Case Name: Wiley, Banks & Co. vs. John Lawson
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1854-01
Citations: 7 Rich. 152
Docket Number: 
Parties: Wiley, Banks & Co. vs. John Lawson.
Judges: Withers, Whitner and Glover, JJ., concurred.
Reporter: South Carolina Law Reports
Volume: 41
Pages: 152–158

Head Matter:
Wiley, Banks & Co. vs. John Lawson.
X L: executed a deed of certain negroes in trust to pay his debts. The negroes were sold under senior executions against X L., and the purchaser conveyed them to the wife of X L.j so that his marital rights attached: — Held, that this was in effect the removal by X L. or a lien of incumbrance on the negroes; and that they remained in his hands subject to the provisions of the trust deed.
"Where one sells and conveys property, and afterwards destroys or removes a lien or in-cumbrance upon it, such destruction or removal enures to the benefit of his vendee
A debtor running off negroes from Mississippi to Texas, for the purpose of defeating his creditors, is such a fraud as will deprive him of the benefit of the insolvent debtors’ Acts, in this State.
Where a debtor conveys land to a trustee for the benefit of his creditors, his afterwards selling and conveying the land to another, inasmuch as it tends to hinder and delay the creditors, may be such a fraud upon them as will deprive him of the benefit of the insolvent dobtors2 Acts.
Before Frto'ST, J., at Charleston, Fall Term, 1853.
The defendant, John Lawson, of the firm of Dothard & Lawson, of Mississippi, was arrested under a bail writ, September 19, 1853, at the suit of the plaintiffs. He applied for his discharge under the prison bounds Act, and his discharge was opposed on the ground of fraud.
The suggestion contained the following charges, inter alia:
2. That said Lawson is guilty of fraud, in that he ran from the State of Mississippi, over into Texas, ten negro slaves, which he had previously conveyed to one Josiah N. Walton, in trust for the security of this very claim of W. B. & Co., now in suit, and other creditors of him, the said Lawson; and this he did to defraud the said creditors.
5. That said Lawson is guilty of fraud, in that after having executed a deed conveying a certain house and lot in Aberdeen, Mississippi, to Josiah N. Walton, in trust to secure Wiley, B. & Co., and other creditors, he sold the premises to one N. H. Dobbs, without any notice to the said creditors, intending thereby to defraud them of their just rights.
6. That the said Lawson is guilty of fraud, in that he has not included in his schedule certain negro slaves belonging to him, or paid for with his funds ; which said' negro slaves were in his possession in Aberdeen, Mississippi, within the last six months.
7. That the said Lawson is guilty of fraud, in that he about two years since ran off from the State of Mississippi, over into Texas, certain negro slaves, with a view of defrauding his creditors, which said slaves are still unaccounted for.
Much evidence was given upon the various charges contained in the suggestion. It appeared that the defendant, by deed, dated 30th February, 1851, conveyed to Josiah N. Walton two lots in Aberdeen and eighteen slaves, in trust to pay the debts of the plaintiffs, and other creditors, named in the deed; with a condition that if Lawson should pay the said debts, the deed should be void ; and with a power to Walton to sell the property-for the payment of the debts; and with a proviso that, until the property was sold, it should remain in the possession of Lawson. This deed was recorded. After its execution, Lawson sold, with notice, the two lots in Aberdeen, to one N. H. Dobbs. Of the negroes included in the trust deed, or mortgage, as it was called, eight were levied on and sold by the marshal, under executions older than the deed, and the rest were sold by the sheriff under junior executions. Lawson attended both sales, and declared that the trust deed was fraudulent; and at his instance, Walton, the trustee, declined to act under it. The eight negroes sold by the marshal were purchased by Dobbs, and returned into the possession of defendant. Some six months afterwards Dobbs conveyed them to Mrs. Lawson, wife of the defendant, and they were taken to Texas by the defendant, and then brought back secretly by his agent, and sold. He also took with him to Texas, and sold, two other negroes, which he had bought from one Adams, and paid for in notes, and the title to which he had taken in his wife’s name. The money arising from the sales, the defendant said, he had lost at the gaming table, when drunk.
