Dewing v. Hutton
| Decision Date | 13 April 1895 |
| Citation | 21 S.E. 780,40 W.Va. 521 |
| Parties | DEWING et al. v. HUTTON et al. |
| Court | West Virginia Supreme Court |
Submitted January 25, 1895
Syllabus by the Court.
1. An agent with unrestricted management of a mercantile farming and general trading business, carried on in his name, with the right to buy, sell, and exchange, has a lien on all the property accumulated in such business, and in his possession for all advancements made, expenses and liabilities incurred proper, necessary, or incident to such business, which is superior in right to any lien which may be created on such property by the reputed owner thereof; and while he may not without the consent of those interested, transfer or assign such lien to another, yet he has the right to sell a sufficient amount of such property to satisfy such liabilities, or may transfer the possession thereof to a trustee, to be held by him until such liabilities are fully discharged, and the lien thereby extinguished.
2. The possession of the trustee under such circumstances is the possession of the agent, and the lien is not released or waived.
3. Such trustee, with the consent of the interested parties, may sell the property and extinguish the lien.
4. When a commissioner to whom a cause is referred to settle large and intricate matters of account, containing many contested items, returns a report showing only an aggregation of items in accordance with his conclusions, and the report is excepted to for this reason, and the circuit court overrules such exceptions and confirms the report on appeal, this court will reverse the decree of confirmation, and remand the cause, that a proper itemized statement of such accounts may be made.
Appeal from circuit court, Randolph county.
Action by W. S. Dewing and others against Elihu Hutton and others. Plaintiffs had judgment, and defendants appeal. Reversed.
Butcher & Harding, John Brannon, John W. Mason, L. D. Strader, and Brown, Jackson & Knight, for appellants.
W. T Ice and E. D. Talbott, for appellees.
Ewing, Melvin & Ewing, for creditors.
Appeal of Elihu Hutton and others from a final decree rendered by the circuit court of Randolph county in a certain chancery cause therein pending at the suit of W. S. Dewing & Sons. The circumstances which gave rise to this litigation are as follows, to wit: The plaintiffs, citizens of Kalamazoo, state of Michigan, in the year 1885, sent defendant Winchester, an experienced timber man, into the state of West Virginia, with authority, as their general agent, in whom they reposed great confidence, to buy timber lands for them. His agency was to be kept a secret, at least for a time, and purchases were to be made in his name; they to furnish the means, and pay him a salary of $25 per week. Winchester, on the 26th day of May, 1885, entered into a written contract with defendant Hutton--a man of wide experience and influence, and already in the business--to make purchases for him according to the stipulations and conditions contained in such contract. This was certainly within the scope of Winchester's agency, and inured to the benefit of the plaintiffs, who, by their many acts of acceptance, etc., fully ratified what Winchester had done in this regard. This contract embraced lands within a certain boundary on the head waters of Cheat river, in the counties of Randolph and Pocahontas. A large territory was thus purchased, and passed into the possession and control of the plaintiffs, who, through their agent, began to cut and market the timber thereon. In the meantime Winchester and Hutton entered into a partnership to buy lands on Gauley river and its tributaries; Hutton to do the buying, and Winchester to do the selling, at a minimum price of two dollars per acre; expenses to be deducted, and the profits to be equally divided between them. Afterwards B. L. Butcher was taken into the partnership, to assist in doing the work, in a legal capacity, and to have a share in the profits. Winchester wrote to the plaintiffs, telling them of this partnership arrangement, and proposing to them that they should take the lands at two dollars per acre,--they to take his share of the profits, and pay for the land, including expenses and the profits that would be coming to the other members of the partnership; that this arrangement was to be kept a matter of secrecy between themselves. The plaintiffs at first declined to enter into the arrangement, but finally consented, with the understanding that Butcher was to be bought out, which was done, and he was retired from the partnership. Afterwards Hutton was informed that the lands had been sold to the plaintiffs at two dollars per acre, and plaintiffs furnished the money to pay for the lands, the expenses, and one-half