
    PETER ADAMS vs. DAN ALEXANDER & WILLIAM F. ALEXANDER.
    It is no objection to a man’s taking the insolvent debtor’s oath, under our act of Assembly, that he has conveyed, in a deed of trust to fy certain, creditors, an amount of property, greater in value than the amount of debts secured by the deed, when he sets forth the deed in his schedule and surrenders all his resulting interests.
    When one, who applies to take the insolvent deb tor’s, oath, upon rendering a schedule, sets forth in his schedule that he has made a deed in trust of certain property to satisfy certain creditors and surrenders all his interest in the property mentioned in such deed, it is still competent for the opposing creditor to have an issue made up whether the said deed is not fraudulent, and if found fraudulent by a jury, to cause the debtor to be imprisoned, until he surrenders the property itself.
    This was an appeal from the judgment of the Superior Court of Law of Guilford Cotinty, at Spring Term, 1841, his Honor Judge Pearson presiding. The defendants were arrested on a ca.sa. issued on a judgment obtained against them by Peter Adams. Having entered into bond, given due notice and filed their schedule, all according to the act of Assembly for the relief of insolvent debtors, they appeared at court and prayed to be admitted to take the oath prescribed by the act. In their schedules respectively among other things, each of them set forth a deed of trust, which he had made, conveying certain property to a trustee, to be sold for the payment of certain debts; and each of them made a surrender in the following words, to wit: “I hereby surrender all interest which I have orean have, directly or indirectly, in and. to all the property and estate conveyed in the deed of trust above referred to; and I have herein and hereby surrendered all the estate, belonging to me and now recollected by me, and I furthermore surrender all property, interest and title, to which I may be entitled, directly1 or indirectly, on earth, which may not now be recollected by me.” The plaintiff, Peter Adams, suggested fraud on the part of the defendants, and offered, under the direction of the court, to make up the following issues:
    1st. The defendants are guilty of fraud by making fraudujent; conveyances of their property to delay, let and hinder the plaintiff in the collection of his money.
    2d. The defendants are guilty of fraud in concealment of debts and property, sufficient in value to pay the debt or debts with which they are charged in execution; and the plaintiff offered to make the following specifications of fraud: 1st, that the defendants have and own an. interest in the property described in the several schedules of more than the value of the debt or debts, with which they are charged in execution, which they have conveyed in trust, whereby to secure the same, and expect profit and advantage, whereby to defraud or deceive the plaintiff. 2dly. The defendants have money, which, added to the estate or property described in their several schedules filed, and copies of trust deeds filed, makes a sum. greater than the debts they justly and truly owe, including the plaintiff’s debt. 3dly. That the defendants executed, contrived and devised the deeds of trust (copies of which are filed) of malice, fraud, covin or collusion, to the end and purpose and intent to delay, hinder and defraud the plaintiff, to prevenMhekproperty from being made subject to the payment of the plaintiff’s debt within a reasonable time, and to secure the enjoyment to themselves. 4thly. That the defendant Dan Alexander has one hundred shares in the State Bank of North Carolina; and the said Dan Alexander has conveyed the said hundred shares fraudulently, with a view, purpose and intent as described in the third specification.
    But it was the opinion of the court that it was not material, whether the defendants had set forth in the schedule, property, money, or effects, amounting in value to more than sufficient to pay all the debts they justly and truly owed, including the plaintiff’s debt, which issue the plaintiff’s counsel insisted on submitting to the jury. But supposing that to be the case, it was, in the opinion of the court, no reason why the defendants, being taken on a ca. sa.} for a debt contracted in the year 1839, might not be permitted to file schedules of their property and take the oath. The court was also of opinion that it was not material, whether the defendants, or either oí them, were guilty of fraud, by making fraudulent conveyances of .their property to delay, let or hinder the plaintiff in the collection of his money; which issue the plaintiff’s counsel proposed to be submitted to a jury,- and under which he proposed to shew, that, in October, 1840, the defendant Dan Alexander made a deed of trust to one William S. Alexander, including all of his property, to an amount much greater than the debts mentioned in the said deed of trust, with an intent to hinder, delay and defraud the' plaintiff; and to shew, that, in March, 1841, the other defendant, William S. Alexander, made a deed of trust to one Harris, including all oí his property, to an amount much greater than the debts mentioned in the said deeds of trust, with intent to hinder, delay and defraud the plaintiff. But even supposing such to 'be the fact, it was, in the opinion of the court, no good reason why the defendants, taken under a ca. sa. for a debt contracted in 1839, might not be permitted to file their' schedules, setting out the trust resulting to them, and take the oath. Under the direction of the court,- the following issue was submitted to the jury: “ Have the defendants, or either of them, concealed any property, money or effects belonging to them or either of them, or held by any person or persons in trust for them or either of them? and have they omitted to set forth the same in their schedules respectively? and do the schedules now filed by them respectively setforth' and make a full disclosure and discovery of all thé property, money and effects belonging to them, or either of them, or property and money held by any person or persons in trust for them or either of them?” The jury found the issue in favor of the defendants. Whereupon the defendants’ counsel moved that they be permitted to take the oath; but the plaintiff, being dissatisfied with the opinion of the court, as to the materiality of the issues proposed by him in addition to the issue submitted, prayed an appeal to the Supreme Court, which was granted.
    
