Case Name: Joseph M. Terry v. Edmond B. Belcher
Court: North Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1830-05
Citations: 1 Bail. 568
Docket Number: 
Parties: Joseph M. Terry v. Edmond B. Belcher.
Judges: Colcock, J. and Evans, J. concurred.
Reporter: South Carolina Law Reports
Volume: 17
Pages: 568–575

Head Matter:
Joseph M. Terry v. Edmond B. Belcher.
Columbia,
May, 1830.
The surety to a bond to the sheriff', to indemnify him in making a levy, is not-a competent witness for the sheriff, in an action against him for the trespass. A husband cannot be received as a witness, to testify for the benefit of an estate, of which his wife is a distributee, although they live apart, deal separately, and are under bonds not to interfere with the pioperty of each other.
The surety to a promissory note, the holder of which had accepted certain property from the maker in satisfaction, is a competent witness for the holder, in an action, in which the validity of the transfer is impeached as fraudulent upon creditois. His liability was discharged by the acceptance of the property, and would not be revived, although the transfer were avoided for the fraud.
A debtor, although in insolvent circumstances, may, unquestionably, prefer any one of his creditors in the payment of his debts, even after suit com- . menced against him by another creditor.
Retaining possession of a chattel by the vendor, after an absolute sale, is not conclusivo, hat merely prima ficie evidence, that the sale was fraudulent and pretensive_vide Smith v. Henry, 2 Bailey, 118.
Tried before Mr. Justice Gantt, at Edgefield, Spring Term, 1830.
This was an action of trespass, brought against the defendant, who was sheriff of Edgefield District, f ir levying on certain slaves, claimed by the plaintiff to be his property. The slaves were levied on as the property of Stephen Terry, under execution at the suit of William Wash, administrator of the estate and effects of Thomas Jones deceased, for a debt due to the intestate’s estate; and the levy was made at the instance of the administrator', who entered into a bond, with sureties, to indemnify the sheriff. The plaintiff claimed under an absolute bill of sale to him from Stephen Terry, dated 22d February, 1828, and recorded in the office of the Register of Mesne Cou-yeyances for Edgefield District, 26th August, 1828. The de-fence relied on was, that this bill of sale was pretensive, fraudulent, and void, on various grounds.
The action of Wash, the administrator, against Stephen Terry was commenced more than twelve months prior to the date .of the bill of sale; the bill of sale bore-date only a few days previous to the sitting of the Court, at which Wash re covered judgment; and the levy under his execution was made more than three months before the bill of sale was recorded. The slaves remained in the possession of Stephen Terry, after the date of the bill of sale, and up to the time of the levy. This was explained by evidence, that he had agreed to pay wages for them to the plaintiff; but the existence of such an agreement was disputed. At the date of the bill of sale, Stephen Terry was, in point of fact, utterly insolvent; but this Was not generally known, and it was in evidence, that he might have obtained credit, On the faith of the property in his possession. To prove payment of the consideration recited in the bill of sale, which was $600, the plaintiff relied, chiefly, on a note of Stephen Terry, to Johfi Terry, administrator of the estate of William Terry, for $581, dated in 1817, on which one William D. Cooper was surety. This note, John Terry testified, that he transferred to the plaintiff in February,' 1827, at which time the amount due on it had been reduced by partial payments to $551. No part of this sum had been paid by the plaintiff to John Terry, at the time of the transfer, or subsequently; but the plaintiff had under taken verbally to be answerable for the debt, and it was alleged, that he had accepted the slaves now jn dispute in satisfaction of the amount due on the note. The plaintiff also proved, that he bad paid certain executions against Stephen Terry, amounting in all to $251, the greater portion subsequent to the date of the bill of sale. On the other hand it was in evidence, that he had received from Stephen Terry, other slaves, of the value of $275, which he had taken to Georgia, atid sold.
Littleberry Cochran, who was offered as a witness by the defendant, was objected to on the ground, that he was one Of the sureties of Wash, in the bond of indemnity to the sheriff!, The objection was sustained, and the witness excluded,
Joseph P. Jones, another of the defendant’s witnesses, was objected to on the ground, that his wife was one of the distri-butees of the estate of Thomas Jones. In reply to the objection, it was shewn, that the witness and his wife lived apart, dealt separately, and were under bonds not to interfere with the property of each other. The witness offered to release any individual interest, which he might be supposed to have in the result of the suit; but declined interfering with the interests of his wife. He was excluded by the Court.
William D. Cooper, the surety to Stephen Terry’s note to John Terry, was offered as a witness by the plaintiff; and was objected to on the ground, that if the plaintiff failed in this action, the witness would be liable on the note. The objection was overruled, and the witness examined.
Much other evidence was introduced on both sides, and various questions made, which under the disposition made of the case by the Court of Appeals, it is unnecessary to specify. The jury found for the plaintiff, and the case was brought up by the defendant, on a motion for a new trial.
