First Nat. Bank Of Parkersburg v. Handley

• Decision Date: 21 December 1900
• Parties: FIRST NAT. BANK OF PARKERSBURG. v. HANDLEY et al.
• Court: West Virginia Supreme Court

48 W.Va. 690

37 S.E. 536

FIRST NAT. BANK OF PARKERSBURG.

v.HANDLEY et al.

Supreme Court of Appeals of West Virginia.

Dec. 21, 1900.

NOTE—PAYMENT—WHAT CONSTITUTES.

1. Syllabi in Gray v. Association, 37 S. E. 533, approved.

2. H. and others, devisees of E., executed two joint notes, at eighteen months and three years, respectively, to B., and a deed of trust on the real estate devised to them by E., for the amount of a past-due note made by E., which was a charge against said real estate. Held that, in the absence of an express agreement to that effect, the taking of the two notes by B. was not an absolute payment of the note, and release of the estate of E. from liability therefor.

(Syllabus by the Court.)

Appeal from circuit court, Cabell county; E. S. Doolittle, Judge.

Bill by the First National Bank of Parkers-burg against Edward C. Handley and others. Decree for plaintiff, and Hattie Handley, administratrix, appeals. Modified.

Vinson & Thompson, for appellant.

L. D. Isbell and Simms & Enslow, for appellee.

McWHORTER, P. On the 16th day of January, 1894, Elizabeth Handley being holder of 25 shares of stock in the Baltimore Building & Loan Association, said associa tion advanced to her the sum of $2,500 or. her said stock. To secure the payment thereof to the association, she on that day executed her bond to the said association for said amount, obligating herself to pay to said association monthly interest on said sum of $2,500 at the rate of 6 per centum per annum, monthly dues on said shares of stock, and monthly premiums thereon, and all fines assessed against her under the rules and regulations of said association, and all taxes or assessments accruing on or against the real estate hereinafter mentioned, and all premiums of insurance necessary to keep the said property insured in such sum as the association should require, not exceeding $2,500. and all fees, costs, and expenses to or for which the association or the trustee in the deed of trust securing said bond might become liable by reason of any litigation touching the transaction, and executed a trust deed on her residence property in the city of Huntington to L. D. Isbell, trustee, to secure said bond and the payment of the money to said association. Said Elizabeth Handley afterwards executed a second deed of trust on the same property to secure to J. N. Camden the payment of certain notes therein described. On the 6th day of August, 1895, the First National Bank of Parkersburg, a corporation, filed its bill in the circuit court of Cabell county against Ed. C. Handley, Howard Haudley, Hattie Handley, administratrix of the estate of Elizabeth Handley, deceased, and In her own right, Belle Handley, Kate Frizzell, Isaac Handley, James Handley, 01-lie Handley, Thomas A. Wyatt, trustee, the Baltimore Building & Loan Association, a corporation, Z. T. Vinson, J. N. Camden, J. W. Baldridge, and H. T. Lovett, trustee, alleging the execution of the bond and deed of trust to the trustee, Isbell, for the benefit of the said association, and the deed of trust to secure Camden; that plaintiff had discounted for Camden the notes, and was the holder and owner thereof, and entitled to the benefit of the trust deed to secure the payment thereof; that Elizabeth died, leaving, as her heirs and distributees, the defendants Handley named, and said Kate Frizzell; that she was possessed of no personal property except her household goods, but was the owner of the said property in Huntington, and also a tract of 22 acres of land in Wayne county; that Belle Handley, Hattie Handley, Howard Handley, Kate Frizzell and her husband, W. S. Frizzell, heirs of Elizabeth Handley by deed of March 18, 1895, conveyed to H. T. Lovett, trustee, the said 22 acres of land in Wayne county, to secure to James W. Baldridge the payment of two notes, for $1,277.22 each, dated March 18, 1895, payable in eighteen months and three years, respectively, from date, with interest, made by the said Belle Handley, Hattie Handley, Howard Handley, and Kate Frizzell, negotiable and payable to the order of said Baldridge at the Huntington National Bank; that saidnotes and deed of trust were given without consideration, and with the intention of hindering, delaying, and preventing the collection of plaintiff's debt; that as a matter of fact there was no money due from the estate of Elizabeth Handley to Baldridge, and the attempt to give said trust deed, and make the same a preferred lien on said property, to the exclusion of other creditors of the estate of Elizabeth Handley, was a fraud upon the rights of the other creditors of said es'tate, and the deed should be set aside, and the property should be charged with the payment of all the debts of the estate pro rata; that the Huntington property would not suffice to pay the liens upon it, and plaintiff would have to have recourse to the Wayne property, and that