First Nat. Bank Of Cumeerland. v. Petitioner
| Decision Date | 28 January 1896 |
| Citation | 42 W.Va. 137 |
| Court | West Virginia Supreme Court |
| Parties | First Nat. Bank of Cumeerland et al. v. Parsons et al. |
1. Preference of Creditors Insolvent Debtor Insolvent's Conveyance.
"Where an insolvent debtor gives or attempts to give his creditor any preference which is void under the latter clause of section 2 of chapter 74 of the Code, such gift, conveyance, etc., of the in" solvent debtor will be dealt with by the court as required by such latter clause, whether such gift or conveyance be bona fide or be fraudulent in law or in fact.
Preference of Creditors Insolvent's Conveyance Application of Proceeds.
If the sale or conveyance was bona fide, and for a price equal to thefull value of the property, and the court has control of the proceeds, the preference will be set aside, and the proceeds will be applied to the debts, and paid to the creditors as required by the statute.
Preference of Creditors Insolvent's Conveyance.
If the sale is bona fide, but the price is not substantially equal to the then full value of the property, a sale will be made by the court, so far as may be necessaiy to avoid the preference and secure the rights of all the creditors.
Preference of Creditors Insolvent's Conveyance.
If the sale or conveyance is fraudulent, and gives such unlawful preference, then such sale or conveyance will be set aside, and a resale be made, so far as may be necessary to pay the honest claims against such insolvent frandulent debtor.
Preference of Creditor Insolvent's Conveyance Priority of Attacking} Creditor.
The creditor who is the first to assail the fraudulent conveyance of an insolvent debtor does not thereby acquire as the reward of his diligence a preference over the other creditors.
Husband and Wife Wife's Separate Estate Husband's Creditors.
A father conveys a tract of land to his son, and requires him to pay as a part of the consideration the sum of eight hundred dollars to a married daughter. This sum the son pays to his sister, who at the same time lends it to her husband, taking his note, executed to herself, for its repayment. There is no imputation against the bona fides of her claim against her husband except such inference as may be drawn from the relation of husband and wife. Held, such note of the wife is her sole and separate property, and is good against the creditors of her husband.
Parent and Adult Child Son's Services Parent's Creditors.
A son who has attained his majority makes an express contract with his father, whereby he is to work for his father at the price of forty two dollars per month and board. The services were rendered, and were shown to be reasonably worth the contract price. There is no imputation against the bona fides of the claim of the son, except such inference as may be drawn from the relation of father and son. Held, such claim of the son is not for that reason invalid as against the creditors of the father.
Sureties Release of Surety by Creditor's Acts.
Where a creditor, without the consent of the surety, releases any lien which he may have on the property of the principal debtor for the security of the debt, the surety will be discharged in toto or pro tanto, accordingly as the value of the property released was equal to or less than the amount of the debt.
9. Sureties Equitable Defense Equity Jurisdiction.
In this state the surety can not make such defense in a suit at law on a bond, such plea not being within the meaning of section 5 of chapter 126 of the Code, but is still, in this state, a matter of exclusive equitable jurisdiction.
10. Sureties Principal's Real Estate.
Where a principal and sureties are before thecourt, the land of the principal debtor should be subjected to sale in exoneration of the land of the sureties, so far as it can be done without too great delay; nor should the entire burden be thrown upon any one surety so far as it can be avoided without prejudice to the rights of the creditor.
11. Equity Practice Exceptions Error.
When a plaint iff in equity files exceptions to an answer, they should at once be set for argument, but, if not passed upon by the lower court, it will not be ground of error in the appellate court, unless such exceptions were material, and ought to have been sustained.
12. Equity Practice Reference Depositions.
An order of reference should not be made solely to enable the parties to take depositions. The cause should be so far developed by the pleading-sand the proofs as to show the propriety of an order of account, and the extent to which it should go.
J. P. Scott, F. O. Blue and Dayton & Dayton for appellants:
I. Compensation between parent and adult child. 31 Gratt.
II. There was nothing unmoral or illegal in Ward Parsons al-
lowing Lemuel W. Parsons the credit of $2,900 in the deed of March 4th, 1892. 2 Johns. Chy. 306; 26 Gratt. 563; 8 Leigh, 271.
III. A deed, honest and lawful upon its face, must be treated as such until it is shown to be otherwise by evidence. 22 W. Va. 357, syl. pt. 10; 17 W. Va. 717.
IV. The onus probandi is on him ivho alleges fraud, and the fraud must be clearly and strictly proved. 22 W. Va. 357, syl. pt. 9; 2 Munf. 310; Kerr, Fraud, 382.
V. The finding of a commissioner on a question, purely of fact,
must be given great weight. 30 W. Va. 147, syl. pt. 7; 26 W. Va. 710; 14 W. Va. 1; 21 W. Va. 698.
VI. Where the debts of a debtor are greater than his assets, he is insolvent.--37 W. Ya. 552.
VII. If insolvent and no positive fraud proved against him, a conveyance by him is for the benefit of all creditors. Code, 1891, c. 74, s. 2; 37 W. Ya. 552; 39 W. Va. 515; 32 W. Ya. 232.
VIII. Creditor must exhaust estate of principal before subjecting surety's estate. -20 W. Va. 211-222; 28 Gratt. 815; 32 Gratt, 254.
