Case Name: Jane C. Dickinson vs. Richard Way and Henry B. Rice
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1851-05
Citations: 3 Rich. Eq. 412
Docket Number: 
Parties: Jane C. Dickinson vs. Richard Way and Henry B. Rice.
Judges: Johnston, Daiigan and Wardlaw, CC. concurred.
Reporter: South Carolina Equity Reports
Volume: 24
Pages: 412–418

Head Matter:
Jane C. Dickinson vs. Richard Way and Henry B. Rice.
Where a judgment, confessed for a much larger amount than is actually due the plaintiff, and intended not only to secure the amount due, but, also, to defeat other creditors, is set aside, at the instance of a creditor, for the actual fraud, the whole judgment is set aside so far as creditors are concerned, and the plaintiff must stand upon the original indebtedness.
Before Dunkin, Oh. at Barnwell, February, 1851.
Dunkin, Ch. The complainant is the widow and adminis-tratrix of Josiah Dickinson, deceased. In October, 1849, the defendant, Richard Way, being indebted to her as administra-trix in a considerable amount, confessed a judgment thereon, upon which judgment execution has been issued, but the complainant has been unable to realize any part of the amount due thereon, inasmuch as the whole of the property of her debtor has been taken to satisfy an execution of the defendant, H. B. Rice; that the property thus seized consists of three slaves, several horses, cattle, provisions, &c. The execution in favor of H. B. Rice was entered on the 11th February, 1848, for the sum of one thousand seven hundred and seventy-six dollars, eight cents. The judgment was confessed on two notes, each for the sum of $885 44. One note bears date 14th February, 1848, payable, with interest, one day after date. The other is dated 11th February, 1848, payable, with interest, six months after the date thereof. The charge is that this judgment was fraudulently confessed, for a much larger amount than was due, and with a view to cover the whole property of the defendant, Way, from his bona fide creditors. The debt to the complainant was of some years’ standing before she obtained judgment thereon. Many of the remaiks which might be made in this case have been anticipated, in the judgment of the Court in the cause of Bowie vs. Free <Sf Rice, heard at this Term. Quoting Roberts, (page 490) it is there said, “ though the debt be bona fide due, the judgment quoad other creditors may be mala fide confessed, i. e. may be confessed with intent to delay, hinder and defraud others of their just and lawful actions, and such intent is to be collected from the circumstances of each case.” The question is not whether any thing was due, but (as urged in that case) “ whether the act done was a bona fide transaction, or a contrivance to defeat creditors.” It is added that the insertion of a false consideration in the deed or in the judgment is an indication that the transaction was, in some degree, colorable.
It appears, from the testimony, that the defendant, Richard Way, is an ignorant man, knows little about business, and (as the witness said) cannot write. The answer of the defendant, H. B. Rice, admits that the judgment of 11th February, 1848, was for a much larger sum than was' due. Indeed, it is very clear, from the statement filed with his answer, that one of the notes, on which the judgment was confessed, to wit, that of the 14th February, 1848, included every dollar that was at that time between the parties. The other note is for exactly the same amount, and is payable, with interest, six months after date. The inquiry is, for what purpose was this note given, and why for this precise amount 7 The defendants differ very materially in their statements. Rice says that, at the time of the confession, he agreed to take up a debt of $300, due by Way to Edward Hayes, secured by a mortgage of two negroes, and that the second note was intended to include this debt, as also Way’s account with him for the current year, (1848,) “ and for any further pecuniary accommodation the said Richard Way might require of the defendant (Rice) in the mean time.” Richard Way’s account of the transaction is, that at the time of confessing the judgment to his co-defendant, he was much embarrassed, and owed more than he was worth — that his co-defendant was well informed of his embarrassed situation, and, “ assuming to act a friendly part towards him, suggested the propriety of confessing a judgment for double the amount the defendant was due him, assigning for a reason therefor that such an act would prevent the other creditors of this defendant from suing him, and that thereby this defendant might be able to save a con siderable portion of his property — that, not knowing what to do, he adopted.the suggestion,” &c. But that his co-defendant afterwards proceeded to purchase up outstanding claims against him, <fcc.
The testimony of Edward Hayes as to the conduct of both the defendants in relation to this mortgage debt, creates a strong doubt whether, at the time of confessing the judgment, the defendant, H. B. Rice, had assumed to pay this debt to Hayes. It is also very clear that some of the demands now claimed by Rice, were not in existence at the date of the judgment — for instance, the note to Freeman, given 24th April, 1849, and the note to Kittrell, dated 26th February, 1849. The evidence of Kit-trell in relation to this matter is very pregnant. He says that he had a demand against Richard Way, for $180 — that, on the 3d July, 1848, he had a conversation with the defendant, H. B. Rice, in relation to the judgment which he held against Richard Way. Rice said the debt was all just, and he did not know how Way could object. The witness offered his claim to Rice for $125. Rice declined it, and witness employed Mr. McKenzie (a member of the bar, since deceased,) to set aside this judgment. tie employed him to sue Way for the money, and to put Rice on his oath about the judgment. He told him if it had to go to the Court of Equity, to carry it there. Witness afterwards received a message from Rice, and had an interview with him. It was at Graham’s Turn-Out, where Rice lived. Rice told witness, that if he (witness) and Way could agree about any property of Way, to be taken in payment of his debt, he (Rice) would make it good to him, as he held the eldest judgment. Witness got four head of cattle and ten head of sheep. It seemed to be understood that he (witness) was to be paid if he would take property, and stop the case that he had directed to be brought. Witness wrote to Mr. McKenzie to drop the suit. Afterwards witness took a receipt from Rice for forty dollars, by note on Way, dated 26th February, 1849. This note now makes part of Rice’s demands.
