22 W. Va. 434 | W. Va. | 1883
On the 6th day of October, 1881, Hugh Of. Foley, of the city of Parkersburg, executed to “John B. Speaker, of the city of Cincinnati and State of Ohio, trustee,” a trust-deed by which, after stating therein that he “is justly indebted to the firm of Speaker, Buddeke & Co, of the city of Cincinnati, in the sum of six thousand three hundred and forty-four dollars and thirty-six cents,” and “to the firm of Young, Kim-mell & Biggs, of Baltimore, in the sum of one thousand six hundred and twenty-seven dollars and twenty-seven cents,” for which he has, as of the date of said deed, executed to the former firm his four notes, of one thousand five hundred and eighty-six dollars and nine cents each, and to the latter his four notes of four hundred and six dollars and eighty-two cents each, due respectively in fifteen, forty-five, seventy-five and one hundred and five days after date, with interest, and negotiable and payable at the First National Bank of Par-kersburg, the said Foley sold, assigned and conveyed to the said John B. Specker, trustee, “all of the stock of goods and merchandise of and belonging to the said party of the first part, being and consisting of a stock or lot of dry goods and notions, hats and caps, boots and shoes, jewelry and cloaks, now contained in the store-room occupied by the pai*ty ot the first part in what is known as the ‘Opera House Block,’ on Market street, in the city of Parkersburg, and county of Wood and State of West Virginia, and also such goods and merchandise as may be added to said stock from time to time by the said party of the first part and brought into said store in course of the business or to take the place of such goods as may be hereafter sol'd; also all and singular the notes, books, accounts and bills receivable of and belonging to the party of the first part, a list or schedule of which is hereto attached and made part of this deed and marked ‘Hugh
This deed, which for convenience I shall call “deed No. 1,” and also the schedule therein referred to, was duly recorded in Wood county on the day of its date.
By another deed, which I shall call “deed No. 2,” of the same date and recorded in said county on the same day, the said Foley sold and conveyed the same stock of goods and merchandise to the said John B. Specker, trustee, in trust to secure the payment of certain unmatured notes, therein.described, due to the Parkersburg National Bank and to indemnify John O’Brien, Thomas Murphy and Thomas Hughes & Go. as his endorsers on said notes. By this deed “the party of the second part (the trustee) is hereby authorized to take possession at once of the property hereby conveyed, and to manage and control the same for the benefit and advantage of the parties secured and indemnified by the deed, subject to the rights of the creditors secured by a former deed of trust which the parties of the first part have this day executed to the said John B. Specker, trustee, to the end that the said
And by a third deed, “No. 3,” dated and recorded in said county, on October 7, 1881, the s,aid Foley conveyed to said John B. Specker, trustee, all the goods and merchandise, notes and accounts, conveyed by the said “deed No. 1,” in trust to secure the payment of certain other unmatured notes therein mentioned, due to the said Parkersburg National Bank on which said Foley is endorser.
And the said Foley, being indebted to H. B. Olaflin & Co. to an amount exceeding two thousand six hundred dollars lor goods purchased from them by him before the date of said “deed No. 1,” they, on November 5, 1881, brought this suit in the circuit court of Wood couirty against said Foley, John B. Specker, trustee, the eestuis que trust in said several deeds and others to set aside said “deed No.-l,” and to subject the property and choses in action therein mentioned to the payment of their debt. The plaintiffs charge in their bill that the debts due from, said Foley to the beneficiaries in said deed were, at the date of its execution, in fact, greatly less than the amounts therein secured to them; that the said deed was made with intent to delay, hinder and defraud the plaintiffs and other unsecured creditors of said Foley, and that the said John B. Specker, trustee, had notice óf, and participated in, said intent, and that the said deed is, therefore, fraudulent and void as to them. They pray for an injunction to restrain the grantor, trustee and beneficiaries in said deed from disposing of, transferring or interfering with the property therein mentioned, and for the appointment of a receiver to take charge of said property, &c., and for general relief.
The bill was sworn to and an injunction awarded as prayed for therein. The defendants, the grantor, trustee and eestuis que trust in said “deed No. 1,” appeared and filed their demurrer and several answers to the bill.
The said defendants in their respective answers aver that the debts mentioned and the amounts secured to them respectively, in said deed, were, at the time of its execution, bona fide and justly due as therein stated, and they, each severally,
The cause was heard on December 12, 1882, upon the bill, demurrer thereto, answers and replications thereto, depositions and other proofs, and the plaintiffs not insisting then upon the appointment of a receiver, inasmuch as the property and goods had been disposed of and turned into money by the trustee, the court entered a decree overruling the demurrer to the bill and adjudged that the said “deed No. 1” was valid and binding and that the plaintiffs are not entitled to have the same set aside. The plaintiffs’ injunction was then dissolved and the cause referred to a commissioner to settle the accounts of the trustee, &c. From and to this decree the plaintiffs obtained from this Court an appeal and supersedeas.
