107 Va. 315 | Va. | 1907
delivered the opinion of the court.
It appears that Paris Charles was, on June 3, 1901, and prior thereto, engaged in the retail mercantile business, buying his
At the second August rules, 1904, appellant filed its original bill in this cause (which is the only bill copied in this record), setting out the foregoing facts, and relying upon them as showing that the deed from Gibson to his wife, as well as the pretended resale of the stock of goods by Gibson to Charles, were fraudulent transactions, made and had for the purpose of defrauding the creditors of Charles, especially appellant, and charging that Gibson was liable to appellant not only for the $235.77 realized by him from the sale of a part of the goods while in his possession, but for the two notes of $300 each, above mentioned, and that appellant was entitled to a lien therefor upon the tract of land which Gibson had fraudulently conveyed to his wife.
Upon the hearing of the cause upon the bill, the answer of Gibson, and depositions of witnesses, the circuit court held that appellant was not entitled to recover of Gibson the amount of the two notes of $300 each, executed by Gibson to Charles, and by the latter assigned to appellant and sued on, but that Gibson was liable to the creditors of Charles for the difference between the amount of the goods turned over to him by Charles and the amount of the goods returned to Charles by Gibson, namely, the difference between $1,700.44 and $1,464.67, and interest thereon; and that the same should be paid to appellant, the first and only creditor attacking that transaction; and it was adjudged, ordered and decreed that appellant recover of Gibson the sum of $235.77, with interest thereon, from the 30th day of July, 1904, until paid, and costs of its suit; and that, as to this recovery the deed executed on the 15th day of July, 1904, by Gibson to his wife, Cordelia Gibson, conveying certain lands therein described, was not made for a consideration deemed valuable in law, but was made with intent to hinder, delay and defraud appellant, as a creditor of B. G. Gibson, and,
Erom this decree the appeal under consideration is taken, and we are asked to reverse it only in so far as it holds that the two notes executed by Gibson to Charles for $300 each, and assigned by the latter to appellant, are void and uncollectible because of failure of the consideration for which they were executed, the effect of the decree being that the sale of the stock of goods, from Charles to Gibson having been made without a compliance with the provisions of the statute, supra, the transaction was void, and, therefore, the consideration for which the notes in question were executed, failed.
Besides the fact already mentioned, that after the assignment of these notes to appellant, Gibson not only recognized them as valid obligations, which he was bound in law to meet, but expressly promised appellant that he would pay the notes, the statute does not declare that the sale of the goods was fraudulent and void as to Gibson, the buyer, but only that the sale was prima facie presumed to be fraudulent and void as to the creditors of the seller, and further, that the merchandise in the hands of the purchaser, or any part thereof, if it be found in his hands, should be liable to such creditors, and in the event that the same or any part thereof be withdrawn by the purchaser, then the purchaser himself, personally, shall also be liable to said creditors of such seller, to the extent of the merchandise so received by him and thus withdrawn.
The contention of appellant is that, after notice to appellee, Gibson, of the assignment of the notes to appellant, Gibson and Charles could by no subsequent transaction invalidate the notes in the hands of the assignee; and this contention is clearly sound. The notes in the hands of appellant were only subject to any equities between Charles and Gibson prior to notice of the assignment, and it is not pi’etended by Gibson or anyone else
According to the answer of Gibson, there was no fraud or dishonesty in his purchase of the stock of goods in question from Charles, and hence it was an innocent and valid purchase; therefore, the prima facie fraud was eliminated, and Gibson was the owner of the goods free from any consequences and results imposed by the statute, supra, under no obligations to the-creditors of Charles, and was clothed with the right to hold the goods by payment, either directly to Charles or to his assignee, of the invoice price thereof evidenced by the notes he had given, so that the notes were for a legal and valid consideration, and Gibson could not, by his own act, relieve himself of the express-promise to pay them to appellant.
In Stebbins v. Bruce, 80 Va. 389, while it.is held to be settled law in this State that the assignee of non-negotiable paper stands in the shoes of his assignor and takes subject to all defenses of the debtor against the assignor existing before notice
This qualification of the rule of law in that case applies with full force to the case at bar, for it plainly appears from the facts already stated that the effort on the part of appellee, Gibson, to retract his promise to appellant to pay the two notes in question, operated as a fraud upon the appellant. Belying upon the promises and assurances given by' Gibson that the notes were all right, and that he would pay them, appellant took no action to enforce its indebtedness against Charles, and, without any notice whatever to appellant, Gibson permitted the stock of goods to be withdrawn by Charles, so that the latter could and did put them beyond the reach of appellant by con
Ignorance of the law could not avail Gibson, and to permit him, under the facts and circumstances appearing in the record, to retract his assurances to appellant with reference to the two notes in question, or to repudiate his express promise to pay them, would operate, in our opinion, as a fraud upon the rights of appellant, and be not only contrary to the established law, but to the “plainest principles of natural justice.” Stebbins v. Bruce, supra; 2 Min. Inst. 326; 1 Greenleaf on Ev. (15 ed.) sec. 207; 2 Pom. Eq. (3rd ed.) sec. 812.
Eor these reasons, we are of opinion that the decree of the circuit court, in so far as it holds that the appellant is not entitled to recover of the appellee, B. G. Gibson, the two notes of $300 each, executed by Gibson to Paris Charles, and by the latter assigned to appellant, is erroneous; and we are further of opinion that appellant is entitled to a lien on the tract of land conveyed by Gibson to his wife by deed of July 15, 1904, for the amount of said notes, with interest thereon from their maturity, as well as the lien for the sum of $235.77, with interest thereon from the 30th day of July, 1904, until paid, with the costs of this suit, as decreed by the circuit court; therefore, the said decree, to the extent that it denies appellant the right to recover of Gibson the amount of said notes and a lien upon said land as security for their payment, will be reversed and annulled, and the cause remanded to the circuit court to be further proceeded with in accordance with this opinion.
Reversed in pari.