      J T. Morehead for the plaintiff,
    
      Iredell for the defendants.
   Ruffin, C. J.

The defendants were arrested upon a satisfaciendum, at the suit of the plaintiff, and gave bond for their appearance, to take, the benefit of the act ^ relief of insolvent debtors. Each of the defendants filed a schedule, and gave the proper notice of his intention to avail himself of the benefit of the act; and moved the court to swear to his schedule and be discharged. On the 13th day of October, 1840, D. Alexander conveyed to a trustee lands and slaves, and a number of other chattels, in trust, to sell after the first day of January, 1842, and out of the proceeds pay certain debts in the deed enumerated; and in the event of the said debts being paid, without a sale of the property, or that any part should remain unsold, after pay-i'ng the debts, then in trust to re-convey to the said D. Alexander. On the 25tb of March, 1841, the other party,. W. F. Alexander, made a similar deed, whereby he conveyed lands and assigned his debts to a trustee upon the like trusts-Each of the defendants annexed to his schedule a copy of the deed of trust by him made; and, in the schedule, each assigned “ all the interest resulting to him in the property, or proceeds of sale thereof, conveyed by the deed of trust, of which the copy is filed herewith, after satisfying the debts secured thereby.” The plaintiff opposed the motion of the defendants, and suggested that they ought not to be discharged, because the defendants had respectively set forth, in their schedules,, property, money and effects of value more than sufficient to pay all the debts they justly owed, including that to the plaintiff. And the plaintiff prayed the court to direct an issue to be made up thereon and tried by a jury. But the court refused the motion of the plaintiff, because, admitting the suggestion to- be true,- it furnished no reason, why the debtors should not schedule or assign their property in this proceeding and take the oath, and be discharged.

The plaintiff also suggested fraud and concealment of property and effects by the defendants; and, particularly, that the deeds of trust, made by the defendants respectively and referred to in their schedules, were made with the intent to defraud and delay the plaintiff and other creditors of the recovery of their debts and to re’serve and secure a benefit to them->selves. And the plaintiff prayed the court to direct issues aceordingiy to be made up as to each of the said deeds, and tried by a jury. But the court was of opinion, that it was not material, whether either of the deeds was fraudulent or not; and, supposing it to be so, that it furnished no good reason, why the defendans might not be permitted to file schedules, setting out therein the trusts resulting to them, and take the oath; and therefore the court refused this prayer of the plaintiff also.

