Summary
In Houston v. Bogle, 32 N.C. 496 (504), Pearson, J., says: "It is settled, that the Legislature cannot pass any declaratory law or act declaring what the law was before its passage, so as to give it any binding weight with the courts.
Summary of this case from Bank v. DerbyOpinion
December Term, 1849.
1. Before the passage of the act of 1840, ch. 28, no voluntary conveyance of property, even to a child, could be upheld to defeat an existing creditor, if the creditor could find no other property of his debtor out of which to obtain satisfaction.
2. The act of 1840, ch. 28, applies only to voluntary conveyances made after that act went into force. Its application to prior voluntary conveyances would be unconstitutional, as it is not the province of the Legislature, but of the judiciary, to declare what the law was before the passage of any act. The Legislature cannot divest vested rights.
APPEAL from the Superior Court of Law of LINCOLN, at Fall Term, 1848, Moore, J., presiding, to the Supreme Court at Morganton, and thence transferred, at August Term, 1849, to the Supreme Court at Raleigh.
This was an action of trespass vi et armis, brought to recover damages for wrongfully taking and selling a number of slaves. The material facts of the case are these:
The plaintiff offered in evidence a deed of trust, executed by one William L. Davidson, conveying the negroes in controversy to him for the purpose of securing a large debt which the said William L. Davidson owed to one Theophilus Falls, and several other smaller debts, due to other persons, for which the said Falls was surety. The deed was executed 20 February, 1833, the day it bears date; was proved before the clerk of Iredell County Court of that county and was registered on 26th (497) of the same month. The plaintiff proved that the defendant took the said negroes from the possession of the said W. L. Davidson, and sold them on 20 May, 1840. The plaintiff also proved the value of the slaves.
The defendant then showed that John D. Graham and wife commenced a suit in equity against George L. Davidson, the father of the said W. L. Davidson, in 1829, and then offered in evidence the report, account and decree in said cause, after it was carried to the Supreme Court. The defendant proved by the said decree that G. L. Davidson was one of the executors of one Conner, the father of the wife of the said John D. Graham, and as early as 1809 he was appointed the guardian of Mrs. Graham (then Elizabeth E. Conner), and as the executor of the said Conner, and subsequently becoming the guardian of E. E. Conner, he was indebted to J. D. Graham and wife in the sum of $3,958.69 on 1 September, 1826. This amount of indebtedness arose mainly from the defalcation and insolvency of one Work, who had been a guardian, with the said Davidson, of the said E. E. Conner, and of an erroneous construction which the executor of said Conner had put upon his will in the division of the estate. The defendant also offered in evidence a decree in the Supreme Court, which Andrew Allison obtained against the said George L. Davidson in 1832. By reference to this decree it appeared that G. L. Davidson was indebted to the said Allison on 1 September, 1826, in the sum of $2,046.16. It was also proved by a deed of trust, executed by G. L. Davidson, that the said G. L. Davidson owed debts by bonds to different persons to the amount of $231.88, contracted previously to 1 September, 1826, which at that time and for several years after remained unpaid. It was proved that in June, 1825, the said Davidson obtained a discount at the branch of the old State Bank of North Carolina at Salisbury, for $731. In (498) relation to this debt the cashier of said bank stated that by reference to the books of that branch of the bank it appeared that the note was never renewed, but whether it was paid at maturity or not, he could not say. It was also proved that the said G. L. Davidson was bound as the surety of his son, W. L. Davidson, for $450, which he assumed to pay, and which he did pay, but at what time it was not stated. The whole amount of indebtedness thus proved is $7,507.83. The defendant also proved by the cashier of said branch bank that G. L. Davidson was one of the sureties of one Simonton in a note discounted at said branch bank in January, 1826, for $3,705, and that after this time no further discount was obtained by said Simonton of any new note, nor of any note in renewal of the one above mentioned. It was in evidence that Simonton died in the spring of 1826, having made a will, of which he appointed the said G. L. Davidson one of the executors, and possessed of an estate of $70,000 or $80,000, which proved to be largely insolvent. The defendants also proved that the said G. L. Davidson was a surety for different persons who had notes discounted at the said branch bank in June, 1826, amounting to the sum of $4,124, but whether said notes were paid at maturity or not, the cashier could not state. But he stated that no further discounts were obtained by any of those persons in renewal of the said notes. He also stated that it was the universal practice of the said branch bank to require all notes offered for discount to be made payable ninety days