it has a specific charge against the same for any balance that may remain unpaid after exhausting the Huntington property; and prays that the Huntington property be sold, and the surplus arising after the payment of the Baltimore Building & Loan Association be applied as a credit on plaintiff's debt; that the account against the estate of Elizabeth Handley be settled; that same be referred to a commissioner; and for general relief. On the 22d of July, 1896, the bill having been taken for confessed as to all the defendants except J. W. Baldridge, who filed his answer, to which plaintiff replied generally, the cause was referred to a commissioner to ascertain and report of what property Elizabeth Handley died seised and possessed, what debts she owed, what liens were on the property and their priorities, and to settle the administration account of the administratrix, Hattie Handley. The answer of J. W. Baldridge avers that Elizabeth Handley died seised of the Huntington property purchased from Z. T. Vinson, and of 22 acres in Wayne county; that by will dated May 10, 1892, she devised the said 22 acres to Belle Handley, Hattie Handley, Howard Handley, and Kate Frizzed, who executed to H. T. Lovett the deed of trust on said 22 acres, as set out in the bill, but denies all fraud and fraudulent intention in its execution; avers that it was executed for good and valuable consideration, and that the debt therein secured was due from the estate of Elizabeth Handley to respondent; avers that his debt secured by said deed of trust of $2,454.44 was still due and unpaid, and was a valid lien on said 22 acres, and that he was a bona fide purchaser, for valuable consideration. Hattie Handley, administrator of Elizabeth, filed her answer to the bill of complainant, and replied, generally, to the answers of Baldridge and of the Baltimore Building & Loan Association, and says that the consideration of the notes made by herself and others to Baldridge was a note held by said Baldridge on her brother Ed. C. Handley, and originally indorsed by their mother, Elizabeth Handley; that It was negotiable, and was never protested, and Elizabeth was by such nonprotest released from liability or obligation to pay it; that at the time of the making of the new notes Elizabeth was not liable, and they made the new notes to help their brother Ed. 0. Handley out, and Baldridge accepted the new notes and security in full payment of the original note, and that both said Ed. C. Handley and Elizabeth Handley were released by the payment aforesaid, and said note was surrendered to Ed. by Baldridge, and canceled by Ed.; that respondent refused to make any new obligation on the part of the estate of Elizabeth Handley by signing the new notes as administratrix, but executed it solely in her individual capacity, for the relief of her brother Ed. C. Handley; and, responding to the answer of the loan.association, says that Elizabeth Handley borrowed $2,500, and had paid back on account of said loan $1,270, which should be credited upon said trust debt, as per statement filed as "Exhibit Bryan"; that she had endeavored to have said association give her proper credits therefor, but it had declined to do so, and claimed $2,197, after exhausting said payments of $1,270, being its claim on the theory that it is a building and loan association, and entitled to charge premiums, dues, and fines in excess of the legal rate of interest. Respondent says it is a foreign building and loan association, created under the laws of the state of Maryland; is doing business in West Virginia; that it has no legal existence, and can do no business, in this state, except it conform to the laws of West Virginia, and bring itself within and under the protection of sections 25-29, c. 54, Code, which it had not done, and files copy of by-laws to show that it has not done so; and that, if it had so complied with our local statutes, it could not charge and collect a usurious rate of interest, the statute itself being unconstitutional, illegal, null, and void; and respondent pleads usury to the debt claimed by the association, and prays that the principal sum borrowed, with its legal rate of 6 per cent, interest, may be' credited by the payments, with their accumulated interest; and that the debt claimed by Baldridge may be decreed no charge against the estate of decedent, and for general relief; which answer was treated as a cross bill as well. J. W. Baldridge replied to the answer of the administratrix, Hattie Handley, that the allegations of said answer are not true; that the original note was a debt of Elizabeth Hand-ley; that it was duly protested, and binds her estate. And on the 21st day of April, 1898, the Baltimore Building & Loan Association tendered its answer to the cross bill of Hattie Handley, administratrix, which was ordered to be filed, and to which said Hattie and the plaintiff tendered their exceptions, which were ordered to be filed. The answer alleged that it was duly incorporated under the laws of Maryland, and doing business in the city of Baltimore,...