A. B. Parsons for appellant, cited Murfree, Off. Bonds, chaps. 20, 21; 22 U. S. 680, 703, 720; 40 IT. S. 207-9; 62 U. S. 76; 25 W. Va. 45; 29 W. Va. 527; Am. Ann. Dig. 1887, § 77; Id. 1890, § 66; 17 Cal. 504; 6 Ohio, St. 502; 5 Wait, Act. & Def. 227:, 231; 18 Eng. Rep. 104; 3 Wash. C. C. 70; 17 Ga. 521; 3 Binn. (Pa.) 520; 5 Md. 102; 11 Cash. 125; 30 Vt. 122; 46 K Y. 93; 6 Leigh, 547; Gilmer, 149; 1 Call, 18, 9; 10 Gratt, 252; 2 Lead. Cas. Eq. 1318, 1359; 7 Page, 560; 14 Burr, 273; 10 Johns. 387; 2 Johns, Chy. 554; 28 Ill. 486; 2 Jones, Eq. 321; Smedes & Marsh. 524; 24 Vt. 46; 1 Bart. Chy. Prac. §§ 16, 7, 10; Id. pp. 36, 37, 33; 2 Sto. Eq. Jur. 71, "74; 14 W. Va. 66; 27 W. Va. 677; 17 W. Va. 717; 34 W. Va. 442; 15 Ohio, 403; Brandt, Sur. §§ 223, 224; 37 W. Va. 552, 572; 39 W. Va 518, 540, 541, 622; 32 W. Va. 232, 34; 11 W. Va. 584; 15 W. Va. 733; 24 W. Va. 643; 35 W. Va. 634, syl. pt. 3; 54 Conn. 330; 64 Am. Dec. 363; 27 N. J. Eq. 157; 3K V. 432; 2 Tuck. Comm. (Ed. 1837) 482, 483.
W. B. Maxwell and A. J. Valentine for appellees, cited Code, 1891, c. 106, s. 10; Bump, Fraud. Con. 34, 36, 37, 56; 19 How. 376; 20 How. 45; 23 How. 477; 2 Pet. 112; 5 Ohio, 121; 4 W. Va. 71; 30 W. Va. 563, et seq.; 29 W. Va. 452; 10 W. Va. 347; 23 W. Va. 645; 10 W. Va. 106, 107; 15 W. Va. 512 519; 30 W. Va. 443; 32 W. Va. 507; W. Va. Bar, Jan. No. 1895, p. 12; 30 W. Ya. 568-9; 5 W. Va. 378-9; 21 Gratt. 182; 24 W. Va. 540; 22 W. Va. 422, 428; 23 W. Ya. 267; 27 W. Va. 658; 9 W. Va. 483; 6 Gratt. 509; 25 Gratt. 211; 6 Gratt. 524; Acts 1891, c. 123, p. 353; 34 W. Va. 480; 25 W. Va. 108-110; 26 W. Ya. 710-718; 29 W. Va. 6b9-666; 14 W. Va. 264; 3 Gratt. 518.
Holt, President:
On appeal from a decree entered on the 21st day of Jane, 1895, by the Circuit Court of Tucker county in four chancery causes heard together.
The facts are as follows: Defendant Ward Parsons, the debtor complained of, together with his wife, by deed dated the 14th day of March, 1892, sold and conveyed to his son, Lemuel W. Parsons, all his real estate, viz., uthe home farm on which Ward Parsons now resides, containing, with contiguous tracts, four hundred and twenty acres; seven other tracts, containing four hundred and sixty eight acres, on Backbone Mountains; and a tract of twenty two acres in Horseshoe Bottom, all in the county of Tucker." The consideration was eight thousand and three dollars, to be paid as follows: To G. M. Wicks, for the use of M. W. Dunham, a judgment for seven hundred and eighty seven dollars and thirty cents and fourteen dollars and forty eight cents costs; to the First National Bank of Piedmont, W. Va., the sum of two thousand, four hundred and eighty dollars, evidenced by two notes; to the Bank of Kingwood, the sum of three hundred and eighty six dollars; to Sarah A. Parsons, the wife of Ward Parsons, in eighteen months, the sum of one thousand, two hundred and thirty dollars, the amount being money borrowed by Ward Parsons of his wife, Sarah A., being her separate estate, derived from her father's estate, and borrowed from her, as evidenced by writing held by her; to A. H. Bonnefield, administrator, etc., seventy dollars; to W. H. GMover, the sum of sixty dollars; to the board of education of Black Fork district the sum of two hundred and sixty eight dollars and twelve cents and twelve dollars and twenty cents costs, a judgment; and two thousand and nine hundred dollars to be retained for lab)r and services rendered by Lemuel W. Parsons to his father, Ward Parsons, from the time of his majority, in 1886, to the present time; and to secure the payment of these sums as directed Ward Parsons expressly reserved on the face of the conveyance a vendor's lien for said creditors on the real estate thereby conveyed.
The four several creditors of Ward Parsons by their four several bills in equity attack this deed as fraudulent and void, as made with intent on the part of the grantor to defraud, hinder, and delay them in the recovery of their debts, of which frauds the grantee had notice, and in which he participated. It is conceded that all four bills base their right to overthrow the deed on precisely the same grounds, and therefore appellants have...
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