35 W. Va. 15 | W. Va. | 1891
In 1890, W. G. Bensimer filed his bill in the Circuit Court of Greenbrier county against John P. Fell, to assert the lien of a judgment in favor of Bensimer against Fell, to convene the lienholders, and sell Fell’s lands for the payment of the liens. The suit was in behalf of Bensimer and all other holders of liens, and, a reference having been made to a commissioner in chancery, he reported various liens against Fell’s lands, and they were sold. One of the liens reported was based on a judgment of date 10th January, 1878, in favor of J. Whitehill against Fell, for eight hundred and forty three dollars, owned by Alex-
The appellants say that the amount decreed for the Mathews debt is too large. On the date of the conveyance from the judgment-debtor Fell to A. S. Skaggs there had been rendered and docketed the judgment on which this Mathews debt is based, and of the amount of that judgment, with-lawful interest as called for by it, Skaggs had notice ; and the mere agreement made between Fell and Mathews, by which Fell agreed that, in consideration of forbearan ce, there was due on the judgment on November 20,1886, two thous- and, two hundred aud forty six dollars and sixty live cents, a sum largely in excess of the amount called for by the judgment, whatever might be its effect as between Mathews and Fell, could not operate as against the purchaser, Skaggs, to increase the debt over the amount which the judgment as docketed would demand. Of the large excess over the call of the judgment the purchaser had no notice. It surely would not be a part of the judgment as to him. In Barbour v. Tompkins, 31 W. Va. 410 (7 S. E. Rep. 1) it is held that where a bond calls for payment of interest annually, and is secured by deed of trust, and interest notes are given for the interest after it accrued, which bear interest, as between the parties the trust will secure the interest on the new interest notes, but that such interest can not avail as against subsequent creditors and purchasers. The same principle applies here. This is so whether the excess beyond the legal call of the judgment is based on usury or other consideration. It is a question 'of want of notice to
But the appellee Mathews contends that as in the first decree (that of November 20, 1886) his debt was ascertained to be, by reason of such agreement, two thousaud two hundred and forty six dollars and sixty five cents, that fixes that amount conclusively as the measure of his demand, not only as against Fell, but as against the land conveyed to Skaggs. The administrators and heirs of Skaggs were not formal parties when that decree was pronounced, and the decree is on common-law principles, a nullity as to them. There was, however, an order of reference directing the convention of all the lienholders; and notice was published to lienholders under section 7, c. 139, Code, 1887 ; and a convention of lienholders was had; a report of liens was made by the commissioner; and the court acted upon the report, decreed the liens and fixed their amounts and priorities as to the lands still owned by the judgment-debtor Fell, then the only land involved in the suit, and directed their sale; and besides made a personal decree against Fell in favor of Mathews for an amount based on such agreement between them ; and, moreover, these administrators of Skaggs had a certain debt reported among the liens against Fell’s laud.
What, in these circumstances, is the effect of that decree fixing the Matthews debt at a certain amount ? Is it a finality and a bar against the administrators of Skaggs, preventing them from asserting that it was not the true amount of that debt except only for the purposes of the cause as it then stood — that is, as between the various creditors of Fell as regards the only land then in the cause, that is, Fell’s land —or does it go further in its operation, and act against both the administrators and heirs of Skaggs, and estop them from contesting the amount of the Mathews debt when sought to be enforced against land not belonging to Fell, but which he had conveyed away ? Before chapter 126, Acts, 1882, amending and re-enacting chapter 139 of the Code, it was common to direct the convention of lien-creditors of a debtor by publication in a suit to subject his land to a judgment, whether brought by one judgment-creditor only, or by one for himself and others; and any
No doubt the amounts of the debts of the various lienors against their common debtor, as fixed by a decree in ease of such a convention of creditors, would be final for all purposes, as between the debtor and such creditors, and conclusive as between the creditors, for the purpose of that cause, as to the land of the debtor sought to be sold; and it would, as between the creditors, not because of the statute, hut on general principles of law, being conclusive as between the debtor and his creditors, be conclusive as to the existence and amounts of the various debts decreed against the debtor by decree binding him, as a personal decree, in other litigation between such creditors, or touching other property than that decreed to sale in the cause in which such decree was made. I take it that the act of 1882, making section 7, c. 139, as it appears in the edition of 1887 of our Code, does not change the law as regards this point; that is, it does not give the decree any more force than it had before, as between parties