115 Va. 586 | Va. | 1913
delivered the opinion of the court.
The Liquid Carbonic Company, a corporation, in November, 1910, sold and delivered to L. B. Whitehead, a pharmacist doing business in the city of Buena Vista, a soda water fountain and fixtures for the price of $940.00, partly in cash and the residue in instalments of fixed amounts, to be paid at stated intervals; the title to the fountain being reserved to the vendor until the purchase money therefor was fully paid. The contract of sale was in writing signed by the parties, and a memorandum therefrom was produced February 24, 1911, in the office of the clerk of the corporation court of the city of Buena Vista and docketed in the “Retention of Title Book No. 1,” a book provided and used for the docketing of conditional sales of personal property, as authorized by section 2462 of the Code of 1904, amended by act of 1904 (Acts of 1904, p. 96).
On October 27, 1911, the Whitehead Drug Company had prepared by A. W. Robertson a deed of assignment to him as trustee, but for some reason this deed was never executed. Later, however, on November 18, 1911, another deed of assignment by said drug company of its assets was prepared by Robertson, to himself as trustee, which deed was duly executed, Whitehead and Morris uniting, delivered and recorded; whereupon Robertson, the trustee, took full and complete possession of the stock of drugs and fixtures conveyed to him, including the soda fountain. After considerable effort and continuing the business for several months, Robertson, trustee, sold out the entire business, including all the stock and fixtures and the soda fountain, at the gross price of $2,500, to one L. Blair, but did not receive this money from Blair. As we shall see later in this opinion, it very clearly appears that at the time of the sale by Robertson, trustee, to Blair the latter was fully informed of the claim and lien of the Liquid Carbonic Company on the soda fountain and agreed with the trustee to hold him harmless so far as this claim was concerned, and to “see that the claim was paid if the same was valid.”
Upon the hearing of the cause on the pleadings, the demurrers of certain of the defendants to the petition were overruled, and thereupon, neither party requiring a jury, the whole matter of law and fact was submitted to the court for its decision, and the court having heard the evidence of witnesses and arguments of counsel adjudged as follows: “(1) That the contract in the petition mentioned was not docketed or recorded as required by law, and that the defendants, H. H. Parker and J. T. L. Dickinson, are complete purchasers for value and without notice of the plaintiff’s claim or contract; (2) That under the
To said judgment the Liquid Carbonic Company applied for and obtained this writ of error.
It was practically agreed, and rightly, in the oral argument before this court, that the recent decision in the cases of National Cash Register Co. v. Burrow, 110 Na. 785, 67 S. E. 370, and National Cash Register Co. v. Norfolk Realty Co., 110 Va. 791, 67 S. E. 372, rules this case as to the question, whether or not the conditional sale contract was docketed or recorded as required by law, and that by reason of certain omissions from the contract as docketed or recorded the lower court did not err in ruling that the contract in question had not been duly docketed or recorded as required by law. The trial court, taking the view that it had no jurisdiction in these proceedings to do more than determine in whom the title to the property (the soda fountain and its fixtures) was, did not rule upon the question whether or not Robertson, trustee, when the said deed of assignment was executed and delivered to him had actual notice of plaintiff in error’s contract of conditional sale to Whitehead of the soda fountain, etc., retaining title and ownership to and in the same and communicated this notice to Blair when he sold and turned over to him (Blair) the entire business of the Whitehead Drug Company, including all the stock and fixtures and the soda fountain, etc., on May 7, 1912.
That a trustee in a deed of trust to secure creditors is a purchaser of value, is too well settled to require citation of authority. It is also true that if such trustee is, as in this case, charged with notice of a prior right to or lien upon the property conveyed to him, the burden of proof to show such notice, is on the party alleging it. The fact of notice, however, may b'e inferred from circumstances as well as shown by direct evidence, but the proof must be such as to affect the conscience of the purchaser, and so strong and clear as to fix upon him the imputation of bad faith. Arbuckle v. Gates & Brown, 95 Va. 802, 30 S. E. 496, and authorities cited.
Tested by this rule, we have to reach the conclusion that the proof unmistakably fixes upon Robertson, trustee, as well as upon Blair, the purchaser of the trust assets, actual notice of the rights and claim of plaintiff in error with respect to the soda fountain and its fixtures. L. B. Whitehead, who directed the making of the deed of assignment to Robertson, trustee, when questioned as a witness in this cause as to whether the trustee, to whom he was making the assignment, had notice of the rights and claims of plaintiff in error, says: “Yes, sir, at the time that I called on Mr. Robertson for legal advice, I gave him full information that the Liquid Carbonic Company reserved a right in that fountain to the extent that they had in it the amount of money that was left unpaid.” He further says: “The trustee knew they (Liquid Carbonic Company) had their lien on it, and the fact that he omitted it was to my mind indication that it was not necessary.” The witness
Whatever may have been Robertson’s recollection at the time of the trial as to what he recollected at the time of the transaction being inquired into, his whole course and dealing with the soda fountain while he had it in charge and up to the time that he sold it, eight months after the deed of assignment to him, showed that he did recollect the lien of plaintiff in error and that this knowledge was sufficient to affect his conscience. Accordingly, when Robertson came to consummate the sale to Blair, he required Blair to agree to save him harmless. Later Blair, it seems, did not recognize the binding force of his agreement to save Robertson harmless with respect to plaintiff in error’s claim, and Robertson wrote him several letters insisting upon Blair’s living up to his agreement, in which letters Robertson’s statements clearly show that he, all through this transaction from his first interview with Whitehead to the sale to Blair, necessarily knew of the rights and claim of plaintiff in error with respect to the soda fountain. The fact is h’e relied on Blair “to save him harmless” as he had agreed, while Blair was relying upon defeating plaintiff in error’s claim on the ground that it had not been duly docketed or recorded, overlooking the fact that if he had actual notice of this lien and the rights reserved to plaintiff in error thereby, the failure to properly docket and record the claim would not avail him.
