127 U.S. 518 (1888), Stuart v. Gay

Citation:127 U.S. 518, 8 S.Ct. 1279, 32 L.Ed. 191
Party Name:STUART v. GAY et al.
Case Date:May 14, 1888
Court:United States Supreme Court
 
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Page 518

127 U.S. 518 (1888)

8 S.Ct. 1279, 32 L.Ed. 191

STUART

v.

GAY et al.

United States Supreme Court.

May 14, 1888

Appeal from the District Court of the United States for the District of West Virginia.

[8 S.Ct. 1279] The decrees which are the subject of the present appeal were rendered in a suit brought to enforce certain deeds of trust and mortgage liens upon a tract of land in Greenbrier county, W. Va., known as the 'White Sulphur Springs,' in which it became necessary to sell the property for the payment of debts, and to marshal the liens on the same in the order of their priority. The bill was filed in March, 1868, by Charles S. Gay and his wife and others, creditors and lienholders, suing as well for themselves as for all other creditors having lines on the real estate, the title to which, subject to the incumbrances, was then vested in the White Sulphur Springs Company. A portion of the indebtedness was represented by negotiable bonds, with coupons representing accruing interest thereon, and some of these had been severed from the principal obligation and bought for value by other holders. On April 23, 1868, the cause was referred to a master to report the amount and priorities of all liens upon the property, whether created by mortgage, deed of trust, judgment, or otherwise. On April 21, 1876, the master filed a report giving a statement of the liens, the name of each creditor, with the amount of the principal debt due to each, the amount of interest accrued thereon, and showing the total debt in each case, including principal and interest. The indebtedness was classified according to the order of priority of the liens. The first [8 S.Ct. 1280] six classes of debts enumerated in this report are the only ones material to be considered, as, in any event, they absorb the whole amount for which the property was subsequently sold. In the aggregate they amounted to $299,857.88, of which $185,133.27 is principal, and $114,724.61 is interest. The interest was calculated to and aggregated as of the same date, October 15, 1875, as to all the debts except the debts in the first class, known as the 'Singleton Trust Debt,' upon which the unpaid interest, amounting to $36,000, was calculated to July 1, 1868; the master reporting that all interest accrued on this debt after that date had been paid. On April 28, 1876, the court, by a decree, confirmed this report, no exception having been taken thereto; the decree having in fact been entered by the consent of parties. That decree also contained a clause declaring that the interest on the Singleton debt of $36,000, which had remained unpaid from July 1, 1868, should constitute a principal sum, bearing interest from the date of the decree. There was no express declaration in the decree in respect to the computation of interest on the other debts after October 15, 1875. On May 5, 1877, a decree of sale was made, in which there was no finding of any specific amount due, in default of the payment of which the property should be sold; but a recital that it appeared to the court 'that it is now for the interest of all the parties to this suit, and of all others interested in the subject involved therein, and there being now no objection, except on the part of the White Sulphur Springs Company, that there shall be a sale of the property known as the 'White Sulphur Springs Property,' and an application of proceeds of said sale among the parties entitled thereto, according to their legal rights and priorities.' The decree appointed commissioners to make the sale, who were required to receive from the purchaser the payment of 10 per cent. of the purchase money in cash at the time of the sale, and for the residue giving a credit of one, two, three, four, and five years, in equal installments, with interest thereon from the day of sale, and requiring good personal security for the payment of the first of said annual installments, and retaining the title as further security for all of said installments, or, in lieu of such personal security required of the purchaser for the first installment of purchase money, the commissioners were authorized to receive from the purchaser as collateral security therefor any evidences of debt proved in the cause, and which it may appear to the commissioners will certainly be paid from the proceeds of the sale, and which may belong to the purchaser offering the same as collateral security, the just and fair amount of which collateral shall be determined by the commissioners. On May 4, 1878, no sale having been made, the court entered a decree reciting that the interest on three bonds known as 'Erskine Bonds,' being those reported in class No. 6 by the master, and being designated as Nos. 1, 2, and 3 of that class, for the year ending October 15, 1868, and on the Beard bond, designated as 'No. 4,' in the same class, from October 15, 1868, to October 15, 1877, except 4 per cent. for the two years ending October 15, 1875, and October 15, 1877, had not been paid; that the property was ample to pay these bonds, principal and interest, as well as all prior liens; and that a sale of the property has been postponed in the interest of subsequent liens; and adjudged that the said unpaid interest on said bonds should stand on the same footing with the interest on said bonds which is evidenced by coupons, and bear interest from the dates at which said interest became due until paid; and that the assignees and holders of the interest of said bonds for said years, or any part thereof which had been assigned and transferred by the holders of the bonds, should be entitled to have priority over said bonds, coupons, and other interest not transferred; such interest, however, transferred as aforesaid, to be entitled to priority according to the dates of its maturity. On May 4, 1880, a decree was rendered confirming a sale of the premises previously reported as having been made by the commissioner for that purpose, to William A. Stuart, for $340,000, wherein it was directed that the purchaser be at once put in possession [8 S.Ct. 1281] of the property, the title thereto being retained by the court as security for the payment of the purchase money. The commissioners were directed to proceed to collect from the purchaser the cash payment of 10 per cent. upon the aggregate of the purchase money. The decree also contained a declaration that the court 'will hereafter make such orders as may be proper for the collection of the...

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