proving debts either as between them and their debtor, or as between themselves. It does require that before a sale for a judgment there must be a reference and notice to lienholders, and it does prescribe the particular notice, and it does give the decree a force as to the creditors not presenting debts which it did not possess before the act of 1882, by barring them from afterwards asserting liens on the land, and thus more effectually protects purchasers under the decree ; but it does not otherwise impart any additional effect to the decree. But there is a reason why in this case the administrators of Skaggs are not precluded by that decree from showing that the amount of the Mathews debt as fixed by it is too large, and it is this : that the ground on which that debt reached the amount given by the decree is that it was for the forbearance of money, that is, usury, and that such defence is personal to the debtor, and can not he made by any other creditor, if the debtor be living,
Therefore, if the administrators and heirs of Skaggs had attempted to plead usury against this debt before the commissioner on the first reference or in court before the amended bill bringing in the Skaggsland, their plea would have been unavailing; and it is well settled that before a judgment, as such, can be an estoppel, the party must have had right to make defence. 1 Greenl. Ev. § 535 ; Bigelow, Estop. 98 ; Herman, Estop. § 135 ; Munford v. Overseers, 2 Rand. (Va.) 318. So I conclude that said decree does not, proprio vigore, shut out the representative of Skaggs from showing that the decree does not fix the proper amount legally due for the Mathews debt in defence of their land, simply because the administrators were quasi parties, or because of any peculiar force of the suit as a creditors’ suit, under chapter 139 of the Code; and I will add that it certainly can not be conclusive against Skaggs’s heirs— First, because they were in no sense parties; and, second, because, even if conclusive as to his administrators, that would not make it binding on the heirs, as there is no privity between them. McKay v. McKay’s Adm’rs, 33 W. Va. 724, (11 S. E. Rep. 213); Saddler v. Kennedy, 26 W. Va. 636. Here it is the land of the heirs which is to be affected by the decree.
But outside of the peculiar character of the suit as a creditors’ suit, and of the fact of the appearance of the administrators therein to prove a debt, there is the personal decree for the Mathews debt against his debtor, Fell. Treat it as recovered in any form of proceeding to which the administrators were in no sense parties, and the question has occurred to my mind whether, as the decree is conclusive on Fell, the Skaggs heirs, claiming land bound by the judgment under a purchase from the judfiment-debtor, must accept the amount of the debt as decreed as a finality. Can a person claiming land under a judgment-debtor who
Wait, Fraud, Conv. § 270, says that when the judgment is conclusive between the parties it is “competent evidence tending to prove the debt, even as to third parties, until something is shown to the contrary by way of impeachment. A third party may, as a general rule, show that the judgment was collusive, and not founded on actual indebtedness or liability. Were the rule otherwise, the greatest injustice would result, since a stranger to the record can not ordinarily move to vacate the judgment or prosecute a writ of error or appeal.”
Bump, Fraud. Conv. 576, states the rule to be as follows: “Judgment maybe impeached^ collaterally by proof that the court had no jurisdiction, or that it was obtained by fraud or collusion, or that it was entered illegally, but not beyond this; and where a judgment in a personal action is not liable to either of these objections, whether rendered by de-' fault or confession, or after contestation, it is conclusive evidence to establish both the relation of debtor and creditor between the parties, and the amount of the indebtedness, and can not be collaterally impeached in another suit where such relation and indebtedness are called in question.”
In Bigelow, Estop. 142, it is laid down that a judgment in favor of A. against B. cannot be disputed by C., except on the ground that a fraud against creditors, of whom he is one, or against himself in some other relation, e. g., as surety, has been, committed, nor can the amount of the judgment be contradicted. Third parties can not object
2 Black, Judgm. § 605, states the rule to he that a “judgment obtained without fraud or collusion is conclusive evidence in suits between creditors in relation to the property of the debtor; of the fact and the amount of the indebtedness of the latter.” Prima facie only, according to Bart. Ch’y Pr. 537.
In the opinion in Chamberlayne v. Temple, 2 Rand. (Va.) on page 395, it is said that a judgment against donor establishes a debt against donee, unless impeached on the ground of fraud or for any other just ground. The words “any other just ground,” are very indefinite in this instance.
In Garland v. Rives, 4 Rand. (Va.) 282, a caseto set aside a fraudulent conveyance, it is held that the judgment against the grantor is prima fade evidence against the debtor or mere strangers, unless they can impeach it on the ground of fraud, or by showing that a full defence was not made, and can produce new proof showing that the debt was not due.” This leaves the door quite widely open. See 2 Lomax, Big. 341.
