Court Opinion

ID: 3660249
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:12:03.833117+00
Date Added: 2024-06-11T13:14:58.805589
License: Public Domain

The admitted facts that the debts for which J. B. Littlejohn, John Nuttall and Willis Lewis were respectively sureties for T. B. Littlejohn have been paid many years past require the Court to put all the deeds of 30 October, 1827, out of the plaintiff's way, except so far as one of those to John Nuttall may be supported as a security for the balance that may be due from T. B. Littlejohn to his brother on their partnership dealings. So the deed to Thomas B. Lewis, dated 29 February, 1836, for the indemnity of Venable as surety for the debt to John R. Hicks, and not registered until 18 May, 1840, must likewise be declared not to be an effectual encumbrance on the slaves mentioned therein, for the want of due registration. The act of 1820 expressly enacts that a deed of trust not proved and *Page 373 
registered within six months shall, as against a creditor, be held utterly void, and the circumstance of the registration before the plaintiff got his judgment and execution makes no difference, as notice of a deed of trust not duly registered raises no equity against a creditor. Davidson v. Cowan, 16 N.C. 470. The case is, therefore, narrowed down to the questions that can be made upon the deed of 30 October, 1827, as a security for the partnership balances, and the deed of 29 July, 1840,           (504) as a valid security for the debts mentioned in it. As far as the object of the bill is to have those deeds declared void as having been made with a fraudulent intent towards creditors, the Court must hold the bill unsupported. As to the first deed, it is to be remarked that the circumstance of the security being given by one brother to another for an unknown balance of accounts, represented to be large, as the parties believed, and the further circumstance that there was no attempt to settle and ascertain the balance for so long a period as thirteen years, during which time the alleged debtor continued to enjoy the estates conveyed, certainly furnished grounds for suspicion of the fairness of the claim and of the deed made to secure it, and well justified the plaintiff, as a creditor likely to be defeated by the deed, to call the parties to an explanation upon their oaths. But those circumstances are not absolutely conclusive of fraud, either as evidence that there was no debt owing or that the parties intended to deceive the world by the possession being so long with the debtor. For a creditor may honestly obtain a security for a debt, known or believed to exist, though unliquidated, and a preference thus gained by one creditor over another for what may turn out to be due is not unfair. So mere delay, either in settling or collecting the debt, will not of itself impeach the deed, since forbearance may arise from many motives besides that of giving a false credit to a debtor, and in many instances may be attributed to the most benevolent and praiseworthy motives. In the case before us the answers of both the parties, T. B. Littlejohn and J. B. Littlejohn, satisfactorily and fully repel, if to be credited, all those imputations of fraud. They establish, although the debt is not specified in the deed by its amount, that it in fact existed, and exceeded the value of all the property conveyed to secure it. They account for the debt not being ascertained at the time by the state of the business of the firms, and for the subsequent procrastination by the separation of the parties by distant residences, by their fraternal confidence and the natural unwillingness of the                    (505) creditor to distress the debtor. It furthermore is seen that all the property conveyed (except the slave, who died long *Page 374 
ago) was land, of which the possession merely is not evidence of title, and of the conveyance of which notice was given to creditors by due registration. Those statements of the answers must be received as true by the Court, as the case stands, for in all respects they are directly responsive to the allegations of the bill and are in no respect contradicted, even by a single witness. Upon the face of the pleadings, therefore, this deed cannot be declared to have been made with a fraudulent intent to deceive creditors nor to have been kept on foot for that purpose after the payment of all the debts intended to be secured thereby, but it must be declared to be still a valid security for such sum as may be really owing from T. B. Littlejohn to his brother on their copartnerships. With respect to the last deed, dated 29 July, 1840, the Court is led to the like conclusion, much for reasons of the same kind. The answers, being responsive to charges in the bill, are evidence for the defendants, while uncontradicted. They prove the justice of all the debts mentioned in the deed. In truth, the bill does not particularly question any one of them, except those to Brown and the alleged misapplications of money in the master's office. As to each of them the answer of Thomas B. Littlejohn is precise and positive. So is that of Venable in respect to the debt to Brown, with the collection of which he was charged, and for the security of which, with the other debts, he was active in getting the deed in question executed. No one but Littlejohn himself could answer directly to the conversion of the funds in his office, either as to the time or the amount, and he has given an explicit and positive statement as to both, in which the sureties, Venable and Downey, could only concur to the extent of their belief, and to that extent they do fully concur. Assuming the defaults to have occurred, and the other debts to exist, as being thus established, the Court does not perceive any sufficient ground for impeaching the deed.