D. L. Wardlaw, for the motion.
Griffin, contra.

Opinion:
Johnson, J.
delivered the opinion of the Court.
The Court neither regards it as a duty, nor do they feel the inclination, to enter upon any inquiry as to the very many facts, which are interwoven into the grounds of this motion. It will suffice to remark of them, generally, that if the Judge was right as to the matters of law, there were too many circumstances in favor of the verdict, to justify this Court in ordering a new trial on the evidence, whatever doubts'we may entertain of the merits. Divesting the case of this feature, the grounds of the motion complain of error in the presiding Judge: 1st, In rejecting the evidence of Joseph P. Jones. 2d, In rejecting the evidence of Littleberry Cochran. 3d, In admitting the evidence of William D. Cooper. 4th, In instructing the jury, that a debtor might indulge his feelings in preferring one creditor to another, even pending a suit against him. 5th, In instructing the jury, that Stephen Terry's remaining in possession of the slaves in ques- lion, after an absolute sale to the plaintiff, was a badge only, and not conclusive evidence of fraud.
1st and 2d. The incompetency of the witnesses, Jones, and Cochran, appears to me so palpable, that it is matter of some surprise that the question has been raised. Cochran is bound by express contract, as the surety of Wash, to indemnify the defendant against this very verdict; and it is difficult to conceive of an interest more direct. The execution, under which the slaves were sold, was at the suit of Wash, the administrator of T. Jones, of whose estate Joseph P. Jones' wife was a distributee. If the plaintiff recovered, Wash was bound by his bond to refund the amount to defendant, and that, of course, would be so much loss to the estate; and there is no principle more clear, than that one cannot be a witness to increase a fund, in which he has an interest. His living apart from his wife, dealing separately, and having given bond not to interfere with her property, cannot vary the question. Separate interests might, it is true, be created by the intervention of trustees, but in law they are identical, notwithstanding any contract that may exist between them. Jones, it seems, thought he had no interest, and therefore was willing to release; but it is understood that he positively refused to relinquish the interest of his wife. He was therefore properly rejected.
3d. It is not perceived, that William D. Cooper had any, even the most remote, interest in the event of this suit. He had before that time become jointly bound in a note with Stephen Terry, which is said to have been discharged by the sale of the slaves now in dispute to the plaintiff. If that be true, there is an end of his liability; if not, the verdict in this case cannot discharge him. If the holder of the note accepted the negroes in payment, as unquestionably he might, then the note is paid; and if he lost the negroes, it was his own fault, or folly, for which Cooper, is not responsible. If he did not, then there is no liability. He was therefore properly admitted.
4th. The fourth question admits of as little doubt. If I were at liberty to form a system of insolvent laws, according to mf own notions of moral right, I should very much incline to provide, that when the fact of insolvency was apparent, creditors, of all grades, and classes, should come in for an equal distribution of the insolvent's estate, and that he should not be permit* ted to give a preference to one, whatever might be (he motive. But even that provision would not reach this case ; for at the time of the sale of these negroes, the fact of Stephen Terry's insolvency had not been judicially ascertained. On the contrary, the witnesses say he could have gained credit on the faith of these identical negroes; and even now, the fact of his insolvency is only known as collateral to the issue in this case. These ai'e, however, useless speculations, for there is no question, that payment to one creditor is good, although the debtor may not have the means of paying all his debts.
5th. The fifth and last objection involves a question of great interest; and l have bestowed on it all the attention, which its importance demands. The result is a conviction, that the vendor's retaining the possession, after an absolute, and unconditional sale of chattels, is not conclusive, hnl prima facie evidence of fraud.
All the cases on this subject, both English, and American, have been put in requisition by Chancellor Kent, in the 2d vol. p. 403, et scq. of his learned Commentary on American law, and have been reviewed with great learning and ability. And to that chapter I will refer, as containing all that is useful on the subject, which is to be found either in the English, or American cases: although I cannot but feel, that I am treading on doubtful ground, when I venture to differ from the conclusion to which that able jurist has arrived, as to the policy of the rule before laid down.
The principle, that all contracts, having for their object a fraud upon the rights of third persons, are void, is concurred in by every one. It arises out of natural right, it enters into all the transactions of life, and constitutes one of the strongest and most essential bonds of security. We differ therefore only in tbe mode of giving it effect. Ordinarily, it is not a matter of much consequence, when the principle is correct, as to the means by which it is to be carried into operation ; for a community can accommodate themselves very readily to any rule, which is well understood, and is reasonable in itself. It does, however, sometimes happen, instances of which arise out of positive legislation, that a positive rule opposed to the good feelings, and usages of the community, is suffered to lie dormant, and inope-patjvp altogether. In other instances, the strong arm of the law has been able to enforce the rule for a time, but even this engine becomes powerless when opposed to the will of a whole community; and the rule is. only remembered for the particular injustice it has done. A wise law-giver should, therefore, inquire whether the rule proposed, even to give effect to a correct principle, is calculated to promote justice, and the happiness of mankind.,
These remarks have grown out of my -own knowledge of the habits of the people of this country, and their mode of thinking and acting, and a firm conviction that the converse of the rule, before laid'down, would do violence to the feelings and opinions of the community; and the cases, to which 1 shall have occasion to refer, will I think sufficiently shew, that they are universal.