The court then directed an issue in the following form: Hath the defendants or either of them concealed any property, money or effects, belonging to them or either of them, or held by any person in trust for them or him, and omitted to set forth the same in the respective schedules, by the defendants filed? And do or do not the said schedules respectively set forth and make a full disclosure and discovery of all the property, money and effects belonging to the defendants respectively, or held by any person in trust for them or either of them? Upon that issue, the jury found in favor of the defendants; and the plaintiff, being dissatisfied with the opinions of the court before mentioned, appealed.

Upon the first point made at the trial, this court entertains the same opinion his Honor gave. It is said, on the contrary, that the terms of the oath, and all the provisions of the act, taken together, show, that only the case of a debtor, who is insolvent, was in the contemplation of the legislature; and therefore a person, who is able to pay his debts and puts into his schedule more property than will pay all of them, is not within the act. It is very clear, that no other case was thought of, but that of insolvency; because it was not expected, that any person, fully able to pay all his debts would apply to take the benefit of the act. But there is nothing to prevent one in that situation doing so, should he happen to be under the necessity of making the application, as the means of being enlarged from imprisonment. The oath is, that the schedule is true, and that the debtor has not “any other estate” of the value of the debt. The object of the law is to enforce the surrender of all the debtor’s property, so that the debt may be paid altogether, or as far as the property will go. When the surrender of all is made, whether that be little or much, the debtor is to be enlarged. And it certainly never can be imputed as a crime tothedebtorj for which he is to be continued in prison, that he has surrendered too much property; more than will pay all his debts. It will not indeed often occur, but a case may easily be conceived, where a stranger, whose property was in a distant country and unknown here, might find the surrender of it the only means of escaping the jail, because he could not immediately find a purchaser. It is not uncommon where the system of bankurptcy is established, that although the debtorcould notimmediately commandhismoney, andso was properly declared bankrupt, for not punctuallypayinghisdebts,yet his estate, when got in by the assignees, pays twenty shillings in the pound and leaves a surplus tor the bankrupt himself. The proceedings under our act upon scheduled property are of the nature of an assignment in bankruptcy; and the same principles are applicable to both in the point now under consideration.

