Harden v. Wagner
| Decision Date | 03 November 1883 |
| Citation | 22 W.Va. 356 |
| Parties | HARDEN et al. v. WAGNER et als. |
| Court | West Virginia Supreme Court |
Submitted Jun. 7, 1883.
1. A motion to dissolve an injunction made pursuant to previous notice, should not be continued for the parties to take testimony, unless the plaintiff shows that he has testimony to sustain the injunction which he was unable to get before the motion was made; and even then it should not be continued, unless there apepars to be great necessity for so doing. (p. 361.)
2. A receiver should not be appointed to take charge of property conveyed to a trustee to secure debts, in a suit in which the bill is filed to set aside the conveyance as fraudulent, when the motion is heard upon the pleadings and proofs, and it does not appear therefrom that the conveyance is fraudulent. (p. 362.)
3. A trust-deed to secure a note payable one day after date which conveys personal property and, also, choses in action, is not fraudulent because it provides that the trustee should sell the property conveyed on demand by the cestuis que trust or either of them. (p 362.)
4. The statute against fraudulent conveyances--chapter 74, section 1 of Code-- like all other statutes against fraud, is to be liberally expounded for the suppression of the fraud. (p 365.)
5. If such conveyance be actually fraudulent and the intent concurred in by grantee as well as the grantor, it will be void as to creditors, however valuable may have been the consideration paid by, or secured to, the grantee or beneficiary. (p. 365.)
6. A conveyance not fraudulent in its inception cannot become so by matters subsequent; for the statute requires that the act should be done with a criminal intent; still, if it be afterwards employed for a fraudulent purpose, a court of equity will interpose to prevent such use of it. (p. 365.)
7. Until there is a legal lien by judgment or execution fixed upon the debtor's property, he may, though insolvent or in failing circumstances, convey or transfer his estate in trust; and if it be done in good faith, he may thereby prefer one creditor to another without committing fraud, within the statute, upon the creditors who are delayed or hindered by such conveyance. Nor is it an objection that the conveyance defeats all other creditors of their legal remedies, though they be a majority in number and value. (p. 365.)
8. A provision in the conveyance of a stock of goods or other chattels, that the trsutee may continue the business, if intended merely as a means of realizing the trust-fund and with a view of winding up the business, is not fraudulent per se. Nor is a provision in such conveyance, that a grantor shall attend to the business, he being under the control of the trustee who may at any time, on demand of the cestuis que trust, sell the property, fraudulent per se. (p. 366.)
9. The onus probandi is on him who alleges fraud, and if the fraud is not strictly and clearly proved as it is alleged, relief cannot be granted, although the party against whom relief is sought may not have been perfectly clear in his dealings. (p. 366.)
10. But the proposition that " fraud must be proved and not presumed" is to be understood only as affirming that a contract honest and lawful on its face must be treated as such, until it is shown to be otherwise by evidence either positive or circumstantial. (p. 366.)
11. A party, who sells to the grantor in a deed, conveying horses to secure a debt, while the grantor is in charge of the horses as the agent of the trustee, grain and feed for their support on the credit of the trust-property, and the trustee has notice of such sale but refuses to give a written order for the feed, is entitled to be paid for said grain and feed out of the trust-fund, the deed being valid and said feed necessary for the support of said horses. Such debt is a part of the expenses of the trust and entitled to be paid as such. (p. 370.)
12. When a trust-deed of personal property is set aside by the circuit court and a sale of the property made and confirmed by it, without objection to the sale in that court. HELD:
That such sale can not be set aside, although on appeal the Appellate Court reverses the order directing the sale and holds that such trust-deed was erroneously set aside. (p 371.)
