s creditors, and essentially dishonest, becomes good as if it had been founded on honest purposes, merely from the fact, that the purchaser from the fraudulent grantor had knowledge of the deed, though at the same time he had knowledge also of the dishonesty of it. It was contended, that the legislature could not have meant to adopt a principle in support of contracts so immoral. But it is in vain upon any such reasoning to struggle against the express words of an Act of Assembly. Besides, the legislative purpose in the Act seems to be misunderstood. It was not simply to give efficacy to fraudulent conveyances. They were before valid against the parties and all the world, except two classes of persons, namely, creditors and purchasers for value. Now in respect of the latter class, the Act of 1840 changes the policy thus far: that conveyances shall be good against them, as against the rest of the world, unless they buy for a full price and without knowledge of the fraudulent conveyance. In other words, the Act means, that such a purchaser shall not take advantage of the prior fraud, because he was not, himself, a meritorious purchaser, since he either did not give a fair price, or bought with his eyes open and to enable the vendor to defeat his own prior conveyance. Which is the better policy of the two, and tends the more to moral ends, it was for the legislature to consider. The Courts must administer the law as it is given to them by the legislature.

Per Curiam. Judgment affirmed.