Case ID: sc-eq_10/html/0081-01.html
Source: Caselaw Access Project
Author: {"author": "O’Neall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Eigleberger, Martin Kinad, Sen., and Adam Kibler, v. Michael Kibler, Sen., and David Kibler.
    The right of a creditor to avoid a voluntary conveyance, arises from the fact that he cannot otherwise be paid; and if a creditor comes into equity to avoid such a conveyance, it must appear that he had no other means of payment: certain creditors, (the plaintiffs) with a knowledge of such conveyance, stood by and permitted other and juuior creditors to exhaust the debtor’s property, and meanwhile the donee had possession, and made permanent improvements on the land ; on a bill filed to set aside the conveyance : Held, that they were not entitled to relief. [*120}
    The statute of limitations runs from the discovery of a fraud. [*121]
    A subsequent creditor with notice, is not entitled to have a voluntary conveyance set aside. [*121]
    The bill states that the plaintiffs, John Eigleberger and Martin Kinard, have lately obtained judgments for considerable sums against the defendant, Michael Kibler, on debts which were contracted as far back as 1816 and ’18, and which have been, by successive renewals of notes, continued to the notes on which judgments were obtained. That the plaintiff, Adam Kibler, also lately obtained judgment against Michael, for a large sum, which was founded in part on a debt contracted in 1816, by note transferred to this plaintiff and renewed to himself in 1821 ; and the ^balance of the judgment was for a note taken to indemnify him for his suretyship for Michael, for debts for which he has since been sued, and judgments obtained against him. That Michael Kibler, in 1822, conveyed a tract of land to his son (the other defendant) David Kibler. That he was then embarrassed — that the sale was voluntary, and intended to defraud the rights of subsisting and subsequent creditors — and that Michael has since become entirely insolvent. The bill prays that the conveyance may be declared fraudulent and set aside, and the land made liable for the payment of these debts.
    The answer of David Kibler, admits that the conveyance to him was voluntary, but denies that it was intended to defraud creditors. That his father, Michael Kibler, at the date of the conveyance, had the ability to pay all his debts, and has since become insolvent, from speculations and misfortunes. That the plaintiffs well knew of the conveyance to him at the time it was made ; and that they afterwards indulged the said Michael, and renewed his note, and permitted the defendant to remain in the possession of the land, and make permanent and valuable improve.ments on it; and submits whether these facts are not a good bar to the relief sought. The answer also relies on the statute of limitations, and insists that the plaintiffs have an adequate remedy at law. The bill was taken pro confesso, as to Michael Kibler.
    The case came to a hearing at Newberry, July, 1832. So much of the testimony as is necessary to a correct understanding of the grounds made and decided, is set forth by the Chancellor in the following decree :
    Johnston, Chancellor. “ I will consider the cases of the three plaintiffs separately — first Eigleberger’s. It is said he is not a real, but only a nominal plaintiff, that his name is employed by the sureties to the judgment held by him; this cannot vary the decree on his case. Those claiming in his name can claim no more by virtue of that name than he» could himself. The rights of a nominal, are the measures of the rights of the real plaintiff who uses his name. The latter is regarded as an assignee. If the sureties have, as sureties, any equities, they must come into *@oart i*1 their own name to assert them. None of them but Adam Kibler has done so, and none except him can be noticed. But as his case as surety is distinguished from the case he sets up in the name of Eigleberger, it will not be confounded with it; it will be considered, when we come to examine the rest of the claim set up by him in his own name; at present we will confine ourselves strictly to the claim of Eigle-berger. Eigleberger’s demand consists, in law, of two judgments signed November 24th, 1830; one of which is founded on a note dated September 23, 1828, and due at three days, and the other on another note, dated January 13th, 1829. The faces of his notes show him to be a creditor subsequent to the date of the deed to David, which he seeks to avoid, and as a subsequent creditor, he is not entitled to the relief which he seeks, because according to his own testimony, be became such creditor with full notice of the deed. But it is said he is entitled to rank as a subsisting creditor." It is alleged that one of his judgments (the one to which Wicker and H. Kinard are sureties) resulted from a debt originating at Shealy’s sale. The proof of this ought to be clear. So far from it, however, if either of the judgments had such origin, there is as much evidence that it was the other judgment as this. There is no other proof of the allegation than that old Kibler bought to an uncertain amount at Shealy’s sale, in 1811, and that his administrator transferred a note on him in 1823, to John Kibler, Jr. The date of the note when it fell due, the consideration whether it was- an original or renewed note — all these things are left in uncertainty. How do we know that the note transferred to John Kibler arose at Shealy’s'sale? How do we know it bore date prior to the date of David’s deed, December 18th, 1822 ? If it arose out of Shealy’s sale, and bore date befoi'e the deed, how does it appear that it was not the original note of 1811, and barred at the date of the deed ? And if so, if the note which is made the ground of relief for Col. Eigleberger, was barred at the execution of the deed, must not the right to the relief itself fall to the ground ? I * think so. Here is a fit place to express an opinion as to the effect that old Kibler’s acknowledgment of debts, made subsequent to the deed should have on David, to whom he had conveyed. The utmost that any one could contend for, would be, that such subsequent acknowledgments by old Kibler, would, if made bona fide and not conclusively, be good to keep alive a demand which was at the date of the conveyance, in full force, either on its face or by virtue of prior reviving promises. That as to all subsequent bona fide acknowledgments, such effect would be no injustice to one who taking as a volunteer, took subject to the existing debts; and as between the donor and donee, the latter became from the date of the gift, the trustee of the former, to pay off the incumbrances with the property received ; and thus a priority would exist between them, even after the conveyance, sufficient to bind the donee, by the acts of his trustee, if not fraudulently done. Be this as it may, there is no necessity to express an opinion upon it. On the