My own conclusion, on an examination of the many cases bearing on the subject, is that a judgment for a debt is, as between the judgment-creditor and other creditors, conclusive to establish the relation of debtor and creditor and the justness and amount of the debt, and can not be attacked except for fraud or collusion; and also that such judgment is evidence to the same extent against those claiming property that may be affected by the judgment derived from the judgment-debtor, for the reason that parties claiming property under the judgment-debtor are his privies iu estate, since they claim under him the property affected by the judgment; and it is a cardinal rule applicable to judgments that they bind parties and privies, whether in blood, law, or estate. This rule is modified by our own statutes requiring docketing of judgments etc. But it is a rule that, to bind a man as a privy in estate, he must have acquired his interest after the judgment, not before. A grantee of land is not affected by a judgment against the grantor after the conveyance. 2 Black, Judgm.
The conveyance of the Sinking creek land by Eell to Skaggs was before Mathews’s decree. Thus far I-find no reason to charge the land conveyed by Eell to Skaggs with the amount of the Mathews debt, as fixed by the said decree. But Mathews brings forward another ground on which he would charge it with that amount. The facts pertinent to this point are as follows: This moiety of the Sinking creek land which Matthews seeks to subject to his debt was conveyed on 27th September, 1878, by Eell to Skaggs, for the consideration of five thousand dollars, the agreement between them touching the. purchase-money providing that of said five thousand dollars “the sum of three thousand dollars is to be paid in cash, but the other two thousand dollars only as follows, as there are now certain judgments binding said land, and said Eell can not make title thereto free from incumbrances, that is to say, in manner and form as follows :
After the said Eell shall have satisfied all of said judgments, viz., by said A. 8. Skaggs entering satisfaction of a certain debt, now amounting to one thousand nine hundred and fifty dollars, due from said Pell to said Skaggs, and secured by trust-deed upon what is known as the ‘Creigh Property,’ near the town of Frankford, and by paying to said Eell fifty dollars in money, with interest thereon from this date until paid. But it is expressly provided that no part of said two thousand dollars shall be paid as aforesaid, nor shall the same be considered as due, until the whole of the judgments on the land first above mentioned shall have been satisfied by said Eell as aforesaid.” Fell receipted for three thousand and fifty dollars of the purchase money under the agreement. Of that money two thousand seven hundred dollars was paid to Eell with the understanding that it should be paid on said judgments, and he did pay two thousand five hundred and seventy five dollars of it thereon. The remaining three hundred and fifty dollars never went to Fell’s hands, but by agreement Skaggs was to pay it and did pay it on said judgments. The facts agreed show that said Fell agreed to discharge
Now, Mathews contends that, under the terms of the sale by Fell to Skaggs of the Sinking creek land, Skaggs has in his hands one thousand nine hundred and fifty dollars,. bearing interest from September 27, 1878, retained by him to pay judgments against that land, and to indemnify him- against such judgments, which is ample to pay his debt according to the amount fixed by the decree, and that this is Fell’s money; and as his decree is conclusive on Fell as to the amount of the debt, and as he does not plead usury, it does not-lie in the mouth of Skaggs’s representatives to plead it, and thus cut down the debt to the amount called for by the original judgment; and that to do so would not be for the protection of Skaggs’s estate, but for Fell’s protection against usury, and he has asked no protection.
Now, if we assume as true that, as between Fell and Skaggs, the contract allowing Skaggs to pay judgments would not be confined to the amount binding the land at the date of their contract, but that Skaggs would be justifiable in paying the debt in question as its amount was enlarged by said subsequent decree, yet that does not reach
Then, has Skaggs (or, rather, have his representatives) a right to apply such balance to their debt? Fell, as part of the consideration for the three hundred and fifty-acre Creigh tract, had assumed to pay to Skaggs the debt due him from Creigh, aud thus became personally bound for it; aud afterwards he sold to Skaggs the Sinking creek land, leaving in Skaggs’s hands one thousand nine hundred and fifty dollars to go on this debt if not required, or so far as not required, to pay judgments on said Sinking creek land. Such is the plain meaning of the contract. Had Fell paid such judgments, clearly he' could not have demanded the one thousand nine hundred aud fifty dollars ; but Skaggs could have applied it on the Creigh debt. Skaggs had right against Fell to apply such balance on his debt due from Creigh, and to pay off the judgment of J. Whitehill assigned to Matthews at an amount fixed by its principal, eight hundred and forty three dollars, with interest at the rate of six’per cent, per annum from the 29th day of December, 1877, and the costs of such judgment, and his administrators, or the land purchased by him of Fell and descending to his heirs, could not be charged with more.