Upon the next question, the opinion of this court differs from that of his Honor. The fourth section of the act for the relie! of insolvent debtors, Rev. St. ch. 58, requires the debtor “to set forth an exact account of his estate and all other circumstances relating thereto;” andby the 11th section all the estate, effects and debts, contained in the schedule, are vested in the sheriff, who is to sell the estate and collect the monies and pay the whole into court, to be distributed among all the creditors, as mentioned in the next section. It is to be remembered also, that the 10th section, which gives the issue to the creditor, enacts, that, if the jury finds any fraud or concealment of effects, the debtor shall be adjudged tobe imprisoned, until he make a full and fair disclosure, by filing a new schedule; and, then, by giving a new notice, he may at the next court take the oath and be let out of prison. This last provision was introduced by the act of 1830; that of 1822 having left it uncertain, how long • a person, found guilty of a fraud, might be kept in jail, or whether he could be discharged at all as an insolvent. The provision as now existing shews a just reprobation and denounces a •reasonable penalty on dishonest practices in debtors. They are not entirely deprived oí the privilege of being discharged, by taking the oath of insolvency; but they-are only admitted to that privilege, at the end of an imprisonment from one term of the court to the other, and then upon filing a true and unimpoached schedule. In the present case, therefore, the plaintiff had aright to impeach the schedule, for the two-fold purpose of praying his debtors, if found guilty of fraud and of not giving the exact account of their estates required by the act, into the custody of the sheriff — there to remain until the next court, as a just punishment for their covin; and also of having all the estate, which ought legally to be applied to the satisfaction of the plain tiff and the other creditors, vested in the sheriff for that purpose. Now, this can only be effected by having a new schedule and including therein, the property omitted in the first, or fraudulently conveyed or concealed. For the statute does not merely, upon the finding of the fraud, vest in the sheriff the property in respect to which the fraud has been found; but it vests in the sheriff “all the -lands contained in the schedule, and all the goods and chattels and debts and demands set forth and described in the -schedule.” Hence, only those interests, particularly scheduled, vest in the sheriff, or enure to the benefit of the creditors. And hence, also, the necessity of a new schedule alter fraud found, and a new issue on it. Then it remains to be considered, what interests or estates ought to be scheduled? Upon that point the court is of opinion, both from the reason of the thing, and from the particular provisions of the statute, that the schedule ought to disclose every interest, which would have been liable to the creditor on fi. fa., or ought . in,law or equity to be subject to the creditor’s demand. If, therefore, the debtor has made a deed of trust in fraud of some of his creditors, it is not sufficient that the schedule • should contain the resulting trust of the maker of the deed. If the deed is fraudulent, it is void as against the creditor, and he is not confined to the resulting trust, but may take the property, the corpus itself. Here, the debtors have scheduled only the resulting trust, which affirms the other trusts to be bona fide and good, and is an assignment of the surplus only after all the other purposes of the deed have been answerec^ And that was right, supposing the deeds of trust to be bona fide and valid conveyances. But they may not be, and the tenders an issue that they are not; and if they be not, then the schedule ought to set forth the property itself, as being in the debtor, notwithstanding the deed made by him. The property, it is true, is not in him, as between himself and his alienee; but it is in him for the purposes ofhis creditor, and therefore ought to be inserted in the schedule, that the sheriff, as his assignee by operation of law, may bring an action against the debtor’s alienee to try the validity of the deed. This will be the clearer, if we suppose that instead of a deed of trust, this were an absolute deed, and found by the jury, on an issue, to be fraudulent. In that case, the Statute says, the party shall make a new schedule, and be irriprisoned, until he shall make it. Why is it to be made ? Unquestionably, for the purpose of including in it, among other things, the property fraudulently conveyed, and omitted in the former schedule; so that, under the new assignment, the sheriff may'assert a right to that property for the benefit of the creditors. Under the schedule, as it is, the sheriff can only claim to be assignee of the resulting trust. Whereas, if the deed be fraudulent, the whole property, as conveyed by the deeds, ought to be taken away from the trustees, and vested in the sheriff. If this were not so, a voluntary and fraudulent conveyance would be affirmed as against creditors, merely upon the ground, that the fraudulent donor was bound by his-deed, and took the oath of insolvency, without including that property in his schedule; which, we think, can not be. It is analogous to the common case in England of an assignee in bankruptcy recovering property, which the debtor, in qpntemplation of bankruptcy, passed to a favoured creditor in fraud of the rights of the other creditors under the bankrupt law. The conveyance being in fraud of the law, which provides for an equal distribution of the bankrupt’s estate, it is held to be void; and, although the debtor could not recover the property conveyed by him, his assignees may. The same law must be here, and for the like reason. Therefore, assuming the deeds to be fraudulent, as his Honor did, the defendants could not be discharged, upon an assignment of their resulting trusts, hut should have been required to assign the estates conveyed in the deeds; and, to ascertain the true character of those conveyances, the plaintiff had a right to have an issue tried, as tendered by him;

It is true, perhaps, the jury might have found all that was necessary for the plaintiff upon the issue, as framed by the court. But it must be supposed, the court gave to the jury by way of instructions the same opinion, which was delivered on the pi ailitiff’s, motion fdrxa special issue on the deeds, and, therefore, that the same error pervaded the ■ trial throughout. Under this view of the case^ therefore, we deem it proper to reverse the decision,, and direct the verdict to be set aside and a venire de novo to try the issue before made up, with liberty to the plaintiff to have the other issue, before asked by him, also tried, and such others as the Superi- or Court may further allow.

Per Curiam, New trial awarded.  