“It is important to remember that actual notice and constructive notice, in any of its varieties, produce exactly the same effects upon the equitable rights and liabilities of the party charged thereby; the general rule under con
As before stated, Blair had actually bought up for Yokeley (who admitted in his testimony that he was liable for every dollar of it) the indebtedness of the Buena Yista Pharmacy and the Whitehead Drug Company, and Robertson, with full knowledge of the claim and rights of plaintiff in error, sold the entire trust assets under his' control to Blair, who had like knowledge; and Blair sold the property to Parker and Dickinson at a price over $200 more than that he was to pay the trustee for it, withholding from them the knowledge which he possessed as to the rights of plaintiff in error, so that they (Parker and Dickinson) became purchasers for value and without such notice. The proof conclusively shows that the parties, other than Parker and Dickinson, purchasing the soda fountain and dealing with respect to it, had full actual knowledge of the claim and rights of plaintiff in error, and that in these circumstances Blair was permitted to retain the 'entire sum of the purchase money ($2,500), not only with knowledge of the rights of plaintiff in error in and to the soda fountain, but with the deliberate purpose of subsequently trying to defeat its claim. Whitehead and Yokeley were primarily liable for this debt and Robertson, trustee, and Blair having dealt with the soda fountain in the manner stated made themselves personally liable for the amount of plaintiff in error’s claim with interest as asserted in the petition in these proceedings.
“A purchaser who has notice of the rights of another, and sells to a third person without giving notice thereof to him, so as to place the subject of controversy beyond the reach of the rightful owner becomes personally responsible for the demand.” Thompson v. Powell, 5 Leigh (83 Va.) 576; Hobson v. Whitlow, 80 Va. 784.
The remaining question here presented is, whether or not the lower court erred in its ruling that plaintiff in error was not entitled “in this proceeding to a personal judgment against the defendants, or any of them, for its alleged claim, or any part thereof.”
Before the amendment to section 2462 of the Code of 1904) supra, the section did no more than simply provide for the reservation of title to chattels sold conditionally, without mention of any proceedings to enforce the same, and up to that time the parties Avere left to their remedy, either at law or in equity, as the nature of the case required. The statute as amended in 1904 (Acts 1904. p. 96) under Avhich this proceeding Avas instituted, is a remedial statute and must be liberally construed to give effect
Sub-division two provides that all reservations, liens, conditions, and the collection of all money mentioned in any such written contract, whether recorded or not, may be enforced on petition, etc. “A copy thereof shall be served on each person whose rights will be affected by the proceedings, which may be had thereon at least ten days before the date named therein for asking for judgment, and the original shall be fll'ed with the justice or clerk of court at least ten days before such date.
“A defendant shall, when the case is in a circuit or corporation court, state the grounds of his defense or his counter claim or off-set in an answer to the petition, to which the plaintiff may reply, and no further pleading shall
“The property may be sold, or possession delivered, or such other disposition made of it as the court or justice may direct. When the judgment is for money or costs or for the specific property, execution therefor may issue as in other cases. Where property is to be sold or other disposition made of it, the judgment or order of the court or justice shall be executed by the sheriff or other officer of the court authorized to execute process or by a constable.”
There is no room for any other construction of the statute than that in a proceeding under it the court may and should render such judgment as the facts justify under the “rules of law and equity” applicable to the questions it is called upon to adjudicate. The chattel in this case had been, by the wrongful acts of the defendants, placed beyond the reach of its rightful owner to the extent that it had not been paid for, and, therefore, the only relief that could be given to the petitioner (plaintiff in error) in the proceeding was a personal judgment against the defendants, jointly and severally, whose wrongful dealings with the chattel in question had put it beyond the reach of the rightful owner thereof, or the mandate of the court, for the amount of purchase money due and owing on the chattel to the petitioner, with interest thereon from the 1st day of April, 1911, until paid, as alleged in its petition, and the costs of these proceedings.
It follows that the judgment of the trial court has to be reversed, and this court will enter the judgment which that court should have entered, viz.: that plaintiff in error recover of defendants in error, A. W. Robertson, as trustee and in his own right, L. Blair, L. B. Whitehead and S. H. Yokeley, jointly and severally, the sum of six hundred and thirty-three dollars (f683.00), with interest thereon from the 1st day of April, 1911, till paid, and the costs of this litigation.
Reversed.