other hand, I hold that David is not bound by any acknowledgments made by his father after the deed, of any debt then barred. My positions then are, that there is not evidence tracing Col. Eigleberger’s debt back beyond 1823. That if the evidence does trace it back ■ further, it indicates no time at which we can say with any confidence, that the note transferred to John Kibler had its origin, unless we connect it with Shealy’s sale, and then it was barred at the date of the deed — that there is no evidence of any reviving promises before the date of the deed, and if there was, no time is assigned to them ; so that even after that, the bar might have been complete, at the date of the deed ; that if barred when the deed was executed, no subsequent act or admission of old Kibler could receive the debt so as to bind David. That Eigleberger being barred on the contract, is incidentally barred of the relief he claims. But I go further, I think he is barred directly as to the relief. Grant that his debt originated before, and was in full force at the date of the deed. Grant further, that the note was in full force when transferred to John Kibler in 1823. If Eigleberger goes back to 1823, to claim the benefit of *the rights which John Kibler then had, he must put himself in his'shoes, and be subject to his disabilities. The act of limitations runs from notice of the fraud. That which is here charged as a fraud, was known to John Kibler in 1822, when he witnessed the deed; and he had notice further when David took possession in 1824. There is still another ground upon which Col. Eigleberger must fail, whether he be regarded as a subsequent or subsisting creditor. It is, that he has full remedy at law. It does not appear, either by the bill or by the testimony, that (whatever may be the case with old Kibler) his sureties are not very solvent, and that a ft. fa. or oa sa. will not make the money.
    Next, Kinard’s case.
    This stands on a judgfnent confessed May 21st, 1832, upon a note executed by old Kibler, on the 10th of the same month.
    David had been upwards of eight years in possession, with a notorious claim, and his deed had been nearly two years on record ; taking things in this situation, Kinard is a subsequent creditor with notice. But in this case, as in Eigleberger’s, an attempt is made to trace back the debt, and to show that Kinard was a subsisting creditor at the date of the deed to David Kibler. The proof ought to be plenary; it is very loose — the first step carries us back to a note executed the 1st February, 1828, and due at three days. The next, by very flimsy testimony, carries us to what one of the witnesses thinks was a note dated December 27th, 1823, and due at three days. Can we go further ? The witness says, that note was the renewal of another, of which Kinard retained possession. It was then in his power to produce it, and the verbal proof of its contents, date &e., is competent. The notes produced have no connection, so far as was shown, with the judgment. The proof then af most, goes no further back than 1823. As to what David Kibler says in his answer, that he had been told that a small part of Kinard’s debt was contracted for current expenses, but that he did not know how the fact was, that cannot operate as an admission of the *fact. The remarks on Eigleber-ger’s case, touching the bar, both as to the notes and the fraud, will, with modifications which will readily suggest themselves, apply to this case. There was no proof of the credits endorsed on the supposed notes of 1823.
    There is another matter ; Kinard had surety for his demand. There is no proof that when he relinquished it, it was not available. Can he, after such waiver and relinquishment, hold David’s land liable to, and as it were, security for his debt? I doubt it. The testimony of Jacob Kibler has thrown suspicion on this claim. It surely was competent for Kinard to say, whether he held a demand on old Kibler or not. He said he had none. Can it be, that Adam Kibler and his father, after all was settled, raked it up without Kinard’s knowledge ? Come from what quarter it may, I cannot on the testimony support it.
    Now for Adam Kibler’s case.
    The testimony of Jacob Kibler and Levi Cook shows, that Adam, in 1828, received pay for, and gave up to his father, the note for which the $700 note is substituted. I mean that he received pay for the note he alleges originated at Feller’s sale. Circumstances corroborate their testimony, even if they were not, as they are, men of character. When Adam took the $1102 note, on the 6th of March, 1832,.why did he neglect the other demand? He took-the large note for his indemmity, and if the $700 demand would stand in need of renewal in nineteen days afterwards (it was renewed the 25th), why was it omitted when the large note was taken ? Its being omitted then, and renewed in so short a time afterwards, makes the renewal look like an after thought. I have no doubt it was settled; and why, unless for fraud, was it revived ? I cannot support that part of this case. -But he says he has had to pay, and is liable to pay, large sums for his father, as surety. Is it not plain that he became surety with his eyes open ? Among t[ie persons to whom he became surety, is David Kibler. He now wishes to make David’s own debt liable to pay the debt to himself. This would be^ an extraordinary way *of giving a man security. His becoming security with his eyes open, is enough for his case. But, not to rely on that, he holds an ample idemnity against these securityships in his own hands. He stated to Levi Cook that, after giving his father the Feller’s note for his land, he still owed his father a balance, for which he gave him his note. He stated the same thing to Jacob Kibler, on two occasions ; and that the note for the balance was either $500 or $600. Take it at the lowest of these sums, and he owes his father more than enough to indemnify him for the balance on his own small judgment, and for what he is liable to Eig'leberger, David Kibler and Jacob Kibler, and for what he has had to pay on Herbert’s judgment, to say nothing of the four or five bales of cotton he sold last year.”
    The bill was dismissed with costs, and as among the plaintiffs, Adam Kibler was made primarily liable.
    From this decree the plaintiffs appealed on the following grounds :
    1. That the debts being in existence at the time of the conveyance of the land, the plaintiffs are to be regarded as subsisting creditors at that time, and entitled to relief against it.
    2. That the acknowledgment of the notes by Michael Kibler, would prevent them from being barred by the statue of limitations.
    3. That the Chancellor erred in deciding that the statute of limitations barred the plaintiffs’ right to relief, after four years from the discovery of the fraud.
    4. That the Chancellor erred in deciding that the acts of Michael after the conveyance, could not affect the rights of David Kibler.
    
