Garland v. Rives

• Decision Date: 29 May 1826
• Citation: 25 Va. 282
• Parties: Garland v. Rives
• Court: Virginia Supreme Court

25 Va. 282

Garland v. Rives

Supreme Court of Virginia

May 29, 1826

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This was an appeal from the Chancery Court of Staunton; where Rives filed his bill against Garland, Wingfield, Coleman and Lewis Nicholas, to set aside certain conveyances, on the ground of fraud. The whole history of these transactions is fully and minutely detailed in the first part of Judge Green's opinion, which follows. It will, therefore, only be necessary to give a statement of the points made in argument, and the authorities cited in support of them.

Decree affirmed.

Randolph, Call, Leigh and Stanard, for the appellant.

Johnson, for the appellee.

It was contended on the part of the appellant:

1. That Garland's debt was valid, and being assigned to Wingfield and Coleman, they occupied Garland's place, and paid valuable consideration for the mortgage on the land, by giving up Garland's note, to Lewis Nicholas. The subsequent sale under the deed of trust was open and fair and Wingfield and Coleman became the purchasers to the amount of their assigned claim.

2. The claim of Rives was usurious, and the judgment at law was no bar to an investigation of that claim in equity, because Garland was not a party to the suit at law. Besides, Rives is plaintiff in equity, and comes to enforce a judgment at law; in which case, the Court will not grant relief, unless ex aequo et bono, he ought to have it. 2 Madd. 408. Coop. Eq. Pl. 99. Morgan v. , 1 Atk. 408. Johnson v. NorthyBern. 409. Baker v. Child. Ib. 226. Galbraith v. Nevil, 1 Doug. 5. Maze v. Hamilton, Call's MS. Rep. Wilson C. Nicholas's deposition ought to be received, because here there was an actual release, which distinguishes this case from that of Taylor v. Beck, 3 316.

3. The conveyance to Wingfield and Coleman, and the subsequent purchase by them under the sale, were not only on valuable consideration, but they were bona fide. They were free from all the badges of fraud mentioned in Twyne's case.

4. But, admitting that the transaction was fraudulent as to Lewis Nicholas, and Wingfield and Coleman, still the deed to Garland cannot be impeached.

Upon general principles of equity, whoever goes into a Court of Equity for relief, must do equity before he can obtain it. A plaintiff in equity is always required to perform this condition; especially where the defendant is fortified with the legal estate. That Garland was a fair creditor, is unquestionable. He has obtained the legal estate; and Rives, another creditor, having no better claims, seeks to displace Garland. Will a Court of Equity sanction such an attempt? Certainly not. They will only exercise their accustomed jurisdiction, in giving satisfaction to Garland first, and to Rives afterwards, if any surplus should remain. It will not avail Rives to say, that the conveyance to Garland was fraudulent, and therefore ought not to be regarded in equity; for, the rule of equity is not founded on the soundness of the legal title, but simply on the fact that the defendant has obtained it. This is proved by Sir John Fagg's case, cited 1 Vern. 52, where the deed was obtained by robbery, and yet the Court of Equity allowed that title to protect the defendant. So, where a judgment is set aside as fraudulent, equity will not relieve, unless a bona fide debt due to the defendant, is first satisfied. The same point is decided in 2 Ch. Cas. 23, cited in Francis's Maxims, 66. Whatever may have been the demerits of Wingfield and Coleman, Garland cannot be accused of any fraudulent design. He could not derive any benefit from the provisions in the deed, which were calculated to secure the property to the other defendants. These were dictated by those who were to receive benefit from them, and Garland was rather the victim than the accomplice of their acts. His only object was to secure a just debt; all beyond this was extorted from him by Wingfield and Coleman.