the profits to Hutton. It was the consideration of the fact that they were to have one-half the profits that induced plaintiffs to purchase these lands. In the meantime Winchester and Hutton had entered largely into the store and farming business at Huttonsville, in Randolph county, which was principally managed by Winchester, through his agent, John C. Arbogast, in whose name such business was run, and by him conducted as manager. The fact that Winchester and Hutton were tacitly understood to be behind him gave him standing and credit, and a large amount of property was accumulated in his name. Winchester used the money of the plaintiffs in this business, pretending to them that it was going into the land purchases, but with the understanding with Hutton that if his earnings and interest in the land sales were sufficient to cover the Arbogast investments, in a final wind-up, Hutton was to have all the Arbogast property. Being speculative and visionary, no other result was ever contemplated by them, especially Winchester, but how he was to derive any benefit from the arrangement is not made to appear. W. S. Dewing, becoming aware of the extravagant notions and transactions of Winchester, and the wild chase he was leading Hutton, and fearing that his firm was about to lose some money, owing to the fact that they advanced, as he believed, a much larger sum than they had or would receive a return from, induced Hutton, without the knowledge or consent of Winchester or Arbogast, to execute a deed of trust on all his property, including the Arbogast property, for the purpose of securing the "payment of the account of Dewing & Sons against said Elihu Hutton, which approximately aggregates the sum of $25,000, which sum is made up of cash advances to said Hutton by said Dewing & Sons, through their agent, A. H. Winchester, in the purchase in real estate in W. Va., subject, however, to settlement and adjustment hereafter by the parties in interest, as to credits." This deed was executed the 16th, and recorded the 17th, day of November, 1888. John C. Arbogast, learning of said trust deed, strenuously objected thereto, and refused to be bound thereby, in so far as the property under his control was concerned,--claiming that such property was not the property of Elihu Hutton, but was the property of Winchester, whose agent he was, and insisting at least that all debts contracted by him in relation to the business were entitled to be first paid out of the proceeds of the property. He saw W. S. Dewing, who agreed that his claim was just, and admitted to the various creditors in Wheeling and Baltimore that their debts against Arbogast ought to be paid, but refused to enter into any writing to this effect. On the 26th day of November, 1888, Hutton and Arbogast, understanding that it was with Dewing's consent, so expressed in the deed, executed another deed of trust, conveying the Arbogast property, in trust, to secure the claim of Dewing & Sons against Hutton and the Arbogast creditors, on an equal footing. This deed was objected to, and never recorded. Finally, on the 3d day of December, 1888, a third deed of trust was executed by John C. Arbogast and Arthur H. Winchester, trustee, conveying to Joseph F. Harding, trustee, all the Arbogast property, to secure the Arbogast creditors, pro rata, and was admitted to record the 5th day of December, 1888. The trustee under this last deed took possession of all said property, and was proceeding to administer the same, and pay the debts thereby secured, when the plaintiffs filed their bill, obtained an injunction, and had said property taken charge of by a receiver of the court, and sought to have their trust debt declared a first lien thereon. Defendant answered said bill, claiming that he owned plaintiffs nothing, but on a fair settlement they would be justly indebted to him, and prayed for such a settlement, and a decree for any amount that might be due him against plaintiffs. John C. Arbogast and his creditors answered, claiming that their debts should be first paid out of the trust funds, in accordance with the last deed. Other answers were filed, and general replications thereto, and special replications to affirmative matters. Plaintiffs also filed an amended bill, seeking further relief against defendant Hutton and others. The cause was referred to a commissioner to ascertain and settle the various controverted matters between the parties. The commissioner returned his report, to which the defendants excepted, but the court overruled the exceptions, and entered a decree in favor of plaintiffs, granting the relief sought; and from this decree defendant Hutton and the Arbogast creditors appeal.
The following is the assignment of errors: ...
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