Edgell v. Smith

• Decision Date: 30 November 1901
• Citation: 40 S.E. 402,50 W. Va. 349
• Court: West Virginia Supreme Court
• Parties: EDGELL et al. v. SMITH et al.

40 S.E. 402

50 W.Va. 349

EDGELL et al.

v.SMITH et al.

Supreme Court of Appeals of West Virginia.

Nov. 30, 1901.

BILL TN EQUITY—AMENDMENT—DEPOSITIONS —CANCELLATION OF DEED—FRAUDULENT CONVEYANCE—LACHES.

1.A bill in chancery cannot be so amended as to introduce new matter, and entirely change the original purpose of the suit, and have relief upon a different ground.

2.Depositions proving matters not in an original bill when taken, cannot be read to support substantive matters in an amended bill afterwards filed; and a decree based on such amended bill, supported by only such depositions previously taken, is erroneous.

3.When an original bill shows a case wherein there can be no relief because it is based on and grows out of a conveyance fraudulent as to creditors, no amended bill is allowable to the guilty plaintiff.

4.A suit in equity cannot be maintained to cancel a deed made to hinder, delay, or defraud creditors, though grantor and grantee are equally guilty; and equity will take no step to help either, but will leave them where they placed themselves, under the maxim, "In pari delicto potior est conditio defendentis."

5.To make a conveyance fraudulent as to creditors, it is not necessary that the intent be to entirely defraud them out of their debts.If the intent is to either hinder or delay them, or defraud them, by a conveyance which places an obstacle in the way of the prosecution of their legal remedies, it is void under the statute against fraudulent conveyances.

6.A conveyance by a debtor to secure his property from immediate subjection to debts of creditors is a fraudulent act on his part, and as to him void as against them, though honestly made, the debtor intending that his creditors shall be ultimately paid.

7.To set aside a deed for fraud, suit must be brought without unreasonable delay after discovery.

(Syllabus by the Court.)

Appeal from circuit courtWetzel county; G. W. Farr, Judge.

Bill by Daniel Edgell and others against L. L. Smith and others.Judgment for complainants, and L. L. and H. L. Smith appeal.Reversed.

Wiley & Kelfer, for appellants.

Mclntlre & Mclntlre, for appellees.