On the 19 th June, 1849, the defendant, Rice, made out a statement of the amount due by Way to him, on account of Hayes’s debt, Kittrell’s note, $44. and Freeman’s, as well as Way’s account, for the year 1848, and interest thereon, the whole amounting to $595 57, for which aggregate sum he took a note from Way of that date, and gave him a receipt. All the circumstances lead to the conclusion that, at the time of the confession of judgment, 11th February, 1848, only one note was due, by Way to Rice, and that the other note was given, and the judgment confessed, on double the amount really due; for the purpose, as averred in Way’s answer, of covering all his property, and preventing his other creditors from sueing him, and thereby enabling him to save a portion of his property. This, at least, was his view. There are many difficulties in adopting the version of 'H. B. Rice. Why was no written statement prepared at the time, setting forth the object of the judgment? Why was the second note taken for exactly the amount of the other note, but payable, with interest, six months after date, and judgment confessed six months before the note was due ? How is the statement now made, by Rice, reconcile-able with his asseveration to Kittrell, in July, 1848, that the whole amount of the judgment was justly due to him and he did not know how Way could say to the contrary ? Courts should afford little encouragement to contracts such as that alleged by the defendant, H. B. Rice. His co-defendant, embarrassed beyond the means of extrication, confessed a judgment to him, not only for what is due, but for double that amount. “ This was done,” says the defendant, Rice, “ to include the store account of the defendant, Way, for the then current year, which had just commenced, (11th February, 1848,) and for any further pecuniary accommodation the said Richard Way might require of his co-defendant in the mean time.” And all this was to depend on an understanding between the parties, was to be kept to themselves, and the judgment, for a fictitious amount, was to stand as a security to the plaintiff, and a scarecrow to the other creditors of the defendant. The debt to the complainant, Jane C. Dickinson, was due long before the judgment to Rice; so was the debt to Kittrell. Rice’s own demands, in February, 1848, amounted to more than half the value of the defendant, Way’s, property.
If, under these circumstances, a judgment of this character could be sustained, it would afford an irresistible inducement to the insolvent debtor to avail himself of such suggestions as Way says were made to him; and, to a creditor in Rice’s situation, not only to obtain security for his debt, which other creditors had not, but to keep his debtor in his power, and put other creditors at defiance.
Good faith and public policy unite in condemning agreements of this character.
But the intrinsic evidence, arising from the papers themselves, not less than the parol testimony, confirm the answer of Way, to wit, that no more was due to Rice than the amount of the first note, and that the second note was executed, and the judgment confessed, for the aggregate amount of both notes, for the purpose of covering the whole property of Way, and thereby enabling him to hinder, delay and defeat his bona fide creditors.
The sheriff testified that, under the several executions in his office, of which the defendant, Rice, held the eldest, he had sold out the defendant, Richard Way, in December, 1849, and January, 1850; that the amount of the sales was $1592. Part of the property sold was the two slaves mortgaged to Edmund Hayes.
The Court is o.f opinion that the judgment of the 11th February, 1848, must be declared void; but that the defendant, Rice, is entitled, under Hayes’s mortgage, to receive the amount due on the note, to secure which the same was given.
It is ordered and decreed, that the judgment of the 11th February, 1848, be set aside; that, after payment to the defendant, Henry B. Rice, of the sum of three hundred dollars, with interest from the 19th June, 1846, the surplus of the sales made by the sheriff be paid over by him to the execution creditors of Richard Way, according to their respective legal priority. Costs of these proceedings to be paid by the defendants.
The defendant, Henry B. Rice, appealed, and submitted that the decree of the circuit Court ought to be reformed, so as to permit the judgment at law, mentioned in the pleadings, to stand as a security for the amount really and bona fide due to the said defendant, from his co-defendant, Richard Way.
Patterson, for appellant.
Owens, contra.

Opinion:
Dunkin, Ch.
delivered the opinion of the Court.
The principles involved in this case are precisely the same as those discussed in Bowie vs. Free and Rice, heard at these sittings. The evidence is still more direct and abundant; and this Court is well satisfied with the conclusions both of law and fact. The only ground of appeal presented by the brief is that considered and disposed of in Bowie vs. Free. But it has been suggested in this Court that the property of the defendant, Way, is more than sufficient to satisfy the complainant and his other judgment creditors, and that the judgment of his' co-defendant, H. B. Rice, should not be absolutely set aside, but that he should have the advantage of it after the other judgments have been satisfied. One of the grounds, on which the judgment of Rice was set aside, was its tendency to prevent the other creditors of Way, by simple contract or otherwise, from pressing their demands to judgment, and so far as creditors are concerned, he cannot be permitted to derive any advantage from his lien, but must stand on the original indebtedness and come in rateably with the other existing creditors of Way. But, as between Way and Rice, the validity of the judgment was not put in issue by the pleadings, nor was any thing intended to be concluded. These remarks are made in .deference to the suggestions of counsel, and to prevent misapprehension; but none of the facts are before us, either as to a supposed surplus, or the existence of any other than judgment creditors.
It is ordered and decreed that the appeal be dismissed.
Johnston, Daiigan and Wardlaw, CC. concurred.
Appeal dismissed.
Ante p. 403.