Opinion
(August Term, 1851.)
1. Where a deed of trust conveying a debtor's property for the satisfaction of certain creditors is necessary to support an action against persons claiming as purchasers under executions against the grantor, and it is not shown that, independent of the property conveyed, the grantor had enough at the date of the deed to satisfy other creditors, the party relying upon the deed must produce evidence of the existence of the debts therein mentioned, as the bonds, notes, judgments, etc., or at least of such an amount of them as will show prima facie that the transaction was bona fide.
2. When this prima facie evidence has been given by the grantee, the onus of proving any fraud alleged to impeach the deed is thrown upon the party alleging such fraud.
APPEAL from Settle, J., at IREDELL Fall Term, 1850.
One James R. Feimester was seized of the premises in fee, and (288) on 17 February, 1847, in consideration of $5, as expressed in the deed, he conveyed them to the lessor of the plaintiff in fee, upon trust to sell them and pay certain debts mentioned in the deed and therein stated to be due on notes and bonds made by the bargainor to sundry persons specified. James R. Feimester owed a number of debts. to other persons at the execution of the deed which were not secured in it, and the deed purported to convey the premises and all the personal effects of the bargainor, and assign all debts due to him. Upon some of the debts thus left out, judgments were taken before a justice of the peace, and executions levied on the premises in May, 1847, and at the sheriff's sale the defendant became the purchaser and took a deed. At the trial, on not guilty pleaded, after evidence of the case as above stated, the counsel for the defendant insisted that as he was a purchaser under the judgments and executions of creditors, the plaintiff ought to give evidence that the debts enumerated in the deed of trust, or some of them, were subsisting at the time the deed was executed so as to render it valid as against judgment creditors. His Honor declared that to be his opinion, but the plaintiff declined producing any of the bonds or notes mentioned in the deed and submitted to a nonsuit and appealed.
Guion for plaintiff.
Boyden for defendant.
As the plaintiff gave no evidence that his bargainor retained property sufficient for the satisfaction of his other creditors at the time he made the deed, it would, by force of those acts of 1715 and 1840, be void as against those creditors unless founded upon an adequate valuable consideration. That position cannot be contested. But it is agreed that the debts mentioned in the deed constitute a sufficient consideration to render the deed bona fide and sustain it. So (289) they would if the plaintiff had made it appear that those debts existed, for it has been often held that deeds of trust of this kind are not invalid by reason of the nominal sum stated in them to have been paid by the trustee in order to make the instrument operative under the statute of uses, but that recourse may be had to the debts to supply the consideration necessary to the bona fides of the deed which would otherwise be deficient. It seems manifest, then, that the existence of the debts must be established, or a sufficient number of them, to satisfy the jury that the deed was not intended as a colorable security for fictitious debts, but was made to the intent of honestly securing real debts, for if the deed, instead of purporting to be a mortgage or deed of trust for the security of debts purported to be an absolute conveyance for an adequate consideration in money paid, the deed itself would not be evidence, as against purchasers or creditors, that any part of the money was paid, but the bargainee would be obliged to prove the fact aliunde. Claywell v. McGimsey, 15 N.C. 89. Of course, it is equally necessary the trustee in support of this deed should show the debts it professes to secure, since the debts, as a consideration, stand in this deed in the place of the pecuniary consideration in the other. The Court does not mean to lay it down that the debts must be traced back by the trustee to their origin, so as in the first instance to be conclusively established to be bona fide, for, to the purpose under discussion, the securities for the debts, as judgments, bonds or notes, in themselves, create debts, and, therefore, they prima facie sustain the deed until impeached by its being shown that they were given for pretended and not true debts. Hafner v. Irwin, 26 N.C. 529. But the onus is clearly on him who sets up title under the deed to give the prima facie evidence of the existence of the debts in the schedule, or some of them at least, by producing and proving the evidences of them as (290) constituting the bona fide consideration necessary to support the deed. Indeed, if the law did not impose that duty on that side it would be almost impossible for the other side to investigate the origin and subsistence of the alleged debts, and fraudulent and false recitals would be allowed to establish their truth against those whom it is the purpose of the law to protect.
PER CURIAM. Affirmed.
Cited: Hodges v. Lassiter 96 N.C. 356; Barber v. Buffalo, 122 N.C. 131, 134.