Armstrong, Crislip, Day & Co. v. Painter
| Decision Date | 22 December 1914 |
| Docket Number | 2184. |
| Citation | 83 S.E. 1027,75 W.Va. 393 |
| Parties | ARMSTRONG, CRISLIP, DAY & CO. v. PAINTER ET AL. |
| Court | West Virginia Supreme Court |
Submitted November 24, 1914.
Syllabus by the Court.
In a lien creditors' suit under the provisions of section 7 c. 139, Code, serial sec. 5099, claimants of liens who have not asserted their claims by pleadings of any kind, whether formal parties or not, must, in order to have their claims allowed and provided for in the decree, appear and prove them.
On a bill taken for confessed in such a suit, provision in the decree for a lien not asserted or claimed by any pleading nor by appearance and proof is an error apparent on the face of the record, though such lien was reported by the commissioner to whom the cause was referred.
If a lien in such suit has not been claimed by any pleading in the cause, the report of the commissioner should show the claimant or holder thereof appeared and proved it.
Full proof of a trust deed or mortgage lien requires production of the note secured, if there was one, or an excuse for its nonproduction.
A motion by the debtor, under section 5, c. 134, Code, serial sec. 4979, to reverse a decree on a bill taken for confessed for error in the allowance of a lien not claimed, which tacitly admitting the lien, claims a credit on the debt by reason of a payment thereon, opens the decree, as to such lien, only so far as to let in the credit.
On reversal of the decree allowing such credit, on an appeal the appellate court will affirm the original decree.
A check of the debtor, payable to the lien creditor, dated long before anything was due on the note secured by the deed of trust, bearing a memorandum indicating payment on account of some other transaction, payable to the creditor and showing payment of the amount thereof to him, is insufficient to establish right to a credit on such note.
Appeal from Circuit Court, Taylor County.
Suit by Armstrong, Crislip, Day & Co. against William J. Painter and others. From decree for defendants, plaintiff appeals. Reversed, and decree pro confesso affirmed.
John L. Hechmer, of Grafton, for appellant.
Warder & Robinson, of Grafton, for appellees.
The purpose of this appeal is relief from a decree requiring the appellant to repay to the appellees a portion of the money previously decreed to him in a lien creditors' suit. After the liens had been ascertained by a commissioner and fixed by the court, and the real estate sold, the debtors, claiming a credit of $200 on one of the debts, the amount of a certain check, and interest thereon, came in, after notice, and moved the court to reverse the decree, in so far as it declared that certain debt to be a first lien on a certain tract of land, and the court, deeming them entitled to the credit, and the decree to be erroneous, entered a decree reversing it, in so far as it gave the preference complained of, and decreed to the debtors repayment to the extent of the amount of the check and interest thereon, aggregating $266.70. Later the appellant, pursuant to notice, moved the court to set aside said decree of correction and repayment, and the court, declining to do so, overruled the motion and confirmed the decree.
The suit was brought to March rules, 1908, by Armstrong, Crislip, Day & Co., a corporation and judgment creditor, in a small amount, of Wm. J. Painter and Mary J. Painter, partners doing business as J. C. Painter & Bro. The members of the firm owned a good deal of valuable real estate, but were heavily indebted. Clarence A. Painter was made a party because he was a part owner of some of the land. There were numerous judgment liens on the property, and deeds of trust securing other debts had been placed upon some of it. One of such deeds created a lien on a tract of land containing 225 1/2 acres in favor of Adolphus Armstrong for the sum of $2,426.14. The debtors making no formal defense, the bill was taken for confessed, and the cause referred to a commissioner by a decree entered April 28, 1908. A decree entered October 24, 1908, confirmed his report, which was not excepted to, fixed the amounts and priorities of the liens, and ordered the lands sold. Later the decree of sale was modified so as to provide for division of the land into lots for purposes of sale, and the decree, as modified, was executed, and the sale confirmed, and the purchase money ordered to be distributed by a decree entered May 8, 1909.
Only the Armstrong debt is affected by the corrective procedure of which complaint is made. Armstrong having died before the suit was brought, A. E. N. Means, sheriff, and, as such, administrator of his estate, was made a party. Before the motion to correct the decree was made, G. H. A. Kunst seems to have succeeded Means as administrator. For some reason not made plain by the record, notice of the motion was given to both of them, and the decree of repayment is against both as administrators.
Means, sheriff and administrator, was made a party defendant, and the bill exhibits the deed of trust, but is silent as to payment or nonpayment of the debt. No evidence as to the existence or amount of the debt, other than the deed of trust, seems to have been considered by the commissioner. He did not return with his report the note or any deposition pertaining to it. In no way does it appear that the administrator appeared before him and asserted any claim under the deed of trust. Nor does the report or any other portion of the record, other than the default recorded, show any admission of the debt or its amount on the part of the defendants. One of them testified as to the market and rental values of the land, and another filed an affidavit to establish the propriety of division of the tracts into lots for purposes of the sale. Treating the decree as one upon a bill taken for confessed, and therefore susceptible of remedy as to error, though final in character, under the provisions of section 5, c. 134, Code, serial sec. 4979, the court regarded the lack of claim and proof as to the subsistence and amount of the lien as an error apparent on the face of the record, justifying reversal or correction. In this way the loose and more or less dangerous practice of reporting all liens disclosed by the records of the clerk's office of the county court, whether presented and claimed or not, is challenged. Of course, the bill of a single lien creditor constitutes a basis or foundation for the assertion of all other liens on the same property, but this does not logically dispense with the necessity of demand on the part of such other lienors for the enforcement of their liens, which may be made by a petition or answer or proof of it before the commissioner. Prudence and due regard for the rights of the debtor and such lienors as do present their claims indicate the propriety, at least, of the requirement of a demand in some form, on the part of all who are allowed to participate. The record of a lien is not conclusive evidence of continued or subsisting right in him who originally acquired it. He may have assigned it, or it may have been equitably discharged by payment. If he is required to appear and prove his claim, reasonable provision is thus made against such possibilities.
If, upon the motion made in this cause, the entire record may be examined, lack of any demand for enforcement of the Armstrong lien and of proof of the amount thereof is clearly obvious. The bill filed by another creditor charges the record existence of the lien and exhibits a copy of the deed of trust, but is wholly silent as to whether it belongs to the Armstrong estate or remains unpaid in whole or in part. It says the plaintiff "is not informed" as to that lien. The administrator, though formally made a party defendant, neither answered the bill nor appeared before the commissioner. The bill asserted no claim for the Armstrong estate. It merely recited what the record disclosed, and denied knowledge on the part of the plaintiff as to whether that estate was entitled to demand any money by reason thereof. Confession of this allegation, by failure to answer, does not establish the elements of a complete right of recovery, nor does it seem to amount to compliance with the requirements of procedure in creditors' suits.
The statute (section 7, c. 139, Code, serial sec. 5099) clearly contemplates action on the part of the lienholder. After having authorized the making of all persons having liens...
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