Opinion
(Decided 22 February, 1898.)
Action to Set Aside Fraudulent Conveyance — Rights of Creditors — Mortgages — Personal Property Exemption.
1. Where, in an action to set aside a mortgage as fraudulent, it is found that the debts secured by the mortgage were bona fide, but the mortgage was fraudulent as to the plaintiff creditors, the latter cannot recover from the mortgagee money paid to him before the levy of an attachment by the creditors.
2. The personal property exemption of a debtor who makes a fraudulent conveyance is not forfeited thereby.
3. In laying off a personal property exemption of a debtor, the property upon which there is no lien must first be exempted.
ACTION tried before Bryan, J., and a jury, at February Term, 1897, of BEAUFORT. The facts are fully stated in the opinion on the former appeal, reported in 119 N.C. 26.
W. B. Rodman for plaintiff.
Chas. F. Warren for defendants (appellants).
This case has been here before and is reported (73) in 119 N.C. 26. A new trial was awarded in that appeal, the case has been retried, and it is here again.
The record in this appeal contains forty exceptions, many of them being the same in substance and effect, expressed in different forms and and in different language. They have all been considered by the Court, but it is not deemed necessary or profitable to discuss them separately in this opinion. In our opinion they do not entitle the defendants to a new trial. None of the evidence introduced by the defendants, and none of the evidence offered and rejected by the Court (except that which was clearly incompetent, and so decided to be on former appeal), tended to disprove the facts that the Court had held in the former appeal made the conveyance fraudulent; and the burden of proof was on the defendant.
But in our opinion the judgment is erroneous, and the defendant's exceptions to this are sustained to the extent of causing it to be modified.
As it is found that the debts named in the trust and mortgage to Arthur and to the defendant were bona fide, the defendant Phillips should not be held liable for the money paid on these debts (74) before the levy of the attachment. The defendant Phillips should only be held liable to plaintiff for the value of T. E. Warren's half of the property at the date of the levy of the attachment. The defendant T. E. Warren is entitled to his personal property exemption. Gamble v. Rhyne, 80 N.C. 183; Commissioners v. Riley, 75 N.C. 144; Duvall v. Rollins, 71 N.C. 218.
It appeared on the former appeal that the defendant T. E. Warren, was the owner of $400 or $500 worth of personal property, not included in these assignments, and that there were judgments at that time against him in favor of other creditors. It is therefore probable that his personal property exemption has been assigned to him. If it has, he will be entitled to retain the same; and if it does not now amount in value to $500 he may have the deficiency made good by any other personal property he may have. And if there is a deficiency of said Warren's personal property, including what has heretofore been allotted to him as an exemption, as well as that which has not, to amount to $500, then this deficiency must be allowed him out of the amount of the plaintiff's recovery in this action. But as the plaintiff has a specific lien on the amount of his recovery, the defendant Warren's other personal property must be first resorted to in allotting this exemption, and the amount recovered by the plaintiff in this action can only be resorted to for the purpose of supplying and deficiency that may be after appropriating his other personal property.
If any part of the recovery of the plaintiff, based upon the value of the property attached, shall be taken to make out the personal (75) property exemption of the defendant T. E. Warren, this amount will be deducted from or entered as a credit on the judgment against the defendant Phillips, but not against Warren.
We see no reason why the plaintiff should not recover his costs against both defendants Warren and Phillips. The judgment will be modified as indicated in this opinion.
Modified and affirmed.