Vance Shoe Company and others filed in the Circuit Court of Wetzel county a bill in equity against William Ilaught and others, alleging his indebtedness to it and various others creditors, and that he had confessed fraudulent judgments in favor of David Ilaught and one Rice, under which, by execution, a stock of goods had been sold, and purchased by David Ilaught, and that William Ilaught owned a house and lot conveyed to him by Brookover; and the bill prayed that the judgments and execution sale under them be held fraudulent, that Rice and Ilaught beheld for the price the goods brought, and that either the goods or their proceeds be subject to pay plaintiffs’ debts.
An amended bill revealed the fact that David Ilaught had sold said goods to Boy, who had executed to David
Later, Sarah E. Eddy filed in the case her petition, setting up that David Ilaught had assigned her two of the notes on Loy and Brookover, asking to he made a party, and for dissolution of the injunction restraining Loy and Brookover from paying said notes, and that she be allowed to withdraw the notes filed with petition, and collect them.
A decree in the case held the confessed judgments, and the sale of the goods under them, fraudulent, as also the sale of the goods from David Ilaught to Loy, and that William and David Ilaught, Bice, Loy, and Brookover were participants in the fraudulent transaction to defraud “the creditors of William Haught, and are all therefore liable for complainants’ claims set up in the bill,” and went on to decree those debts against them, as a personal decree. The decree also declared that no necessity existed for the petition of Eddy, and dismissed it, and gave her leave to withdraw the notes of Loy and Brookover, and to proceed at law to collect them, and dissolved the injunction against their payment. Brookover alone appeals from this decree.
Now, on the basis of fraud in Brookover in the confession of judgments, the sale under them, or the sale of David Ilaught to Loy, there is no warrant for that clause of the decree branding Brookover with fraud, or in that adjudging him, for such fraud, liable by personal decree for the plaintiffs’ demands, as if lie were an original debtor for them, and for these reasons:
Nowhere do the bills charge fraud on Brookover. There can not be a decree against a man without allegation against him to render him liable. Point 3, Roberts v. Coleman, 37 W. Va. 143 (16 S. E. 482) and citations, page 152, 37 W. Va. and page 484, 16 S. E.; Bierne v. Ray, 37 W. Va. 571 16 S. E. 804). And more particularly is it necessary, if the
As to the personal decree against Brookover, as bound for the debts: If chargeable with fraud, I do not think this is proper. He being surety, it would be proper to subject the goods first, if practicable. Treat Loy even as purchasing to defraud, or with notice of the fraud of others, unless he had sold the store—and he had not—no personal decree could go against, him; and a fortiori not against Brookover, unless he too were participant in fraud. See opinion in Ringold v. Suiter, 35 W. Va. 189 (13 S. E. 40).The decree violates this principle. If the property has been sold to a bona fide purchaser, there may be a decree against the fraudulent vendee, I presume—not for the whole of the creditor’s debt, but for the amount realized by the fraudulent vendee; and, if that be less than the value of the property, then for that value. Decree in Wright v. Hencock, 3 Munf. 521; Hinton v. Ellis, 27 W. Va. 422; Lockhart v. Beckley, 10 W. Va. 87, point 10 of syl.; Ringold v. Suiter, 35 W. Va. 186, 190 (13 S. E. 46) and citations. But, as the debts decreed to plaintiffs are less in amount than the notes of Loy and his surety, I would see no error in this feature basing the decree on the notes as below treated, except for the fact that after allowing the Eddy notes to
There is no ground on the pleadings to charge Brookover or Loy on account of any fraudulent action of their own. Nor do I find proof of it in the evidence. But, though Brookover is not liable for fraud, be and Loy are liable for the purchase money for the stock of goods. The bill charges fraud on David llaught in the confession of judgment by his father, and in the sale to David by the execution under them, and also in the sale of the goods by him to Loy, and this allegation was taken for confessed. Thus, he was convicted of fraud in the sale to Loy, and as Loy and Brookover owe the notes given for the proceeds of the goods, the creditors can follow up the fund into their hands. Though the sale be bona fide so far as Loy is concerned, so that the creditors could not take the goods, yet they can render the debt due for them from Loy liable, as under the decisions cited above, you can take from the party what he has received, you can take what is yet coming to him from his sale of the property. If llaught still owned the goods, they could be taken. Their purchase price . due from Loy represents them. Loy holds the money as Haught’s. Heath v. Page, 68 Pa. St. 108; Lockhart v. Beckley, 10 W. Va. 87, point 10 of syl.; Bump. Fraud. Conv. 609. So clear is the right of the creditors defrauded to the purchase money unpaid, that it seems to be the law that on receiving notice of fraud, he must pmy no more. If he is a bona fide purchaser, he is protected both as to payment and his title to the property, because his right at the date of sale was good, but, with notice of the fraud, can not go on with the payment. 