after date, and that if the notes were not taken up in thirty days after they fell due, to put them in suit. It was proved that all the individuals for whom the said George L. Davidson was bound as a surety in bank, except Simonton, were perfectly good and continued so, and one of the persons for whom the said G. L. Davidson was bound as above mentioned was examined, and stated that he paid off the debt which he owed in bank. There was no evidence that G. L. Davidson had ever paid (499) any part of the several debts for which he was bound as surety in bank. The defendant proved that J. D. Graham and wife obtained a final decree in their suit against G. L. Davidson at December Term, 1839, of the Supreme Court, caused an execution to be issued thereon shortly thereafter, directed to the Sheriff of Iredell County, by virtue of which the defendant, as sheriff of said county, levied upon and sold the negroes in controversy. The defendant also read in evidence a deed of trust executed by the said G. L. Davidson to George F. Davidson, dated 20 November, 1831, by which he conveyed six negroes, by name, two tracts of land and other property, in which deed was the following clause, "and all other species of property that I have any right to and not thought of at this time, whether real or personal."
The plaintiff read in evidence a bill of sale from G. L. Davidson to his son, W. L. Davidson, dated 12 December, 1831, by which G. L. Davidson conveys to his son, W. L. Davidson, negro Hannah and her two children (a part of the negroes in controversy) for the consideration of $450, that being the value of said negroes.
The defendant then showed that John D. Graham and wife in January, 1833, in their said suit against G. L. Davidson obtained an order of sequestration, and that, in execution of the same, the clerk and master, on 2 February thereafter, issued a writ to the sheriff, who took from G. L. Davidson a bond on 14 February, 1833, and at the same time left with him a bond for W. L. Davidson, which was not executed until the month of April following. The negroes mentioned in the said bond are a part of the same sued for, and are the same that are mentioned in a deed, subsequently offered in evidence by the defendant, from G. L. Davidson to W. L. Davidson.
The defendant then proposed to offer evidence to prove that the deed of trust which the said W. L. Davidson made to (500) the plaintiff in this action was made to hinder, delay and defraud J. D. Graham and wife of the debt which they were seeking to recover of G. L. Davidson. This evidence was rejected by the court. It was also proved that W. L. Davidson retained the possession of the property conveyed by him to the plaintiff, using it as his own, until it was levied upon by the defendant under the execution that issued upon the decree which J. D. Graham and wife obtained against G. L. Davidson.
The plaintiff then proposed to read the registered copy of a deed for slaves from G. L. Davidson to the said W. L. Davidson, which was received, upon proof of the loss of the original. From this deed it appeared that G. L. Davidson conveyed to the said W. L. Davidson, on 1 September, 1826, a part of the slaves in controversy, and the others it was proved were the increase of those that were conveyed, except Hannah and her two children. The said deed recited a consideration of $1,500, no part of which was ever paid, because the said deed was intended and so understood by the parties to be a deed of gift. Among the negroes mentioned in the said deed was one by the name of Lucy. W. L. Davidson stated that this negro Lucy was given by him to G. L. Davidson in exchange for the negro Hannah and her two children in 1831, which he conveyed to the plaintiff by the deed of trust, which had been read in this trial, from him to the plaintiffs. He also stated that the negro which he gave in exchange was worth as much as Hannah and her two children. The plaintiff also offered in evidence a bill of sale from George L. to the said W. L. Davidson for Hannah and her two children, dated 12 December, 1831. It was proved that all the property specifically mentioned in the deed of trust executed by G. L. Davidson on 20 November, 1831, had been sold by the trustee, and he stated he believed the proceeds of the sale (501) were sufficient to pay the debts secured by the deed. It was in evidence that the negro Lucy had been sold by G.L. Davidson, the trustee, at the same time he sold the other property. And there was no evidence that the trustee had ever claimed Hannah and her children, of W.L. Davidson, though he had had the actual possession of them since. . . . December, 1831. The plaintiff proved that when G.L. Davidson made the deed to his son, W.L. Davidson, on 1 September, 1826, he reserved to himself twenty-two negroes, which by the evidence of different witnesses were worth from $6,850 to $7,700, a tract of land worth $4,000, and other personal property of the value of $1,200; and one of the witnesses, W.L. Davidson, who stated that his father retained twenty-two negroes, which were not conveyed to any one, was called upon to give the names of them; he mentioned nineteen by name, and stated that there were others whose names he could not recollect.
