Case Name: FRIEDENWALD CO. v. SPARGER
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1901-06-04
Citations: 128 N.C. 446
Docket Number: 
Parties: FRIEDENWALD CO. v. SPARGER.
Judges: 
Reporter: North Carolina Reports
Volume: 128
Pages: 446–449

Head Matter:
FRIEDENWALD CO. v. SPARGER.
(Filed June 4, 1901.)
1. ASSIGNMENTS FOR BENEFIT OF CREDITORS — Justices of the Peace — Seal.
The seal of a justice of the peace is not essential to the validity of an assignment for the benefit of creditors.
2. ASSIGNMENTS FOR BENEFIT OF CREDITORS — Fraud—Misstatements — Exaggerations.
Wilful misstatements and exaggerations by an assignor as to the value of his property, in the absence of other evidence, does not vitiate a deed of assignment for the benefit of creditors.
S. ASSIGNMENTS FOR BENEFIT OF CREDITORS — Schedule of Preferred Debts.
The schedule of preferred debts in a deed of assignment must give the names of the creditors and the amounts, dates and nature of the debts.
4 ASSIGNMENTS FOR BENEFIT OF CREDITORS — Registration— Evidence — Fraud.
The fact that a deed of assignment was prepared and kept to be registered in the event of proceedings against the assignor is not evidence of fraud.
5. ASSIGNMENTS FOR BENEFIT OF CREDITORS — Presumptions— Preferences — Relatives—Fraud.
Debts preferred in an assignment for the benefit of near relatives raises no presumption of fraud, nothing else appearing to show fraud.
Actiow bv The Friedenw'ald Company 'against Sparger Bros, and others, heard by Judge B. W. TimberlaTce, at November Term, 1900, oí the Superior Court of Surry County. From a judgment for the defendants, the plaintiff appealed.
Jones & Patterson, for the plaintiff.
Glenn & Manly, and Watson, Buxton & Watson, and Bur-well-j Walker & Cansler, for the defendants.

Opinion:
MONTGOMERY, J.
James IT. and B. F. Sparger, in November, 1897, being partners in trade, and finding themselves unable to pay their debts in full, made a voluntary assignment of all their property, real and personal, to T. B. McOargo and R. L. ITaymore, for the benefit of their creditors, with preferences. In the body of the deed it was recited that the grantors, as partners, under the film name of Sparger Bros, and James H. Sparger in his individual capiacity, in consideration of the premises, etc., conveyed the partnership property and also' the individual property, real and personal, of James H. Sparger — the partnership property and the individual property of James II. Sparger being particularly described. The deed was signed:
"James H. St auger. (Seal.)
"B. F. Sparger. (Seal.)
"Sparger Bros. (Seal.)"
, The following is the form of the probate: "Surry Oount-y. Personally appeared before me this day James H. Sparger and B. F.'Sparger, who compose the firm of Sparger Bros., •the makers -and signors of the foregoing deed of assignment, and acknowledge the due execution thereof. Witness my hand and private seal. This 6th day of November, 1897.
"Samuel G. Pace,
"Justice of the Peace."
The action was brought by the plaintiffs, who are judgment creditors, to have tire deed, declared void for fraud, and -set aside. On the trial, exception was made to the manner of the signing of the deed by the grantors, and to the probate of the deed on the ground that the Justice of the Peace did not affix his private seal at the end of his signature.
The plaintiffs also alleged that certain of the preferred debts were not described with such particularity as to amount and consideration, as is required by the Act of 1893, chapter 453.
The first two matters complained of on the trial by the plaintiffs were not alluded to' by their counsel in his brief in this Court, and on the oral argument, while not abandoned, were not insisted on.
We see no fault in the ruling of his Honor on either matter. The deed wlas signed by both individuals composing the firm; the indebtedness was recited, and also' the intent to convey both the property of the firm and that of James H. Sparger. It is nsulal for Justices of the P'eace who act in probate matters to attach their private seals to their names at the end of the probate, but 'that act is not essential to the validity of the probate; and there being no dispute as to' the fact that the person who' took the probate was a- Justice of the Peace at the time, we think that the statute is substantially complied with.
As to the alleged failure on the part of the- defendant to properly describe the preferred debts, that matter was passed upon in Brown v. Nimocks, 124 N. C., 417, and we do not feel disposed to overrule tbat decision.
On the question of fraud we have scrutinized the evidence closely, and we think that his Honor was correct in ruling that there was none sufficient to he submitted to the jury. There were letters and 'Statements of the defendants tending to show an exaggeration of the value of their property or a wilful misstatement about that matter. Bait there is mo evidence that in tbe execution of the assignment tbeire w'as any fraud on account of these misrepresentations; nor can we see anything in the subsequent conduct of the defendants going to throw any suspicion on the motive of the parties in malting the assignment. There was no evidence that the defendants bought or sold in any unusual manner, especially on credit, before the assignment, or that their business, wias conducted out of the usual way. Their preferences were permissible under the law at that time, and 'the fact that the deed of assignment was prepared and kept to be registered in case of proceedings 'against them by creditors is no evidence of fraud. Guggenhimer v. Brookfield, 90 N. C., 232.
An honest preference Was allowable at that time. There were some sm'ai'l debts, probably amounting to one-fortieth of the value of 'the assets, preferred for the benefit of near relatives of the defendants. We are of the opinion that such a preference in the general assignment for creditors raises no presumption sufficient to compel the plaintiffs to. show the consideration of 'the debts-, nothing else appearing to show fraud. In Hawkins v. Alston, 39 N. C., 137, the debtor conveyed to his brother the whole of his property. In Jordan v. Newsome, 126 N. C., 553, the debtor preferred his mother-in-law, Who Jived in the same house with him and t'o an amount of more than one-half of the debtor's property.
We see no error in the ruling of his Iíotíor dismissing the action on tire motion for nonsuit, made by the defendants.
No error.