BRANNON, P. Daniel Edgell and others, as heirs of Pinkney Edgell, ' exhibited a bill In equity in the circuit court of Wetzel county against L. L. Smith and H. K Smith, her husband, and others, stating that on the 5th day of August, 1890, "the said Pinkney Edgell was indebted to various persons in small sums of money, and, being seized of a tract of land lying in Grant district of said county, containing 42 acres, more or less, he was persuaded by the defendantsL. L. Smith and H. L. Smith to convey said tract of land to L. L. Smith until he could arrange with his creditors; that on the 5th day of August, 1890, the said Pinkney Edgell, at the instance and request of H. L. Smith and L. L. Smith, did, without any consideration whatever, convey to L. L. Smith, wife of H. L. Smith, said 42 acres of land; that at the time of such conveyance it was understood between the said Pinkney Edgell and defendants Smith that L. L. Smith and her husband were to reconvey to the said Pinkney Edgell upon the same conditions, with the same covenants, and without any reservation whatever, the said 42 acres of land, whenever she should be requested thereafter by said Pinkney Edgell; that, after said Pinkney Edgell had arranged with his creditors, he did request said L. L. Smith and H. L. Smith to reconvey said land to him, and that on the 12th day of March, 1894, L. L. Smith and H. L. Smith did execute to said Pinkney Edgell a deed for said 42 acres of land, but, without delivering said deed to Pinkney Edgell, sent the same to the clerk of the county court for recordation, and that the same was recorded."Both said deeds stated the consideration as $350, and acknowledged the payment thereof.The bill alleged that the statement of the consideration in both deeds was false, and that no consideration was ever paid by L. L. Smith to Edgell, and that Edgell never paid L. L. Smith any consideration whatever, and that during all the time L. L. Smith held title Pinkney Edgell held possession of the land, and that L. L. Smith had never had control of it The bill further stated that L. L. Smith and H. L. Smith, "for the purpose of defrauding Pinkney Edgell and his said children, did, without his knowledge, reserve by a clause in said deed of conveyance all oil, gas, and coal privileges, which she now attempts to hold as against his heirs at law."The bill further shows that afterwards Pinkney Edgell conveyed to Selecta Edgell, his daughter, the said land, reserving the oil, gas, and coal; and that later said Selecta Edgell and her husband, Samuel Edgell, conveyed the same land to the said H L. Smith, reserving the oil, gas, and coal.The bill further stated that the Smiths had leased the land to the South Penn Oil Company for oil and gas purposes, which had bored two oil wells on the land, and produced large quantities of oil therefrom, and that one-eighth of it—the royalty oil—was being credited to L. L,.Smith.The bill, thus charging that the conveyance from Pinkney Edgell to L. L. Smith, as well as that from L. L. Smith and H. L. Smith to Pinkney Edgell, was void for want of consideration, and that the reservation in the deed of L. L. Smith and H. L. Smith to Edgell of the oil, gas, and coal was made without the knowledge or consent of said Edgell for the purpose of defrauding Pinkney Edgell, prayed that both deeds be decreed null and void, and be set aside, and that the oil company be restrained from delivering to L. L. Smith any oil.A great many depositions were taken on both sides; the defendants Smith and wife having answered, denying all the material allegations of said bill, and averring that the said conveyance from Pinkney Edgell to L. L. Smith was an absolute conveyance in good faith, and that the clause inserted in the deed of the Smiths to Pinkney Edgell was inserted with the full knowledge and consent of Pinkney Edgell.In short, the answer denied all charges of fraud in the bill.After all the depositions had been taken, some two years after the institution of the suit the plaintiffs, without leave of court, filed in the clerk's office an amended bill, in which they alleged that the conveyance from Pinkney Edgell to L. L. Smith was in truth made when Pinkney Edgell was being pressed by his creditors, and had no means to pay them, and that he was persuaded by the said Smiths to make it with the promise and understanding that they would furnish him with money to liquidate his indebtedness, and that when his creditors should be fully paid, and he had refunded to them the money furnished Edgell for paying his creditors, then they, the said Smiths, would, upon request, reconvey the land to Pinkney Edgell without any reservations; and that there was no other consideration for the conveyance.The amended bill denied that the Smiths had complied with their promise to furnish money with which to pay Edgell's debts, and repeated the charge of the original bill that the clause reserving oil, gas, and coal in the reconveyance of the land from the Smiths to Edgell was inserted therein without consideration, or the consent or knowledge of Edgell, with intent to defraud him of said minerals.The decree of the circuit court was that the conveyance from Edgell to Mrs. L. L. Smith was on fact but a mortgage to secure L. L. Smith a loan of money, and not an absolute conveyance, and that the money had been paid back to Mrs. Smith; and that Pinkney Edgell was entitled to have the land reconveyed to him, without reservation.In his lifetime, and died the owner of the oil, gas, and coal; and that his heirs were entitled to the oil and gas, subject to the rights of the South Penn Oil Company; and that the reservation of the said minerals In the deed reconveying the land from the Smiths to Edgell was void, and that same be canceled.From said decree L. L. Smith and H. L. Smith appeal.

This decree is based solely upon the amended bill, because there is not in the original bill a word of allegation that the deed from Pinkney Edgell to L. L. Smith was only as security for a loan.This inevitably presents the question whether that decree can stand upon the amended bill.It cannot, for two reasons.The first reason Is that it is a departure from the original bill, presenting a theory of relief different from, distinct from, not germane to, the allegations of the original.The original bill calls for relief upon the theory that the conveyance was made to shield the property from creditors with the promise from the Smiths that it would be re-conveyed to Edgell after settlement with creditors, and it averred that the Smiths paid no money whatever, and it did not hint that they were to furnish any money as a loan.It set up that it was a conveyance upon a secret trust of reconveyance, made solely to save the land from creditors, utterly denying that it was upon any money consideration or loan from the Smiths.The amended bill states that it was made simply to secure a loan, —a silent mortgage.The two bills are inconsistent with each other.In Bird v. Stout, 40 W. Va. 43, 20 S. E. 852, this court held: "An amended bill must not introduce another and different cause of suit from that of the original bill, but an amended bill is no departure from the original if it tend to promote a fair hearing of the matter of controversy on which the suit was originally really based, provided it do not introduce a new substantive cause of suit different from that stated, and different from that intended to be stated, in the original bill.An amended bill cannot be allowed containing statements inconsistent with the nature of the original bill or changing the cause of suit.By it allegations may be changed and modified, and others added, provided the identity of the cause of suit be preserved."In Piercy v. Beckett, 15 W. Va. 444, it was held that "amendments can only...