Case ID: nc_41/html/0057-01.html
Source: Caselaw Access Project
Author: {"author": "Nash, J. Ruffin C. J. Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THOMAS R. STEPHENS vs. JOHN HARRIS & AL.
    Though a voluntary bond is good between the parties, in this Court as well as at law, yet, in the course of administration, it is to be postponed to any just debts, though due by simple contract.
    'Equity regards it as a fraud, to give a voluntary security, which, by its form, gets a preference to a just debt, and, therefore, interposes to prevent the preference, in whatever way it may become necessary to effect that end. So that, if the voluntary obligee receive the money from the executor, the real creditor may file his bill to be satisfied out of the money, if he cannot otherwise get his debt, and if the creditor has the fund in his possession, he may retain ¡tin satisfaction.
    Cause removed from the Court of Equity of Person County, at the Fall Term 1848.
    The plaintiff alleges, that he is the illegitimate child of Anderson Harris : and that his father had lent to the defendant, W. J. Hamlett, the sum of $838 94, and, being disposed to make a provision for him, took from the said Hamlett a bond, made payable to the plaintiff for that sum, and delivered it to his mother, Joan Stephens, for his use and benefit. He states, that, subsequently, it was by his mother delivered to his father for collection, who lost it, and shortly thereafter died ; and that John Harris, his father, administered on his estate, and took from W. J. Hamlett a bond for the money so lent him in his own name, as such administrator, and claims to hold it as assets of the estate of Anderson Harris.
    The defendant, John Hams, denies, that he has any knowledge of the making of the bond of W. J. Hamlett payable to the plaintiff, and, if it was made, he denies it was ever delivered to the plaintiff, or to any one for him. He alleges the facts to be, as he had heard, that Anderson Harris was convicted in the Superior Court of Person County for an offence, for which the Court sentenced him to be imprisoned three months and pay a fine of $300; and that to evade the payment of the fine, he made the loan spoken of to Hamlett, and took the bond payable as stated. He further states, that at the time the loan was made to Hamlett and the bond taken, Anderson was very largely indebted to him, for rents of lands and money lent him, to an amount much larger than the bond in controversy, and that, after paying the just debts of the intestate, Anderson, there will not be assets to an amount exceeding $175.
    
      Gilliam, for the plaintiff.
    
      Jj], G. Reade and Norwood, for the defendants.
   Nash, J.

We are satisfied from the evidence, that the bond made by W. J. Hamlett to the plaintiff was delivered to his mother for him, and was intended to enable Anderson Harris to evade the payment of the fine, imposed upon him by the Court on his conviction, and that it was, therefore, fraudulent and void as to the State ; but the fine and the costs of the prosecution have been paid, and the state is not making any complaint. But, although the debt due the State is paid, still, as the bond, or the money secured thereby, was a gift by Anderson Harris to the plaintiff, it is void as to-the creditors of the donor; yet it is binding on Harris, and on the defendants, who stand in his shoes. The defendant Hamlett is also bound to make it good. At the time he gave the second bond, to John Harris, the administrator of Anderson Harris, he knew the original bond was the property of the plaintiff. John Harris, however, in his answer alleges, that his son Anderson was, at the time of the gift of the Hamlett bond to the plaintiff, largely indebted to him and that those debts are unpaid ; and that there are not assets sufficient to pay what was due him, over and above the Hamlett bond.

There must be a reference to the master to take an account of the assets of Anderson Harris, which came to the hands of his administrator, John Harris, the amount of the debts due from the estate, and particularly the amount of the debt due from the estate to John Harris, and how due.

Ruffin C. J.

The plaintiff would be entitled to recover from the defendant Hamlett, upon the single ground of the bond, which he gave payable to the plaintiff and the loss of it, as admitted in the answer ; and, if he had sued him by himself, it is not seen how that defendant could have raised any question as to the rights of the creditors of Anderson Harris. But, as the two defendants came to an arrangement between themselves, whereby the fund to which the plaintiff as obligee in the bond, is entitled» has been placed in the hands of the defendant Harris, and the plaintiff has framed his bill upon the idea of fol. lowing that fund, that defendant must be allowed to assert any claim upon the fund in this suit, which he might do in a bill by him against the plaintiff if he had himself received the money from the obligor, Hamlett. Now,al= though a voluntary bond is good, between the parties, in this Court as well as at law ; yet it has been long settled, that in the course of administration it is to be postponed to any just debts, though' due by simple contract.— Powell v. Jones, 1 Eq. Cas. Abr. 84. Lechmere v. Carlisle, 3 Pr. Wms. 211 ; Cray v. Rooke, For. Rep. 158, Equity regards it as a fraud to give a voluntary security, which by its form gets a preference to a just debt, and, therefore, interposes to prevent the preference. It follows, that it will interpose in whatever way it may become necessary to effect that end ; and, therefore, that, if the vol« untary obligee receive the money from the executor, the real creditor may file his bill to be satisfied out of the money, if he cannot otherwise get his debt. The same reason applies with equal force to the voluntary assignment of an obligation or a debt, as to a debtor’s own voluntary obligation. Therefore, the defendant Harris, as a creditor of Anderson Harris, might maintain a suit against the present plaintiff for satisfaction out of his debtor’s bounty, if it were in the plaintiff's hands. And it is the necessary consequence, that, having the funds in his own hands, he has the right to retain out of it what will pay his demand, if there be no other assets. The principle of law involved in the case seems to be simple and clear enough; and the doubt, probably, is, whether the sums now demanded as debts from the son were not advancements to him. That question, however, will arise, when it is known, what debts the son owed the father, and what assets the latter has, as administrator of the son, and how the same have been administered ; as to all which there must be a reference to make the usual enquiries.

Per Curiam.

Deeree accordingly.