Bank Of Marlinton v. McLaughlin

Decision Date07 February 1939
Docket Number(CC 603)
PartiesBank of Marlinton, etc. v. L. P. McLaughlin, et al.
CourtWest Virginia Supreme Court
1. Equity

Laches is delayed which operates prejudicially to another person's rights. Carter v. Carter, 107 W. Va. 394.

2. Fraudulent Conveyances

The recording of a fraudulent deed is not itself sufficient to charge a creditor of the grantor with notice of the fraud.

Suit by the Bank of Marlinton, etc., against L. P. McLaughlin and another to cancel and set aside a deed as being in fraud of creditors. The trial chancellor sustained a demurrer to the amended bill, and certified to the Supreme Court of Appeals queries whether plaintiff presented a cause for equity cognizance, and whether plaintiff was precluded by laches from prosecuting the suit.

Reversed and remanded.

Richard F. Currence, for plaintiff. Summers H. Sharp, for defendants.

Maxwell, Judge:

The sole question herein for decision is the sufficiency of an amended bill to which the trial chancellor sustained a demurrer, and certified to this court the queries whether the plaintiff has presented a cause for equity cognizance, and whether laches appears from the allegations of the amended bill, barring the plaintiff from the right to prosecute this suit.

The proceeding is based on Code, 40-1-1, which condemns conveyances or charges upon real or personal property executed with intent to delay, hinder, or defraud creditors. The object of the suit is to cancel and set aside as a fraud against the plaintiff a deed executed by L. P. McLaughlin May 18, 1931, conveying to his wife, Julia, a tract of 25 acres of land near Hillsboro in Pocahontas County. It is alleged in the amended bill that the fraudulent intent of the grantor was known to the grantee.

From the amended bill it further appears that at the time of the execution of the deed the plaintiff, as assignee and liquidating agent of the Bank of Hillsboro, held a negotiable note for $2,549.00, dated November 15, 1926, signed by L. P. McLaughlin, C. P. Brown, J. K. Marshall and A. W. McLaughlin, payable on demand to the Bank of Hillsboro. Against the makers of the note the plaintiff instituted an action of debt April 20, 1931. Process was promptly executed on all of the defendants except Brown. On the 18th of May, 1931, after process had been served on L. P. McLaughlin in the action at law, the above mentioned deed from him to his wife was executed and acknowledged by him. Four days subsequently the deed was recorded in the office of the clerk of the county court of Pocahontas County. Later that year judgments on the debt were rendered in favor of the plaintiff against L. P. and A. W. McLaughlin and Marshall.

This suit, seeking cancellation of the deed as a fraud, was instituted early in 1938 and the original bill was filed at May Rules.

Because of the intervening of much time a period of almost seven years between the execution of the deed and the institution of this suit, the grantee in the deed, the defendant, Julia B. McLaughlin, assigns as the principal basis of her demurrer the laches of the plaintiff allegedly disclosed by the amended bill.

Lapse of time is an element but not the controlling factor of laches. 10 Ruling Case Law, p. 396. Unlike the inexorable bar of a statute of limitations grounded solely on the passing of time, laches does not arise prima facie from the mere fact that time has gone by within which equity might have been invoked. Williams v. Croft Hat & Notion Co., 82 W. Va. 549, 553, 96 S. E. 929. Laches is delay which operates prejudicially to another person's rights. Carter v. Carter, 107 W. Va. 394, 148 S. E. 378.

If delay in the institution of a chancery cause can be reasonably explained (Williams v. Croft Hat & Notion Co., supra), and if no prejudice to another has resulted from the delay (LePage v. Bailey, 114 W. Va. 25, 170 S. E. 457), essential bases for application of the doctrine of laches are non-existent.

In the amended bill the plaintiff alleges that this suit was not instituted at an earlier date because no officer nor agent of the plaintiff had knowledge of the McLaughlin deed of May 18, 1931, until a short time prior to the institution of this suit; that following the date of the execution of the deed by L. P. McLaughlin to his wife there was no change of possession of the property, and no circumstance nor incident of any kind had caused any representative of the plaintiff to deem it necessary to examine the public records of the county to ascertain if the McLaughlin land had been aliened or encumbered subsequent to the time that McLaughlin became indebted under the note above mentioned.

For the demurrant, however, it is urged that the recordation of the McLaughlin deed in May, 1931,...

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19 cases
  • Bank Of Marlinton v. McLaughlin., (No. 9180)
    • United States
    • West Virginia Supreme Court
    • October 28, 1941
  • Bank Of Marlinton v. Mclaughlin, 9180.
    • United States
    • West Virginia Supreme Court
    • October 28, 1941
  • Brand v. Lowther
    • United States
    • West Virginia Supreme Court
    • December 18, 1981
    ...prejudicially to another person's rights. Carter v. Carter, 107 W.Va. 394, 148 S.E. 378 [1929]." Syl. pt. 1, Bank of Marlinton v. McLaughlin, 121 W.Va. 41, 1 S.E.2d 251 (1939). "Where a party knows his rights or is cognizant of his interest in a particular subject-matter, but takes no steps......
  • Bank of Marlinton v. McLaughlin
    • United States
    • West Virginia Supreme Court
    • October 28, 1941
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