SNYDER, JUDGE, furnishes the following statement of the case:
C. E Wagner, a resident of the City of Wheeling, Ohio county, and in business there as the keeper of a livery stable on leased premises, by deed, duly acknowledged, dated June 16, 1881, and recorded in said county June 18, 1881, conveyed to Guy R. C. Allen, trustee, all his livery stock, consisting of horses, buggies, hacks, wabons, harness, & c., together with his unexpired lease of the stable, and also his household and kitchen furniture, in trust to secure the payment of eleven thousand five hundred dollars due from him to Thornton Pickenpaugh and William Wagner, of Morgantown, by bond of same date and payable one day thereafter. The deed mentions and describes specifically the articles of property conveyed, and it also transfers to the trustee " all the accounts, claims and demands due and belonging to the grantor arising or accruing to him from his business, or in anywise due him," and provides that, " upon demand of the said Thornton Pickenpaugh and William Wagner, or either of them, the grantee shall proceed to sell the foregoing property at public or private sale, and at retail or wholesale and for cash or upon reasonable credit, as may best promote the interest of the grantor and said Pickenpaugh and William Wagner, and also collect the accounts, claims and demands due to said grantor and apply the same according to law."
On July 13, 1881, said C. E. Wagner and Allen, trustee, executed a writing under seal, which was, on the day of its date, duly acknowledged and admitted to record, in which, after stating that some doubts may hereafter arise as to the authority of the trustee to collect the accounts and claims conveyed by said deed, declares that the true meaning and intent of said deed was to confer upon the trustee, Allen, " power and authority to collect all claims and accounts arising out of, or connected with, the livery business of C. E. Wagner which were due at the time of its execution, or which might thereafter, in the conduct of the buisness, become due and apply the same to the payment of the debts secured in said deed," and it then provides, that if a true construction of said deed does not confer such authority upon the trustee, he is by said writing now empowered to take posession of, collect and apply said claims and accounts to the payment of the trust-debt.
At the time of making said trust-deed C. E. Wagner was indebted to A. S. Harden, Hook, Schrader & Co. and Donaldson & Co. by notes or accounts. And after the recordation of said deed said parties instituted their several actions and recovered judgments for their respective debts against said Wagner, and on December 24, 1881, and January 13, 1882, executions were issued on said judgments and abstracts thereof recorded as liens in the clerk's office of the county court of Ohio county.
On January 14, 1882, the said judgment and execution creditors, suing on behalf of themselves and all other creditors of C. E. Wagner, brought this suit in the circuit court of said county to have said trust-deed and writing declared fradulent and set aside as to them, and to subject the property in said deed mentioned to the payment of their debts; or, if the said deed and writing should not be set aside in toto, then to have an account taken of the indebtedness secured thereby, which is bona fide due, and the proceeds of the property distributed as the rights of the parties may require. The bill prays for an injunction to restrain the said C. E. Wagner and Allen, trustee, from selling or disposing of said property or collecting said claims, and for the appointment of a receiver to take possession of the same and collect said claims, and for general relief. The bill was sworn to, and on the same day an injunction was granted. The grantor, trustee, and beneficiaries in the deed were made defendants and, on January 21, 1882, they filed their several answers, and pursuant to notice, previously given, moved for a dissolution of the injunction. The plaintiffs at the same time moved for the appointment of a receiver. The courts continued both motions to enable the parties to take testimony. On March 1, 1882, the parties appeared before the judge in vacation and said motions being fully heard upon the bill, answers, replications, exhibits and depositions, the motion to dissolve the injunction was overruled, and the motion of the plaintiffs sustained and a receiver appointed to take possession of the property and carry on the livery business therewith, and collect all claims and accounts, pay the proper expenses of conducting the business out of same, and make and file with the clerk of the court an inventory of the property taken possession of by him. He was also required to give bond as such receiver and report his proceedings to court. The receiver gave bond, took possession of the property and claims, carried on the business and made a report to court.
The cause was again heard, on May, 3, 1882, the report of the receiver confirmed, and the court being of opinion that the trust-deed of June 16, 1881, was made with intent to delay hinder and defraud the creditors of C. E. Wagner, set the same aside as to the plaintiffs and other creditors. The cause was then referred to a commissioner to take and report an account of the liens on the property in the hands of a receiver and all other debts against C. E. Wagner. The receiver was directed to sell the property at public auction, after giving...
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