“ The jury were instructed,” said his Honor, in his report, “ on the sixth and seventh charges, that in order to support the allegation of a false schedule, it must be shown that Lawson had, at the time he made the schedule, moneys, goods or effects, in his possession, or in the possession of another for his benefit, which he had not inserted in the schedule ; and that the charge could not be supported by proof that, at some former time, Lawson had money or effects which he had spent or dissipated. It had been urged in the argument, that the sale of the negroes, by Lawson, was a fraud upon the plaintiffs’ rights, under the mortgage; and on this topic, they were instructed that, if the negroes were subject to the liens of judgments and executions prior to the mortgage, and were sold by the marshal under those executions, and purchased by Dobbs, and by him sold or given to Lawson’s wife, that the plaintiffs’ title under the mortgage was extinguished ; and that if by a new title, by the marital right, Lawson again acquired a property in the negroes, it was not a fraud on the plaintiffs’ rights, under the mortgage, if Lawson sold them. Even if they should be of opinion that the mortgage deed was valid, (which was submitted to them on the evidence,) the plaintiffs, notwithstanding the sale by the marshal, had all which they could claim under the deed; and no fraud could be imputed to Lawson, which could support the charges against him, by reason of the sale by the marshal. The title of the plaintiffs was divested, by law, before Lawson sold the negroes. Respecting the sale of the houses, the jury were instructed that, to sell mortgaged land was not such a fraud against the mortgagee, as would deprive the vendor of the benefit of the insolvent debtors’ Acts. The mortgage deed was recorded, and Dobbs had express notice of it; and the sale by Lawson to Dobbs, of the mortgaged land, could not impair the title of the plaintiffs, under the mortgage deed. The negroes bought by Lawson from Adams, had been sold, and the money squandered, long before he filed his schedule.”
The verdict was for the defendant.
The plaintiffs appealed and now moved this Court for a new trial on the grounds, inter alia :
2. Because his Honor erred in charging the jury, that, if they were of opinion that the sale by the marshal and sheriff, in Mississippi, of the defendant’s negroes, was a fair sale, then, the defendant, by the purchase of his wife, acquired a new title, and it was no fraud upon his creditors that he subsequently ran off the negroes to Texas.
3. Because his Honor erred in charging the jury, that the sale, by defendant, of the house and lot to N. H. Dobbs, which he had previously assigned to the plaintiffs as a security for their debt, was no fraud upon the plaintiffs.
4. Because it was proved by the defendant himself, that two of the negroes which he had run off had been purchased, and paid for by notes taken out of the ■ business of the defendant, and therefore in fact belonging to his creditors, and the verdict is clearly erroneous in finding for the defendant on this charge.
Memminger, for appellants.
Simons, contra.

Opinion:
The opinion of the Court was delivered by
O'Neall, J.
In this case, the whole of the facts proved show that the defendant intended to defeat, delay, and hinder the plaintiffs, in the recovery of their debt.
The whole of the defendant's estate, real and personal, two houses and lots in Aberdeen, and eighteen slaves, conveyed to Josiah N. Walton, in trust to pay the plaintiffs and other creditors, have been in some way disposed of, and nothing has therefrom been realized to the plaintiffs. The defendant's interfer-' ence to induce Josiah N. Lawton to refuse to act as trustee under the deed to secure the plaintiffs, is another circumstance strongly indicative of fraud. The declaration of the defendant that that deed was fraudulent, the purchase of eight of the slaves under the marshal's sale, and the subsequent transfer of them to Mrs. Lawson — the purchase by the defendant of two others — the sending them off to Texas, and the alleged subsequent sale of them, without any account of the proceeds — the defendant's interference to prevent the plaintiffs' attorney to assert their claims for the remaining slaves iti the possession of Taylor, clearly show, when added to the facts previously stated, as plain a case of fraud on the part of an insolvent debtor as ever I saw in a court of justice. Still, it may be, if the case rested alone on these facts, after a jury had passed upon them, and come to a conclusion against the plaintiffs, that we might hesitate long in sending it back. But it is a great relief, when there is to be a refusal of liberty on legal grounds, to find, that in applying such legal, rules, we in fact do no wrong to any one, but rather promote the ends of justice.
