Case ID: tenn_16/html/0393-01.html
Source: Caselaw Access Project
Author: {"author": "Green J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Grisham vs. Grisham & Overton.
    Where A, arrested upon a ca. sa. entered into bond and security to apa pear at court, &c. and appeared and rendered a schedule of his property, stating “that he had mortgaged his land to secure different liabilities, and that he had sold his negroes and other property; had loaned out the money and taken notes for its payment, which notes he had assigned to and placed in the hands of J. H. for the use and benefit of his children, amounting to six thousand dollars.” Held that he was not entitled to be discharged on this statement, under the acts of 1811 and 1824, con* cerning insolvents.
    The court is not bound to discharge an insolvent, unless it is satisfied of the truth of the statement made.
    A judgment upon a ca. sa. bond by the 3d sec. of the act of 1824, must be against principal and surety, and a judgment against the surety alone is erroneous.
    On the 15th of July, 1834, a capias ad satisfaciendum, issued from the chancery court at Carthage, in favor of Jane Grisham against John Grisham, returnable to the January term, 3835, of said court, for the satisfaction of one hundred dollars. _ - ,
    
      The sheriff returned the ca. sa., together with a bond, executed by the defendant, with security, to appear at court, pay the money, take the oath of insolvency, or make a surrender of his property as required fay law. Grisham appeared and gave in a schedule and statement, in which, among - other things, he says he had mortgaged his' land to secure different liabilities, and that he had sold his negroes and other property; had loaned put the money and taken potes for its- payment, which, notes he had assigned to, and placed in the hands of James Houston, of South Carolina, for the use and benefit of his children, amounting to something less than six thousand dollars. Upon this statement, the defendant moved to be discharged under the insolvent laws. The court over-ruled the motion and refused to discharge the defendant; and on motion of the plaintiff, entered up judgment against the security alone; to reverse which, this writ of error is prosecuted.
    O.. Hubbard, for -the plaintiff in error.
    • The judgment in .this case is clearly erroneous; because, 1st. The faqts sworn to, show .very conclusively, that Grisham wag insolvent;-and the form of' the oath, though not a strict, is yet a substantial- compliance with the requirements of the law'. A voluntary conveyance by a person not indebted to insolvency at the time, is good against subsequent debts, 1 Comí. Rep. 1. And, although it is not stated when the assignment took place, whether before or after the existence of- the debt, upon which the cá. sa: issued, yet, inasmuch as it would have been fraudulent to have conveyed or assigned all his property,, if at .the time he owed the debt; and as'he has sworp.-ili was not assigned, for the purpose of defrauding any, ci-e.clit1>qr,, it. necessarily follows, that it must have been assigned before the debt existed. The law says, it is fraudulent to assign all of a man’s property, as to existing debts: the debtor swears he did not assign to defraud his creditors; is not this a direct and unequivocal assertion, when ,taken in connexion with the rule of law, that .the assignment took place before indebtedness? Clearly it is. ...
    2nd. The judgment should have been entered against both principal and surety in the bond. Here it is only entered against the surety.. .
    
      James, Rucks, for defendant in error.
    Can a man fraudulently put all his property out of his own hands, and into the hands of a trustee for his children, and then claim to be discharged under the insolvent.laws?
    ' The substance of the oath required bylaw is, that he ' has not disposed of, or secreted any part of his property, “whereby to receive or expect any benefit or advantage thereof, or to defraud any creditor,” and the court must be. convinced of the truth of this before they discharge him. Act. 1811, chap. 24, sec. 3," 4.
    Here the defendant has the impudence to admit he has sold his negroes for about six thousand dollars, and has put the notes into the hands of a trustee for his children, and asks the court to be convinced that this is not a fraud upon his creditors, and that he is to derive no benefit from the arrangement.
    He makes no surrender of his effects within the 5th sec. of the act of 1811. He does not give a schedule of his notes, nor even the names of the persons who executed them'. Should we go to S. C. and file a bill against Houston to get the notes, they would most likely turn out to have been executed by persons living in Smith county, Ten.- He ought at least to have identified the notes.
    By the act of 1821, chap. 17, sec. 3. it is enacted, if such debtors shall fail to appear at the court to which such process is returnable, or take the oath of insolvency, or malte, a full and fair surrender of his property and effects 0f every description; then and in such cases the said court _ __ _ shall be, and are hereby authorized to enter up judgment on motion, against the debtor and security, for principle, interest and cost, &c.
    By this act he must make a full and fair surrender. Is this a full surrender? Is it a fair surrender? Is it, in fact, any surrender at all?
    Then beyond question, i it was right to enter the judgment. But, it is insisted, the judgment should have been rendered against principal and surety.
    This is a mere objection to the form, for there is a judgment in the same court against the principal.
    If the court shall reverse for this ground, it is made their duty to enter such judgment or decree in this court, as the court below should have entered.
   Green J.

delivered the opinion of the court.

The court was clearly right in refusing to discharge the defendant in this case. The substance of the oath which, by the act of 1811, chap. 24, sec. 3, an insolvent debtor is required to take, is, that he has not disposed of, or secreted any part of his property, “whereby to receive or expect any benefit or advantage therefor, or to defraud any creditor, &c.” By the 4th sec. of said act, the court is required to discharge a party upon such oath being taken, provided it shall “be convinced of the truth thereof.” In this case, how was it possible for the court to be convinced of the truth of an oath, that he had not disposed of any part of his property to defraud any creditor; when in the schedule and statement made by the defendant, he declared that he had disposed of all his property, a greater part of which he had sold, and loaned the money, and assigned the notes for its payment, to a trustee, for the benefit of his children? A more glaring case of fraud cannot be conceived, and in the very face of the acknowledgment of it, the defendant.asked to be discharged, on his taking; an oath, which it is insisted the chancellor ought t ° , , , . to have believed, that this sale of the property and assignment of the notes, were not made to defraud creditors.

The .act of 1821, chap. 17, does not change the act of 1811, in this particular, so that it was unnecessary to say any thing about the manner of the surrender. There was no offer to surrender the notes which had been assigned to Houston, for the benefit of his children; but on the contrary, he had parted with the legal right telecontrol them, when he made the assignment.

But there is error in this judgment. It was entered against the security alone, when by the 3d sec. of the act of 1824, it should have been entered against the “debtor and security.”

The judgment will be reversed, and this court, proceeding to give such judgment as the court below should have rendered, order that judgment be rendered against the debtor, Grisham, and Overton, the security.

Judgment reversed.