It is urged here that said Creigh deed of trust itself creates no lien because of the inefficacy of the deed of trust to create a lien, for the reason that the land was vested in' Withrow, trustee, for Mrs. Creigh, and Withrow is not a
Let us now inquire whether the instrument made by Creigh and wife for a deed of trust is effectual to create a lien. The first reason assigned against its having such effect is that the deed from Allen S. Livesay and wife to James Withrow, trustee, conveys the land to Withrow to be held for the sole and separate use of Elizabeth A. Creigh, “expressly roseiwing, however, to the said Elizabeth A. Creigh the right to sell and unite with her husband and her said trustee in conveying all or any part of said lands whenever she may elect to- do soand said deed of trust was made between Lewis S. Creigh and Elizabeth A. Creigh, his wife, of the first part, J. P. Fell óf the second, and A. S. Skaggs of the third part; and Withrow is not a party to the deed, though at the foot of the deed below the signatures is a sealed writing signed by Withrow, trustee, of the same date with the deed, agreeing that the trust might be executed, and, in the event that a sale of the lands named in it should have to be made, he 'would unite in the deed. Plainly the grantors Livesay intended the land for
It does seem to -me that a valid deed made by Mrs. C. and her husband would, without the trustee’s being a party to it, transfer a good equitable title, and operate as an imperative direction to the trustee to hold the estate to the use of the purchaser, and to convey it to such purchaser, according to principles stated in Averett v. Lipscombe, 76 Va. 404; and that a court of equity would compel the trustee to convey the legal estate to the purchaser. Hill, Trustees, 278. Here is an instrument signed by husband and wife purporting to convey land to secure a debt, and approved by the trustee. All he concurrence by trustee and husband contemplated by the deed from Livesay is thus evinced, only that the trustee is not made a formal party so as to pass the legal title. But the intent of all parties is shown, and that intent fully meets the real design of the deed from Livesay. If such an instrument have a legal certificate of the privy examination and acknowledgment of the married woman, and be recorded, why should it not be an equitable mortgage, under the doctrine of courts of equity that any writing used for the purpose of binding propei’ty as security for a debt, though informal and insufficient as a common-law instrument, but showing that the parties intended it’to operate as a mortgage or deed of trust, will be an equitable mortgage? Wayt v. Carwithen, 21 W. Va. 516; Fidelity, etc., Co. v. Shenandoah & R. Co., 33 W. Va. 761 (11 S. E. Rep. 58); Atkinson v. Miller, supra, p. 115 (11 S. E. Rep. 1007.) Any instrument made by a married woman must, to bind the corpus of her real estate, be acknowledged duly and be recorded, before it can be at all operative, because otherwise it is void, unless the conveyance conferring the separate estate confers a mere power of appointment on her, and dispenses with privy examination, which I think the said deed from Livesay does not do. "Withrow did not
But it is said that the certificate of the privy examination and acknowledgment of Mrs. Creigh is faulty because it certifies that she appeared before the justice without saying that she appeared in a particular county, and certifies that she declared that she had willingly “signed” the deed, whereas it should have said “willingly executed.” As to the first point, the- certificate has the caption, “State of West Virginia, Greenbrier county, to wit.” It will be presumed that the act occurred in that county, and that the officer did not do an illegal act by taking an acknowledgment out of his county. Carpenter v. Dexter, 8 Wall. 513; Rackleff v. Norton, 19 Me. 274; Bradley v. West, 60 Mo. 33; and see copious note touching acknowledgments of deed, Livingston v. Kettelle, 41 Amer. Dec. 168.