There were, however, some objections stated in the (506) argument which it is proper to notice.
It was said that as a provision for an indemnity to the sureties in the official bond, it was against good morals and public policy, especially as it includes future as well as past breaches of duty. But we think there is no force in the argument. We see no reason why a person who is entering into a bond as surety for the faithful performance by an officer of his public duties, may not provide in any manner he can for his counter-security. The principal contracts at the time to repay to the surety any money the latter may be compelled to pay for him, and, therefore, he may superadd thereto any further or collateral security. If this may be done when the obligation *Page 375 
is contracted, it must be competent to do so whenever the party apprehends danger, and certainly when an acknowledged default has happened.
It was likewise said that as some of the property conveyed, as the crops, were perishable, and consumed in the use, and as the possession was to be retained by the debtor, the deed is thereby shown to be fraudulent, as appearing to be made, for the case or favor of the debtor.
If it so appeared we should not hesitate to pronounce the deed fraudulent. But the intent to secure any benefit, ease or favor to the debtor is peremptorily denied, and we do not think those provisions in the deed, when considered with other parts of it, do establish such an intent. The possession was to be kept by Littlejohn no longer than the property was required for the purpose of a sale, and as to the period or terms of making the sale he has no voice, but they are to be determined by the creditors at their will.
It is true that some of the crops might be consumed before the sale; but even that might be for the benefit of the creditors, as keeping the property together until the crops growing when the deed was made, in July, would mature and be gathered, and have had in view rather the convenience of the trustee than favor to the debtor. We need not, however, further consider the point at present, since our views are fully expressed          (507) on it in Moore v. Collins, 14 N.C. 137, and have been more recently repeated in Cannon v. Peebles, 24 N.C. 449. If the sale had been delayed so long, or if the proportion, in point of value, of the consumable articles over those of a different character was such as to induce the Court to believe that it was the object or an object of the deed to provide for Littlejohn permanently or temporarily, and not for his creditors, it would be the duty of the Court to pronounce the deed void. But it is seldom practicable, and seldom prudent, to have an immediate sale under such assignments; and until a sale, if to be in a reasonable time, as fixed in the deed or to be fixed by the trustee or creditors, it is more convenient to all parties that the possession should not be changed. We must presume the creditors will be governed by their own interest and not Littlejohn's ease, until the contrary appears, and especially when any view to his benefit is so positively denied. The Court must therefore declare that the plaintiff has not established the allegation in his bill, that the deed of 29 July, 1840, to John R. Hicks was fraudulent, and, consequently, it is supported as a valid deed and security for such sums and debts as may remain due to the several creditors or sureties therein provided for. But should the plaintiff *Page 376 
think proper to proceed no further in his suit, and to dismiss his bill upon the declarations thus made, he may do so without costs, for in the opinion of the Court he had a right, under the circumstances, to call for a discovery upon most of the points on which he asked it. The case, however, is one on which the plaintiff, supposing those two deeds to be fair, and subsisting securities, has a right to relief by having the encumbrances cleared from the property, and to that end to have such inquiries and accounts taken as will ascertain the sums really due on the claims provided for, so that they may be raised out of the property, if sufficient, and the plaintiff get satisfaction out of the surplus if any. Therefore, the plaintiff is allowed to have such inquiries upon any or all of those debts as he may (508) choose, but if they should result against him they will probably be made at his cost.
The plaintiff declined to have the proposed inquiries made.
PER CURIAM.                       Bill dismissed, but without costs.
Cited: Hardy v. Skinner, 31 N.C. 194; Moore v. Ragland, 74 N.C. 346.
(509)