41 W. Va. 339 | W. Va. | 1895
B. B. Stout brought a suit in equity in the Circuit Court of Barbour county against the Philippi Manufacturing & Mercantile Company, a corporation, and others, to recover a debt due Stout from the corporation, alleging that said corporation had become embarrassed to insolvency and that it had executed a deed of trust upon certain personal property to secure a debt to the Farmers’ Bank of Philippi, and later a deed of trust upon all its real estate and machinery attached thereto, to secure various debts, in certain order, preferring a large indebtedness to said bank over Stout’s debt; that both said deeds of trust, for certain reasons stated, were fraudulent and void as to creditors other than the bank; and that the bank and the trustees were participants in the fraudulent transactions culminating in and including said deeds of trust.
The bill prayed that said deeds of trust be annulled, and the properties of the corporation subjected to the payment of Stout’s debt,
The trustees in the deeds of trust and the bank were parties to these suits, and Stout recorded a notice of Us fen-dens of his suit, but the Douglasses were not made parties. Later, they filed a petition to be subrogated to a lien, and later still, a petition for rehearing, but otherwise were not parties.
Pending the suits the trustees under the deed of trust conveying the real estale sold it to S. C. Douglass and T. B. Douglass, who took possession, and held under their purchase from the trustees until it was sold later by the commissioners under the decree above mentioned. Under that decree the commissioners sold the property to S. C. Douglass, but he did not complete this sale by complying with the terms of sale prescribed by the decree, by giving notes with security; and a few days later, by consent of the parties by their attorneys, the property was resold, without re-advertisement or order of resale, and purchased by S. C. Douglass at a price less by one thousand, two hundred and fifty dollars than his former bid, and this sale was reported to the court and confirmed, reserving to the creditors any right to hold Douglass for the said difference. Both sales were reported b3? separate reports—filed, it seems, at the same time—and both heard together. Later, the Farmers’ Bank of Phillippi moved for a rule against Douglass to show cause why he should not be compelled to pay the said difference between his first and second bids for said property. Later, a decree was entered which required Douglass to pay the said difference, with interest; and it required S. C. Douglass and T. B. Douglass to pay one thousand and five hundred dollars, with interest, for rents and profits of
From this last decree, dated 24th February, 1894, S. C. Douglass has appealed. I have stated only so much of the large record as 1 deem necessary to reflect the adjudication of law made in the case.
The appellant assigns errors in the first decree. Neither he nor T. B. Douglass was a formal party at its date. S. C. Douglass became quasi a party at later date, as purchaser under the decree, and the two filed two petitions, one of them asking re-hearing; and S. C. Douglass became a party to the rule to compel him to pay the difference between his two bids. As such purchaser, he could not appeal from former decree. Per Miller, Judge, Blossom v. Railroad Co., 1 Wall. 655. As a pendente lite purchaser he could not appeal. Those under whom such a purchaser holds represent him. Benn. Lis. Pend. § 325. But, waiving the question whether otherwise he was such a party as can assign error in that decree, there is the bar of time, precluding review of any error in that decree—almost seven years; two years being the limitation. Code, c. 135, s. 3. But counsel says that an appeal from a final decree brings up for review all preceding decrees out of which any error complained of in such final decree has arisen. This statement is too broad. An appeal taken in time from a decree will bring up for review every former order or decree not itself appealable, no matter when entered, and every appealable order or decree entered not more than two years before the appeal; but it will not bring up lor review any appealable order or decree entered more than two years before the appeal. Nor can any error in the decree or order appealed from in time be reviewed, if that error be solely based on an appealable order or decree entered more than two years before the appeal. The error in the former decree can not be corrected, because an appeal from that decree itself is barred; and the error in the later decree, though the appeal be within two years from its date, can not be corrected, because that would be a reversal of the former decree, and thus nullify the statute defending its error. And, furthermore, no errone-
We will now look into the decree of 24th February, 1894. The questions of liability for rent, and difference between S. C. Douglass’ first and last bids, were not passed on in the former decree, nor did that decree settle principles touching them, or from which the liability imposed by the latter decree legally and logically resulted; and therefore any error in the latter decree imposing liability therefor does not come from the former decree, and we can review the later decree.
Are T. B. and 8. C. Douglass liable for rent while they occupied under the sale under the deed of trust ?