The record is quite voluminous, containing much documentary evidence and many depositions filed’ and adduced by the plaintiffs tending strongly to establish, independently of the stipulations in said “deed No. 1,” that the said deed was made by the grantor for the purpose and with the intent to delay, hinder and defraud his creditors, and that the trustee had notice of such intent. But this Court, being clearly of opinion that said deed is fraudulent and void as to creditors of the grantor on .its face, it is unnecessary to decide whether or not the facts and circumstances shown by the proofs in the cause, aside from the terms of the deed itself, conclusively establish such a fraudulent intent in the parties thereto as would make said deed void as to the plaintiffs and other creditors of said Foley. It may be remarked, however, that the trustee, was a non-resident of the State and a member of the firm of Specker, Buddeke & Co., the creditors holding nearly four-fifths of the debts secured therein; that the trustee was not only made such in the deed which secured the debt of his firm, but he was also made trustee in two other trust-deeds to secure resident creditors in whose debts he hadi no interest; that he, on behalf of his firm in
The deed here in question conveys the stock ot goods and notes and accounts of the grantor, a merchant, to secure the payment of notes to become due fifteen, forty-five, seventy-five and one hundred and five days after the date of the deed, with a provision for the indefinite renewal of said notes. The trustee is not authorized to take possession of or sell the goods until the grantor has' made default in the payment of one ór more of said notes, and not even then- unless requested by the holder or holders of such- note'or notes. It is further stipulated that the conveyance is to embrace “such goods and merchandise as may be added to said, 'stock from time to time by the ■ grantor and brought into the store in course of business, or to - take the place of such goods as may .be. hereafter sold.” The clear intent and meaning of these provisions are that the grantor was to remain in possession of the goods and continue to prosecute his business by -selling
But it may be supposed that inasmuch as said deed stipulates that the “trustee, by himself or by his agent or attorney, shall at once take possession of the said notes, accounts and bills receivable, hereby assigned and conveyed, and collect the same,” that the conveyance, though void as to the goods, is valid as to such notes, accounts and bills. Such is not the case. It has been settled by numerous decisions that, where by the terms of the deed it is rendered fraudulent on its face in any respect, the law will conclusively presume that all parties claiming under such deed had notice of and participated in such fraud; and the intention disclosed by its terms will be imputed to the whole instrument and all the ¡parties connected with it and the deed will be declared void in toto._ Garland v. Rives, 4 Rand. 310; Henderson v. Henton, 26 Gratt. 926; Perry v. Shen. Nat. Bank, 27 Id. 755; Sands v. Codwise, 4 Johns. 536; S. C. 4 Am. D. 305; Bean v. Smith, 2 Mason 252-96; Clements v. Moore, 6 Wall. 313.
On the same day that said deed was executed the grantor executed “deed No. 2,” conveying to the same trustee for the benefit of other creditors, the stock of goods and merchandise, but not the choses in action, conveyed by the first deed, and by the terms of the said second deed the trustee is “authorized to take possession at once'of the property hereby conveyed and manage and control the same for the benefit and advantage of the parties secured and indemnified by the deed.” Does the execution of this deed and the provision therein authorizing the trustee to take immediate possession of, and to manage and control the property, in anywise affect or validate said “deed No. 1,” which, as we have seen, taken alone, is void on its face? I think not. It appears that the grantor and the grantee as well as the subject conveyed are the same in both deeds. If, therefore, the two
The.observations just made in regard to the effect, or rather absence of effect, of the execution of “deed No. 2” on the status of said “deed No. 1,” apply with equal force and propriety to the aforesaid “deed No. 3.”
■But, inasmuch as said “deed No. 2,” was expressly made “subject to the rights of the creditors secured” by “deed No. 1,” they, by their contract, acquired simply the equity of redemption in the goods and merchandise conveyed. When they took their conveyance they took it subject to the payment of the two sums of six thousand three hundred and forty-four dollars and thirty-six cents and one thousand six hundred and twenty-seven dollars and twenty-seven cents mentioned in said “deed No. 1,” and, although said deed was fraudulent on its face and the creditors therein named are not entitled to the benefit of said sums, still, as it was valid between the parties' thereto and the trustee and creditors in said second deed expressly excepted said amounts from their security, they are by their contract precluded from taking any benefit therefrom under the trust-deed to them. The said first deed, being fraudulent on its face, the law conclusively presumes that they knew that fact when they took their deed, and that it was their intention to
And while said “deed No. 3” contains no such reservation, in terms, in favor of the creditors secured in the said “deed No- 1,” it does expressly refer to said deed and mention the creditors secured in it. The grantor and trustee in the two deeds are the same. Tile implication, therefore, is equivalent, it seems to me, to an express agreement that said “deed No. 3” should operate only as a conveyance of the equity of redemption in the goods and dioses in action therein mentioned. It must, therefore, receive the same interpretation that we have placed upon said “deed No. 2.” And being so interpreted, the plaintiffs in this cause and other creditors of said Foley, if any such there be, who, by their superior diligence have made their debts charges on, or acquired liens upon, the trust-property or its proceeds, to the extent of their debts, not, however, exceeding the said sums of six thousand three hundred and forty-four dollars and thirty-six cents and one thousand six hundred and twenty-seven dollars and twenty-seven cents, mentioned in “deed No. 1,” are entitled to a preference over the cestuis que trust in said deeds No. 2 and No. 3 against the said trust-property or its proceeds. Wallace v. Treakle, 27 Gratt. 479; Hughes v. Hamilton, 19 W. Va. 367, 393.
For the foregoing reasons the said decree of the circuit court of Wood county of December 12, 1882, is reversed with costs to the appellants against the appellees, Hugh G. Foley, Specker, Boddike & Co. and Young, Kimmell & Biggs; and this cause is remanded to said court for further proceedings to be had therein according to the principles announced in this opinion.
DECREE Reversed. Cause RbmaNded.