The defendant's counsel objected that the conveyance from G. L. to W. L. Davidson, of 1 September, 1826, was fraudulent in law, if the said G. L. Davidson did not at the time he made said conveyance retain property fully sufficient and available to pay all the debts for which he was bound, as well as those in which he was the principal debtor.
Though the said G. L. Davidson did, at the time he made the said conveyance, retain property fully sufficient and available to pay his debts, yet the said conveyance was fraudulent in law if he did not keep said property to satisfy the debt of the said J. D. Graham and wife when they sued out their execution.
The court instructed the jury that G. L. Davidson was under the same legal obligation to pay his surety debts as he was the debts in which he was bound as principal debtor only. If the property which he retained at the time he made the voluntary conveyance to his son was not fully sufficient and available to pay all his liabilities, by reason of the insolvency (502) of one or more of the individuals for whom he was bound, the deed would be fraudulent and void as against his creditors. But if the debts for which he was bound as surety were paid off by the principal debtors, and he thereby exonerated, the said deed would not be fraudulent in law, if he retained property, at the time he made said voluntary conveyance, fully sufficient and available to pay all his other debts. The court further instructed the jury, if the said G. L. Davidson, at the time he made the said voluntary conveyance, retained property fully sufficient and available to pay his own liabilities, provided the debts for which he was bound as the surety of others were paid off by them, the said deed would not be fraudulent as against the said J. D. Graham, though G. L. Davidson had no property at the time J. D. Graham took out his execution.
Rule for a new trial because of the reception of improper and rejection of proper evidence, for permitting improper remarks to be made by the plaintiff's counsel in his address to the jury, and for improper instructions to the jury. Rule discharged. Judgment and appeal.
Craige, Bynum and Alexander for plaintiff.
Osborne, Boyden and Guion for defendant.
The act of 1840, ch. 28, sec. 4, enacts that no gift by one indebted shall be hereafter taken and held to be fraudulent and void in law, property at the time fully sufficient and available for the satisfaction of all of his then creditors being retained by such donor.
A very interesting question upon the construction of this statute was decided in the court below, and was ably argued in this Court. Are the debts for which the donor is bound as surety to be taken into the estimate, in ascertaining the amount of his indebtedness at the time of the gift, and if so, is (503) the property which is owned by the principal to be taken into the estimate in ascertaining whether such donor retained property at the time sufficient and available for the satisfaction of all his then creditors?
We do not feel at liberty now to decide the question, because this case does not come within the operation of that statute. In September, 1826, one George L. Davidson, being indebted to one Graham in an amount exceeding $3,000, made a voluntary conveyance of the slaves for which this action is brought, to his son, William L. Davidson. In 1829 Graham commenced a suit in equity for the recovery of the debt. In January, 1833, by an order in the cause, George L. and William L. Davidson executed a bond for the forthcoming of the said slaves. The cause pended until 1839, when Graham obtained a decree for a large sum. Execution thereupon issued, and the defendant, as sheriff, took the slaves from the possession of William L. Davidson and sold them in May, 1840. In February, 1833, William L. Davidson executed to the plaintiff a deed for the slaves, in trust for the payment of debts. And in September, 1840, this action was commenced for seizing and selling the slaves.