Notice of the fraud of Wingfield and Coleman, will not render the deed from them to Garland, void. The proviso of the Statute of 13 Eliz. expressly speaks of persons, " not having notice," but our Statute has no such clause; and therefore, no such condition is necessary, to exempt a party from the operation of the Statute. The case of Wilson v. Wormal, Godb. 161, cited in Twyne's case, and in 13 Vin. Arb. 521, is no authority in this case, because the Court were divided, and it was a case where there was a trust for the grantor. But, Barwell v. Ward, 1 Atk. 260, is in favor of the appellant; for the property was permitted to stand as a security for what was justly due. A deed fraudulent at law in part, will not be totally set aside in equity. Taylor v. Blantern, Gilm. 209. Murray v. Riggs, 15 Johns. 571. A Court of Chancery cannot be called on to enforce actively the penal sanctions of a Statute. The case of usury is an illustration of this principle. Smith v., 1 Prec. in Ch. 80. The cases where the opposite principle prevails, are such as have one or more of these features; 1. Where the conveyance is purely voluntary; 2. Where there is a trust for the debtor, as in Twyne's case; or, 3. Where the deed is covinous in its concoction, as in Sands v. Codwise. There, the whole deed was made subservient to the fraudulent design; 4. Where value is given, but it controuls the superior right of the party complaining; as where there has been a sequestration in a Court of Equity, a purchase by a creditor would be void. The cases of Hill v. Claiborne, 1 Wash. (VA) 185. Wright v. Hancock, 3 Munf. 521; and Bullock v. Irvine, 4 Munf. 450, may be referred to this principle.

For the appellee, it was said, that the Court could not re-examine the question of usury, which had been fully tried at law, and must therefore be conclusive on all other Courts. All Lewis Nicholas's property was completely vested in the Sheriff, whether it was mentioned in the schedule or not: and Rives comes into a Court of equity, only to remove the obstructions to the legal title. He only wishes to assist the judgment at law. Under these circumstances, it would be a departure from the main object of the suit, to make enquiry into the foundation of the original judgment. The passage from Coop. Eq. Pl. 99, founded on the case of Morgan v. 1 Atk. 408, which has been cited, does not afford any support to the position taken on the other side. That case depended on something peculiar in the Court of Wales; and in Walker v. Wilter, Doug. 5, and note 2, to the same case, it is said by Lord Mansfield, that the decisions of the Court of Wales were clearly examinable; resting the whole force of that case, on some peculiarity in that Court. It was considered as a foreign Court. As to the case of Baker v. ChildVern. 226, it merely proves, that a Court will look into their own decrees, when interlocutory; but, they will not examine new evidence. The case of Johnson v. NorthyVern. 409, proves this distinction. The case of Maze v. Hamilton, Call's MS. Rep. does not decide this point. The Court of Appeals did not correct the judgment of the General Court; but, they interpreted that judgment differently from the Chancellor. They, in fact, executed the judgment of the General Court, according to its legal import The case in 1 Equ. Cas. Abr. M. p. 82, 83, and Scott v. NisbettBro. Ch. Rep. sustain the position. But, this is a case, where the very question has been fully tried, and decided at law. It is not the case of a fraudulent judgment, or one which is a security for an usurious contract. The cases in which a judgment is conclusive, or not, may be found in 1 Phill. Evid. 223, 226, and Moses v. M'FarlaneBurr. 1009.

(Call, here interrupted Johnson, and said, that the judgment was not an estoppel, unless it was on the very point; and that Rives had let loose the estoppel, by relying upon other matter. A Court of Law will take no notice of a decree in equity; and e converso, a Court of Equity will not respect a judgment at law. Hooe v. Pierce, 1 Wash. (VA) 212, shews, that the decree of a domestic Court of Admiralty is not conclusive upon persons not parties to the suit.)

To these observations, it was replied, that it was true the estoppel must cover the very point, but that point need not be stated in the judgment. If this were not true, the action of indebitatus assumpsit would be of very little value. In that action, the issue includes many subjects, some of which may be found by the verdict, others not. The judgment does not shew which subjects are recovered and which omitted. The only way then to give the judgment any validity, as a bar to any future action, is to prove by the verdict, to what subjects the judgment applies. Seddon v. Tutop, 6 Term Rep. 607. The estoppel is not let loose. Rives does not put usury in issue in the bill; but mentions it as a matter of history, to shew the fraudulent nature of the transaction.

But, if we are at liberty to question the judgment of the Court of Albemarle, what is the ground? That Wilson C. Nicholas's deposition was rejected. But this is a question, not for a Court of Equity, but a Court of Law. The point was excepted to, and there could be no reason for not deciding it at law. Taylor v. Beck, 3 316, is conclusive on this point; because W. C. Nicholas, was a joint defendant with Lewis Nicholas.

But, if all the evidence was admitted, it would prove, that Rives's claim was not usurious; and, even if it were, Rives must receive his principal, with lawful interest.

These preliminary objections being removed, the main question comes on, whether the transaction was fraudulent and void. This question is a mixed question of fact and law.

As to the fact, there is express evidence of fraud intended by L....