The Judge, it seems, told the jury, that, as to the slaves sold by the marshal, under a lien senior to the trust or mortgage deed, and by the purchaser transferred to the defendant's wife, " the plaintiff's title was extinguished, and if by a new title, by the marital right, Lawson again acquired a property in the ne-groes, it was not a fraud on the plaintiffs' rights under the mortgage, if Lawson sold them." This instruction supposed that the trustee accepted the deed, and I suppose this was the fact, although it appears that subsequent to its execution, at the instance of the defendant, he attempted to repudiate it. Taking this to be so, I think the instruction was wrong; for the sale by the marshal did not extinguish the plaintiffs' title under the mortgage; it defeated it pro hac vice ; but when the grantor removed the effect of that sale, as by purchasing, or another gave him a fresh title, as by conveying to his wife, the plaintiffs, or rather their trustee, became thereby entitled to the property discharged of the lien. This is, I think, fully demonstrated by all the cases, which declare, that a man cannot aver against his own title. So, too, when a grantor having no title, or a bad title, or an incumbered title, subsequently acquires, perfects or disincumbers the title, the purchaser takes all he has gained. Harvin vs. Hodge, Dud. 23; Reeder ads. Craig, (it should be Garey,) 3 McC., 411. This being so, the defendant's grantee, the trustee for the plaintiffs, had all the rights which the defendant acquired subsequent to the marshal's sale. If the rights of the trustee, given expressly to secure the plaintiff's debt, have been defeated, delayed or hindered by the act of the defendant, it becomes a fraud which they may urge against him. It is true, the defendant and his property were in Mississippi; but putting it out of that jurisdiction, to defraud the plaintiffs, is very properly an objection to his discharge, as an insolvent debtor, everywhere.
In Thomson vs. Linam, 2 Bail. 131, the defendant was charged with the removal of slaves out of this State, as an objection to his discharge under the Prison Bounds Act. The Judge below instructed the jury that it was no objection. The jury, however, thought otherwise, and the Court of Appeals sustained the verdict; and by Harper, J., said, " It is supposed the issue in this case was immaterial, because the Prison Bounds Act, while it provides, that no one shall be entitled to its benefits, who shall fail to make a true schedule of his property, makes no provision for a prisoner's having fraudulently secreted, or made way with his property. The Act would certainly be miserably defective, if it were thus constructed. But it seems to me to be a matter of strict and necessary inference, from the provisions of the Act, that such a fraud shall disqualify a party from being entitled to its benefits." That case is this, with the single exception that the property there was carried from this State, and here from Mississippi. The different localities cannot alter the principle.
As to the ground which complains of the charge in relation to the sale of the houses and lots to Dobbs, although it may be true, that the plaintiffs, under the trust deed, may recover, yet it by no means follows that that discharges the defendant from the consequences which may attach to him, as a fraud, in making this sale. Why did he sell, knowing he had executed a deed in trust for the payment of his debts ? To defeat it, is the plain and obvious answer. Is not this a fraud 1 Beyond all doubt it is, although it may not, in the end, turn out to be successful, for it is calculated to delay and hinder them in the recovery of their debt. A bill in Equity, or an ejectment in Mississippi, for the recovery of the means of paying a debt, is in no sense leaving a debt free from difficulty in its collection. If a debtor makes these extraordinary means necessary by his act, how can he be otherwise regarded than thus guilty of a fraud ?
The motion for a new trial is granted.
Withers, Whitner and Glover, JJ., concurred.
Motion granted.