An improvident, or unfortunate child, or parent, or a beloved friend, has become embarrassed; his whole fortune is inadequate to the demands upon him, and a sale under the hammer is the only alternative: superabundant wealth enables you to gratify your good feelings iu holding out relief to him, and perhaps lo a numerous family. Is the law so cold, and unfeeling, so stern, and inflexible, that you shall not leave to his use one article of property, which he before owned, but an insatiable creditor may lay his hand upon itl — not even the bed on which he sleeps, or the servant endeared by his fidelity, and whose services, use has rendered, in a degree, indispensalile 1 I think not. And' if such a rule did exist, I doubt still more, whether, on such a case made, a jury could be found, who would give it effect. 'This case is perhaps highly coloured, but, in principle, I cannot distinguish it from any other, where the transaction is honest. Those who maintain the opposite side of the question, predicate their argument on the facilities of practising frauds through this means, and the difficulty of tracing them out; and I agree that there is much truth and good sense in the argument. But a security, although not perhaps wholly adequate, is found in the juries of the country, drawn from the very atmosphere of the transaction, where these things always make the first impression ; and, aided by the suspicion of she law, which throws the burthen of proof on the purchaser, the.y will most usually arrive at a correct conclusion.
In looking into the cases collected by Chancellor Kent, it will bo scon, that neither the English, nor American Courts, even when the rigid rule, that possession of goods after an ab-soluto sale is, per se, a fraud, has been most strenuously maintained, have been able to give it full effect. Thus, in Bucknal v. Roiston, Free, in Ch. 285, an absolute bill of sale of goods, given by way of pledge for money lent, was allowed as an exception. So of household goods under the circumstances, in Cadogan v. Kennett, Cowp. 432. And in winding up his remarks on the English decisions,, the Chancellor remarks, that " it has become difficult to determine, when the circumstance, of the possession not accompanying and following the deed, is, per se, a fraud in the English law, or only presumptive evidence of fraud, resting on facts to be disclosed at the trial." 2 Kent's Com. 408.
In Pennsylvania, where the rule has been more rigidly adhered to, the exception 'of goods taken in execution is allowed. Levy v. Wallis, 4 Dall. 167. In New-Fork, the rule was thought to have been firmly established in Sturtevant v. Ballard, 9 Johns. 337; but it gave way in the case of Bissell v. Hopkins, 19 Johns. 221, where it was held, that it was only prima facie evidence of fraud, and might be explained. And without travelling the rounds of the States, it may be affirmed, that wherever the rule has been attempted, exceptions after exceptions have been allowed, until it is difficult to ascertain, that it is rigidly enforced any where. Perhaps it is more nearly attained in Pennsylvania, than any where else. Now these cases speak a language which is stronger than any argument which can be drawn ab inconvenienti. It is the voice of mankind, repudiating a policy at war with their feelings, and one which Courts of justice must respect.
The case of Kennedy v. Ross, 2 Mill, 125, is set down by Chancellor Kent, as an authority in support of the rigid rule; and it is true, that the language of the Judge, who delivered that opinion, is pretty strong: but he no where lays down the rule, broadly; and on looking into the facts of the case, it will be found, that it fell within the rule, which I have attempted to vindicate. To repel the presumption arising from the possession of the property, aided by the proof that the plaintiff claimed all the property of Dale, he opposed a naked bill of sale; and from Pwyne's case, down to the present day, that has beesi held insufficient, here, aud every where else. And such has been the view always entertained of that case.
The case of Madden v. Day, (ante, p. 337) decided at the,last sitting of the Court at this place, went perhaps further in'support of the rigid rule, than any of our own cases had before gone; but that case has come up on a second verdict, and been re-argued at this term, and will be reviewed by my brother Evans in connexion with the case of Howard v. Williams, (infra.) and I will only refer to his remarks upon it.
With a view to get at the pure question of law, I have avoided ^mixing up with it, the peculiarities of this case, and will only remark in conclusion, that although the Court would have been better satisfied with a verdict for the defendant, there was evidence, that this transaction was fair, which the jury have thought proper to give its full weight, it was their province to decide upon it, aud the verdict must stand.
Colcock, J. and Evans, J. concurred.
Motion refused.