      Dunlap and Summer, for the appellants.
    
      Caldwell and Fair, contra.
   O’Neall, J.

The eases of Eigleberger and Kinard may, appears to me, be put on the same ground. For, although I concur with the Chancellor, that there was not sufficient evidence of the existence of their debts, at the execution of the deed to David Kibler, yet I will concede to them all *that they can ask — that their debts were prior to the accrual of the defendant’s right, and still I think they are not entitled to recover. The right of a creditor to avoid a voluntary conveyance, where the possession is in the donee, arises from the fact that he cannot otherwise be paid out of his debtor’s estate. It is hence, a fraud on his rights and is therefore, as against him, void. But if a creditor should seek to set aside, in this Court, a voluntary conveyance, and it appeared that his debtor had other property, he would be compelled first to exhaust it. This is upon a first principle of equity, “ that he who seeks equity must first do equity.” In the application of this principle, we are required to ascertain what would be justice between the parties : and surely there can be no injustice to a creditor, to say to him, “be paid out of that property of your debtor, to which no other person has any claim.” If he is paid, it is all that he has any right to ask. In the cases before us, the creditors, with a full knowledge of the conveyance to David Kibler, and his actual possession, have stood by for near ten years, and hare suffered other debts, junior to theirs, to acquire prior liens, and the estate of their debtor thus to be consumed. If they had been vigilant, and within any reasonable time after David went into the possession of the land, had made the claim to^ avoid the conveyance, they would have been compelled to exhaust the rest of their debtor’s property, before they could have resorted to that conveyed to him, and out of this property of their debtor’s, they would have been satisfied. By their supineness, this fund has been taken from them, and they cannot now be permitted to make their own laches an injury to another. During the time the defendant David has been in possession, he has made many valuable improvements, and this constitutes another reason why the acquiescence of the complainants, for so many years, in his title, must prevent them from now disputing it.

Were it necessary for the purposes of the case, I should have little hesitation in saying that each renewal of the debt, and taking a new security, was a satisfaction of the antecedent one, and that these renewals could not operate *to keep in existence, a charge on the land which had been previous to them, conveyed away, and the possession of which had accompanied the deed. So, too, I incline to the opinion, that the defendant is protected by the statute of limitations. The statute runs from the discovery of a fraud ; and the relief sought is not to recover the land, but to be paid a debt out of it. It is in the nature of an action of deceit. The injury of which the creditor complains, is, that by the fraud of his debtor, he cannot be paid. This is purely a personal, and not a real action ; and the statute runs from the discovery of the fraud, as the accrual of the cause of action,.and at the expiration of four years, its bar is complete.

As to the case of Adam Kibler, it cannot admit of a question, that he is not entitled to recover. If he is a creditor at all, he is a subsequent one with notice, and as such can have no ground upon which he can say, that the gift is a fraud as to him. But independent of this conclusive objection to his recovery, then is another equally conclusive: all the right of property of Michael Kibler, and the actual possession, had passed from him to his donee, long anterior to the debt to Adam Kibler; he can therefore have no ground, either legal or equitable, on which he can found a claim for relief.

It is ordered and decreed, that the decree of the Chancellor be affirmed.

Johnson and Harper, Js., concurred.