15 S.E.2d 166 | W. Va. | 1941
This cause comes to us upon certificate from the Circuit Court of Randolph County, and the question involved is the correctness of the ruling of that court in sustaining a demurrer to the plaintiff's bill.
At September Rules, 1940, plaintiff filed her bill against Herbert Evans, Sheriff, and as such, administrator of the estate of Albert Warner, deceased, J. M. Coberly and A. N. Marstiller, trustee, seeking to have cancelled a note of $600.00 executed by her, payable to Albert Warner, and now held by the defendant Coberly as collateral for a loan of $400.00 made by him to Warner in his lifetime, and to set aside, as a cloud upon the title of the plaintiff, a *396 deed of trust executed by her to secure said note, by which she conveyed to A. N. Marstiller, trustee, Lot No. 83, Block M in the Yokum and Hinkle Addition to the City of Elkins. A demurrer to the bill was interposed by the defendants Coberly and Marstiller, trustee, on the ground that the note and deed of trust sought to be cancelled are shown by the allegations of the bill to have been executed by the plaintiff with intent to defraud her creditors, and that by reason thereof, a court of equity should not grant the relief prayed for.
In her bill, the plaintiff alleges that she had been married to one Lantz, and had, on account of endorsements for him, become financially involved; that later she obtained a divorce and resumed her maiden name, after which she purchased the property in the City of Elkins conveyed by the deed of trust mentioned above; that in the meantime, she had become acquainted with Albert Warner, now deceased, who knew that her former husband had caused her to become financially involved; that she was led by Warner to believe that she should encumber her Elkins property by pretending to secure a debt which she did not owe, and thus protect her property from the claims of the creditors of her former husband; that, following this advice, she, on the 23rd day of October, 1936, executed the deed of trust which she now seeks to set aside, and executed the note for $600.00 described therein; that after said note and deed of trust had been executed, and the deed of trust recorded, they were retained by her and placed among her private papers in her home; that later, she was advised by counsel that since she was not in fact indebted to said Warner, she should obtain a release of the deed of trust, which she endeavored to do without success; that some time in the latter part of the year 1938, upon making a search in her home for the deed of trust and note, she located the deed but was unable to find the note, and upon investigation learned that said note had been deposited by Warner with defendant, J. M. Coberly, as collateral security for a loan made by Coberly to Warner, and that Coberly had in his possession a letter, purporting to have been signed by her, to the *397 effect that the note of $600.00 was due and owing from her to Warner, subject to a credit of $75.00; that the letter held by Coberly was never presented to her for her signature, and that she did not sign or authorize anyone to sign the same; that the note of $600.00 was evidently purloined from her home by Warner; that all of the indebtedness of her former husband, for which she was liable, had been paid by her.
The bill also avers that the note of $600.00 which she executed to Warner became due on October 23, 1937, and was not transferred to the defendant Coberly until on or about March 2, 1938; that said note not having been lawfully in the possession of Warner, he had no title thereto; and no title passed to Coberly; and that she is entitled to assert against any claim which may be made upon said note every defense which she would have been entitled to make against Warner had he retained possession thereof.
Three propositions are outstanding: (1) that, at the time of the execution of the note and deed of trust which plaintiff now seeks to cancel and set aside, she was indebted in an amount calculated to cause her embarrassment; (2) that the note and deed of trust, aforesaid, were executed, and the deed of trust recorded in the proper clerk's office, with the intent and purpose on the part of the plaintiff to evade the payment of said indebtedness; and (3) that by her bill she seeks affirmative action on the part of the court to relieve her from the effects of her fraudulent conduct.
We think it clear, under a long line of decisions by this Court that a court of equity will not grant relief in such circumstances. In McClintic v. Loisseau,
*398"Where a contract has been made to accomplish a fraudulent purpose, a court of equity will not at the suit of a party to the fraud, — a particeps doli, — if the contract is executory, either compel its execution or decree its cancellation, nor, after it has been executed, set it aside and thus restore to the plaintiff the property or other interest, which he has fraudulently transferred. It will leave the parties in the position, in which they have placed themselves.
See, also Corrothers v. Harris,
It must be remembered that, according to the allegations of the plaintiff's bill, she was actually indebted at the time of the execution of the note and deed of trust in question, for she says she has since paid this indebtedness; and, therefore, the principle announced in Criss v. Criss,
Another principle of equity, equally well established, is that even between persons equally innocent of wrongdoing, he whose neglect, default or conduct was the occasion of loss must bear its consequences, rather than the other party, who is guiltless of fraud, neglect or wrongdoing. N. W. Ry. Co. v.Perdue,
The ruling of the Circuit Court of Randolph County is affirmed.
Affirmed. *400