As to the second point, all the decisions say that a substantial compliance with the statute is sufficient. A deed, to be valid, must be signed, sealed and delivered to pass legal title ; but a contract signed and delivered, though not sealed, even by a married woman, is effective as an exe-cutory contract, when duly acknowledged. The word ‘■‘executed” would import all that is necessary to consummate a deed, but it does not in this question necessarily import delivery, for it often is acknowledged before delivery. This certificate says that the woman “came before me, and having been examined by me privily and apart from her said husband, and having had the deed aforesaid fully explained to her, she, the said Elizabeth A. Creigh, acknowledged the same to be her act and deed, and declared that she had willingly signed the same, and does'not wish to retract it.” Who can say that there is any question as to her intent to declare the instrument a completed act? The ’word “signed” is here tantamount to “executed.” In Pickens v. Knisely, 29 W. Va. 1 (11 S. E. Rep. 932,) a certificate that the woman declared that she had willingly “acknowledged” the instrument, instead of saying she had willingly “executed” it, was held good. The words “signed and sealed,” or “signed” only, have been held equivalent to
We hold, therefore, that said instrument created a valid lien on the land named in it for the debt named in it, so as to give Skaggs’s right to apply on that debt any part of the one .thousand nine hundred and fifty dollars in his hands after discharging judgment-liens on it. It, as also the bond secured by it, created a debt, and that would give Skaggs the right, as against Fell, to apply on it such balance.
But it is said that Skaggs’s estate is barred of the benefit ■of this debt by force of the report of Commissioner With-row, and the decree of November 20, 1886, confirming it, because there was an order to couvene all persons holding liens on the land of Fell, including the Creigh tract of three hundred and fifty acres, on which the deed of trust rested, and Skaggs’s administrators failed to prove it as a lien against that land, and especially as the commissioner in his report remarked, “it is presumed that the debt due from L. S. and Mrs. E. A..Creigh to A. S. Skaggs has been paidand there was no exception to the repoi’t, and as .said administrators did prove another debt due their decedent from Fell, the judgment-debtor against whose land the
Those cases were before the act of 1882 as to suits to en - force judgment-liens, and as the language of section 7, under that act, is liens “by judgment or otherwise,” and in the form of notice, “all claims held * * * which are liens on his real estate,” any lien in any manner arising is contemplated ; but, in cases where the legal title is outstanding in a trustee, it is still necessary to make the trustee, and, I should say, also the beneficiary, under the deed, formal parties.
Again, the statute bars those not presenting their claims only from participation in the proceeds of the sale of the land, not from the personal debt, unless that be expressly involved in the case, in the pleadings, or made so by con-testation before the commissioner.
Certainly, therefore, the personal obligation of Fell under
Where persons are made parties to' a suit under this statute, the effect of proceedings in it may be broadened by the allegations touching them in the pleadings, and would be dependent thereon; but, where they are not formal parties, I regard the proceeding as in the nature of an in rem. proceeding, operative in the particular cause as to the particular property disposed of by the decree. Any proceeding-trenching upon that important principle of law that, before a person can be bound by a judicial proceeding, he shall be made a party, and served with process, and informed by pleadings of the matters that may prejudice him, are dangerous, and we should not give this statute a scope by construction towards that result not demanded plainly by it. I conclude that the proceedings in this cause prior to the amended bill, making the personal and real represen
For these reasons I am of opinion that the one thousand nine hundred and fifty dollars in Skaggs’s hands is not to be regarded as Fell’s money, and as if Skaggs had no interest therein; hut that any balance of it, after paying judgments binding the Sinking creek land, Skaggs has right to apply on the Creigh debt due Skaggs under the terms of his purchase long before the decree for the Mathews debt; and that Mathews has right to hold the land conveyed by Fell to Skaggs liable, not for the amount as fixed by the decree, but for the amount of the judgment of J. "Whiteliill against J. P. Fell, eight hundred and forty three dollars, with interest from the 29th day of December, 1877, and three dollars costs, subject to be credited with the amount applicable thereon from the sale under decree in the case, two hundred and eighty six dollars and one cent, as of 5th September, 1888, without prejudice to the right, if any, of Skaggs’s administrator under said deed of trust from Creigh and wife to J. P. Fell, trustee, dated 28th of September, 1885, to secure the debt therein specified to A. S. Skaggs against the land therein described.
The appellants ask this Court to dismiss the amended bill, and refuse relief to Mathews, because, while he has the right to subject said Sinking creek land to his judgment, yet he became the purchaser of the tract of land on which said deed of trust redts, and that it is of more value than his judgment, and is bound for said trust. This can not be done in this ease. The debt of Mathews is only a charge on the Sinking creek laud, not a personal debt on Skaggs; while Skaggs’s debt under the deed of trust, if a charge on the three hundred and fifty acres, is no personal debt against Matthews. We do not consider that we have before us the question of the liability of the three hundred and fifty acres, and therefore do not pass on it,
The decree of June 26,1890, is reversed, and cause remanded to be further proceeded with according to principles herein indicated, and in other respects according to principles governing courts of equity.
RevbRSbi). Remanded.