2 Bigelow, Frauds, 474, 496; Machine Co. v. Zeigler, 58 Ala. opinion 224. Some authorities hold that a bona fide purchaser can not hold the property unless he has paid in full. Bump, Fraud. Conv. 493. Therefore, though the wrong reason is given for holding them liable they are liable under the notes; and the giving a wrong reason for the
The decree dismisses the Eddy petition, and allows her to collect the two notes she held. It is true, it may have been thought that the debt due from Loy and Eddy is large enough to pay both creditors, over and above the Eddy notes, and that this would render her an unnecessary party; but the decree allows her lo collect her notes, which are the first ones to mature, and gives a decree against Loy and Brookover, payable at once, with costs, which would make them pay before the maturity of the notes. This is error.
As Loy and Brookover are not chargeable on the theory of their fraud, but as debtors to David Caught, the terms of their contract with him must bo regarded, and they can not be made to pay before the notes mature; and, when the decree was made, none except those owned by Eddy were due, and are not yet. And setting aside the two notes held by her, leaving only two accessible to creditors, the debts decreed against Brookover and Loy exceed the amount in their hands, as only four notes in all were executed, perhaps only three bj7 Brookover. This is error.
The Eddy petition should not have been dismissed, but, all parties being before the court, she should have had decree for her notes, if her right was superior to that of creditors, and the other notes applied, when due, as far as they would go, on the debts of creditors, according to their rights.
There was no reason to charge costs to Loy and Brook-over, they not being chargeable as for fraud. They had no overdue money in their hands, accessible to creditors, as the matured notes were Eddy’s; and the other notes were not due, even if they would be chargeable with costs if duo.
A question raised in the case is whether there could be any decree, in any view, against Loy and Brookover. The amended bill simply asked that they be restrained from
In the original bill is a prayer that the proceeds of the goods be subjected, but that is as to the proceeds of the sale under the execution, not that from David llaught to Boy. But the amended bill sets up the sale to Boy, the debt due from him and Brookover, and, the charge of fraud against David llaught being confessed, the law fol
For reasons above given, the decree must bo reversed; but as to all, or only some ? The decree is that five defendants pay the debts—a joint decree—and, under the rule as generally stated, being erroneous as to some, according to joint judgments at common-law, should be wholly reversed. Arrington v. Cheatham, 2 Bob. (Va.) 492; Jones v. Raine, 4 Rand. 386; Vandiver v. Roberts, 4 W. Va. 490; Lyman v. Thompson, 11 W. Va. 427; Lenows v. Lenow, 8 Gratt. 349; Purcell v. Mc Cleary, 10 Gratt. 246; Gravy v. Stewart, 33 Gratt. 358. As a party may waive error in a decree, if he wish, the above rule seems unreasonable—certainly oftentimes, where only part appeal. Section 26, chapter 135, Code, authorizes this Court to reverse in whole or in part, and, I think changes the common-law rule, as is intimated in the opinion in Gray v. Stewart, supra. Here the rights of Loy and Brookover stand on the same ground as debtors, and they do not stand on the same ground with the others. Their causes are not the same. Where parties stand on distinct and unconnected grounds, and are not equally affected by the same decree or judgment, appeal by one will not bring up for adjudication the rights of others; but where those appealing, and those not, stand on .the same ground, and their rights are involved in the same question, the whole case will be considered, and settle the rights of parties not appealing, as I understand, if they are involved in the same question. Walker v. Page, 21 Gratt. 636. So I think as to reversal.
We therefore reverse as to Loy and Brookover, and remand the case.