The statute was passed afterwards, and the question is, can it have any effect upon the rights of the parties in this case, or change the law, so far as they are concerned, from what it was at the time their rights vested? According to the reasoning in the opinion in Arnett v. Wanett, 28 N.C. 41, by a proper construction of the statute, the word "hereafter" refers to the decisions of the courts and not to gifts, and the Legislature intended to say, not only what the law should thereafter be, but what it had been before. If such was the intention, it is an excess of authority, and it is null and of no effect. The right to make laws is vested in the "General Assembly." The right to decide what the law is and what it was is vested in the Supreme Court. The assumption of a right by the (504) "legislative power" in December, 1840, to instruct "the supreme judicial power" how the law shall be "taken and held" to have been in 1826 or in May, 1840, is an infringement of the distribution of powers made by our form of government, and a breach of the fundamental principle set forth in the Bill of Rights, sec. 4: "The legislative, executive, and supreme judicial powers ought to be forever separate and distinct from each other." It is settled that the Legislature cannot pass any declaratory law or act declaring what the law was before its passage, so as to give it any binding weight with the courts. A retrospective statute, affecting or changing vested rights, is founded on unconstitutional principles, and consequently void. 1 Kent Com., 455, and the cases cited.
If, as the case was before the act of 1840, Graham, as an existing creditor, had a right to treat the gift of his debtor as void, and to subject the slaves to the payment of his debt; if the defendant, as sheriff, had a right and was bound, in discharge of his duty to seize and sell the slaves; if the purchaser at such sale acquired a valid title, and if the plaintiff and William L. Davidson, under whom he claimed, had no title as against such creditor, sheriff and purchaser; if such was the law, and it was the intention of the act of 1840 to change the law, so as to divest Graham of his rights, to make the defendant liable to this action, to deprive the purchaser of his title, and to give a right of action and the title to the plaintiff, when he had neither before — it was an attempt to violate vested rights, and to take the property of one citizen and give it to another, which this Court feels bound firmly to resist. A legislative act which deprives one person of a right and vests it in another, is not "a law of the land" within the meaning of the Bill of Rights, sec. 12. "No freeman shall be deprived of his life, liberty, or property, but by the law of the land." Hoke v. Henderson, 15 N.C. 15. (505)
In Arnett v. Wanett, 28 N.C. 41, the first point was decisive of the case, and it was not necessary to decide whether the case came within the operation of the statute. In treating of it, the opinion is confined to the inquiry as to the construction to be given to the word "hereafter." The power of the Legislature to pass an act affecting vested rights and title to property, by declaring how the law should be "taken and held" to have been before the passage of the act, was not taken into consideration.
As this case does not come within the operation of the act of 1840, the only inquiry is, What was the law at the time the right of the creditor attached and the property was taken and this action commenced? The gift of the debtor to the son was voluntary. The creditor had an existing debt; and it is admitted that when he obtained his decree and sued out execution, the debtor was insolvent, and there was no other property to which the creditor could have recourse for the satisfaction of his debt. The matter was reduced to this: The donee must give up the property, for which he had paid nothing, or the creditor must lose a debt existing at the time of the gift. This is settled by the case of O'Daniel v. Crawford, 15 N.C. 197. That decision has been much discussed. We are entirely satisfied of its correctness, giving due consideration to the supposed expression of the opinion of the Legislature. We believe the reasoning upon which it is founded is conclusive, and it has been cited and approved by repeated adjudications of this Court. Jones v. Young, 18 N.C. 352; Arnett v. Wanett, 28 N.C. 41; Smith v. Reavis, 29 N.C. 341. In 2 Kent Com., 442, that learned jurist says: "The very able decision of the Supreme Court of North Carolina in December, 1833, in O'Daniel v. Crawford, stands out firmly opposed to this enervating infirmity. It has established, by argument and authority, resting on the soundest foundation, the rule that no voluntary conveyance of property, (506) even to a child, will be upheld to defeat an existing creditor." By defeat he means to convey the idea that satisfaction cannot be otherwise obtained. We add nothing to the reasoning or the authorities by which the law of that case is supported.
The judge erred in his instruction that the gift was not fraudulent and void as against Graham, though George L. Davidson had no property at the time Graham took out his execution.
PER CURIAM. Judgment reversed, and a venire de novo.
Cited: Phelps v. Chesson, 34 N.C. 200; Black v. Saunders, 46 N.C. 68; Southerland v. Harper, 83 N.C. 203; Clement v. Cozart, 112 N.C. 418; Epps v. Smith, 121 N.C. 162; Wilson v. Jordan, 124 N.C. 709; Greene v. Owen, 125 N.C. 214.