Stout recorded a notice of lis pendens before the sale by the trustees, and they and the beneficiaries under the trust were parties to his suit; and, though the Douglasses were not formal parties, they are as fully bound by the decree as if parties, because 'pendente lite purchasers from the trustees. Lynch v. Andrews, 25 W. Va. 751. Just as the decree binds the trustees, so it affects the Douglasses. They stand in the shoes of the trustees, and their title perishes with the destruction of their grantor’s title. Then would this principle bind them for rents? If the mill company, the debtor, had continued in possession, it could not be charged with
It will be asked, how can the Douglasses be held for rents, if the mill company could not be? If they were purchasers without imputation of fraud, they could not b ; held for rents, though purchasing pending the suit. 13 Am. & Eng. Enc. Law, 893; Jacobs v. Smith, 89 Mo. 673 (2 S. W. 13). If claiming free from fraud as alienees of the debtor, they would hold, as he, without liability for rent. A pendente lite purchaser has no privity or contract with the creditors. But entirely different is it with one purchasing who is chargeable with fraud, because lie is chargeable with fraud. Him equity regards with no favor, reimbursing no expenditures for purchase money or improvements, and charging him with rents of property wrongfully acquired in an effort to hinder, delay, and defraud creditors, llis act hindering and delaying them in the pursuit of their debtor’s property burdens him with its mesne profits. He is holding property belonging to them, and is made a trustee for them by equity, and can get no benefit from his wrong. Bump, Fraud. Conv. 610, 612; Wait, Fraud. Oonv. §§ 26, 27.
Next, can fraud be imputed to the Douglasses? Likely not, as an actual, menial fraud in them; but in law they are chargeable with fraud, because being pendente life purchasers, they are chargeable with everything alleged in the bill. If the facts in the record tell a pendente Lite purchaser that his vendor committed fraud, he becomes a party to the fraud. Davis v. Christian, 15 Gratt. 12, point 9. He has notice of facts disclosed by the record. Benn. Lis Pend.. § 92; Arnold v. Casner, 22 W. Va. 444, point 7. Turning then to Stout’s bill, we find it alleging that the deed of trust
Another reason against holding the Douglasses for rent is that there is no pleading on which to base it. How do we know by the pdeadings that they purchased, or were in possession? No pleading mentions it, except a petition filed by them to rehear. The commissioner’s report simply mentions it, but that is no pleading. I do not think this petition would make the rent matter a proper subject for relief in connection with the report.
Another question is, can S. C. Douglass be held for the difference between the sum for which the property was knocked off to him at the first sale under the decree, and that at which he purchased at the second sale under the decree? If so, in w hat mode of proceeding?
Undoubtedly, when one becomes a purchaser at a judicial sale by having the property knocked off to him, he incurs a liability tor the price he agreed to pay, though he does not comply with the terms of sale under the decree, as by giving notes with security, or other terms, provided proper steps be taken to enforce this liability. When the purchaser fails to comply with terms, I think the commissioner may ignore his bid, if he thinks it worthless, or for other reason does not care to.insist on it, and go on and make another sale at once. But if he does this instead of reporting to the court, it seems lie does so at his peril, where there is clanger of loss to the parties. Dills v. Jasper, 33 Ill. 262. If he does this, we think the purchaser is not liable for his bid. But under such circumstances the sale may be reported to the court, and then several courses are open: (1) The court may set aside the sale, release the purchaser, and order a resale. This would be proper where fire or other destruction of the property rendered it proper to release the purchaser. (2) It may confirm the sale, and compel the purchaser to comply with terms of sale by [laying money into court, in whole or part, as required by the
Our own cases afford a warrant to say that a bid is but an offer, not a contract, without a recognition in some form by the court. Kable v. Mitchell, 9 W. Va. 493, in point 6, tells us that “the bid is to be considered as the purchaser’s offer to the court, through the commissioners, and in making it he agrees to be bound thereby if it is accepted and approved by the court; and it is discretionary with the court whether it will accept the bid and confirm the sale, or set it aside.” Repeated in Marling v. Robrecht, 13 W. Va. 440.
In this case, before any report of the first sale to the court, the parties, by counsel, agreed that a resale take place without readvertisement; and ten days after the first sale it was again sold to Douglass, but at a lessprice, and
The answer to the rule to compel Douglass to pay his first bid does not set up this defense of a freshet, but makes other defense; and there is no proof of it, unless we construe the report of the commissioners, in stating that as Douglass’ reason for not completing his sale, as impliedly admitting it. But we think he is not liable, on grounds stated above.
Here, too, as in defense of the effort to charge the two Douglasses with rent, it is argued that the money for the deficiency on second sale, if charged to S. C. Douglass, would go to the bank, and that it can not ask it, because guilty of fraud, and not entitled to call on equity for help; but this position is untenable, because this matter arises out of the sale under the decree, and the bank debts were
What is the proper mode of holding a bidder liable when he has failed to complete his purchase, necessitating a resale, which has brought a less price? This question has been anticipated in what is said above, as it is there answered. It may be by rule in the same case, proceeded in as above indicated. ,
It seems clear to me that those clauses or provisions of the decree of 24th February, 1894, holding S. C. Douglass and T. B Douglass liable for rent, and holdings. C. Douglass liable for difference in the sum lor which the property was sold and confirmed to him, and his first bid therefor, are erroneous; and, in so far as the said decree so adjudicates, it is reversed.