Herold et al. v.Barlo
| Decision Date | 07 April 1900 |
| Citation | 47 W.Va. 750 |
| Parties | Herold et al. v. Barlo |
| Court | West Virginia Supreme Court |
A conveyance, in consideration of an antecedent debt, from an insolvent to his creditor, without fraudulent intent in the creditor, though the creditor know of the debtor's insolvency, does not, alone, stamp the conveyance as one fraudulent in fact and utterly void; but it stands for the benefit of all creditors, including, the one thus preferred, (p. 754).
A conveyance by an insolvent debtor so a dona fide grantee, for valuable consideration, not a debt, is valid, and not subject to be held a preference under Code 1891, chapter 74, section 2; and if the consideration is part cash, and part an antecedent debt due from the insolvent to the purchaser, the conveyance will be held as a preference inuring to the benefit of all creditors of the insolvent, beyond the cash payment; but the purchaser will be preferred, to the extent of such prior liens on the property, he will be substituted to such cash payment over general creditors, (p. 754)
In a conveyance by an insolvent debtor, operating, under Code 1891, chapter 74, section 2, as a preference, and standing for the benefit of all creditors, if the purchaser discharge liens, and accorded their priority, (p. 755).
In a conveyance by an insolvent debtor, operating, under Code 1891, chapter 74, section 2, as a preference, and standing for the benefit of all creditors, if the purchaser pays off debts of the insolvent, at his request, as part of the consideration, though such debts are not liens, they will be treated as if cash paid by the purchaser, and he will have preference therefor over other general creditors, (p. 762).
A suit to overthrow a conveyance made prior to February 20, 1895, as a preference prohibited by Code 1891, chapter 71, section 2, will be barred by laches, unless excused. In this instance, the conveyance being on record, a delay of four years and four months was held to bar such suit. If such a conveyance since that date, suit must be brought within one year from its date, and, i1 recorded within eight months after its date, the suit must be within four months after such recordation, under chapter 4, Acts 1895. (p. 763).
Appeal from Circuit Court, Pocahontas County.
Bill by Andrew Herold and ethers against Amos Barlow and others. Decree for plaintiffs, and defendant, Amos Barlow, appeals.
Reversed.
Brown, Jackson & Knight, for appellant. H. S. Rucker, for appellees.
On the 19th of September, 1891, and for a considerable time prior thereto, Horace M. Lockridge was engaged in the business of a real-estate agent, and buying and selling lots, at a town called "Buena Vista," in Virginia. Buena Vista is what is known as a "boom town," where lots at one time sold at fabulous prices, and then collapsed and fell to nominal prices, or became wholly unsalable. Lockridge had been raised in Pocahontas County, in this State, and went from there to Buena Vista, where he resided, and engaged in the business just stated. He dealt largely in lots at that place; bought and sold a great many; carrying on transactions quite large; handling a great deal of property. In addition to the real-estate business, he carried on a retail store. He became largely indebted to wholesale merchants for goods purchased for that store, and for purchase money on lots in Buena Vista. He owed bank notes in West Virginia. He owed divers people in the county of Pocahontas. He was very largely indebted on the 19th of September, 1891. Prior to that date judgments had been rendered against him in Pocahontas, which he could not pay. One of these judgment creditors (Sharp), if not others, was pressing him for payment; threatening him with chancery proceedings in Pocahontas to sell a valuable tract of land owned by him in that county. He owed also in that county a good many other debts, not yet carried into judgment. He owned two other parcels of real estate of smaller value, in Pocahontas; having liens resting thereon for purchase money. He owned the store in Buena Vista, worth about three thousand dollars. He owned a very considerable number of lots in Buena Vista, bought at high prices. Lots in that boom town had been, up to 1891, commanding high prices; but at some time prior to September 19, 1891, the boom or inflated prices of those lots suffered serious decline, and finally collapsed. Just when this decline began, the evidence does not distinctly say; but it is fair to sav that it began prior to September 19, 1891, and that on that date lots had already suffered very serious decline, and were then of slow sale at prices greatly reduced from their cost, practically unsalable at thai; date. Lockridge states that he had in his various transactions in real estate prior thereto made a great deal of money, but that he had reinvested it in numerous lots, and that the collapse in prices caught him with them on hand, and thus ruined him, and the lots were sold from him for unpaid purchase money. He then owed a large indebtedr ess to parties in West Virginia, Virginia, and considerable in Baltimore. The evidence makes it clear that on the 19th of September, 1891, he was greatly distressed for money; judgments against him threatening his land in Pocahontas County; his Buena Vista lots under liens for unpaid purchase money, which he could not pay; and thus the lots were in certain and imminent danger of being sold under trust deeds made to secure the purchase money. He was already sued in Virginia for debts, and was in imminent danger of further suits there. His creditors were clamorous and uneasy. He was surely insolvent on the 19th of September, 1891. It is useless to detail evidence under this head. It would be a mere detail of mere evidence, illustrating no legal principle, and I will not detail the volume of circumstances touching his insolvency. He states under oath that he was then insolvent, but; it aoes not need his admission to show such to be the fact. The great number and volume of his debts, and the transparent fact that his property would not pay them, as so much was unsalable and unavailable, and soon came to nothing, as he states, coupled with the fact that he soon transferred his store to his wife, and that his lots were sold away from him for purchase money, these facts and many other circumstances tell too plainly of his financial collapse. His insolvency is not a probability, but a, strong probability, a certainty. When he sold his farm in Poca hontas, the debts appeared large, those in West Virginia, and the Virginia and Baltimore debts were large; and his Virginia lots were utterly inadequate to pay them, and those debts remain yet unpaid. All these circumstances existing on the 19th of September, 1891, and revealed by subsequent events given in evidence, show beyond question that Lockridge was inso vent, in a legal sense, on that elate; that is, all his property was not then adequate to pay all his debts. He was not only insolvent in the sense of the bankrupt law, on account of his failure and utter inability to meet his obligations in due course of maturity, but he was insolvent within the meaning of our statute against preferences; that is, all his property would not pay all his debts. Wcigand v. Supply Co. 44 W. V. 133, (28 S. E. 803). By deed dated September 19, 1891., Lockridge conveyed to Amos Barlow and Henry Barlow the said valuable tract of land in Pocahontas County for the consideration of.twelve thousand dollars, as stated in the deed, but which was in fact eleven thousand dollars, as all admit. This consideration was paid partly in antecedent debts due from Lockridge to the Barlows. It was partly paid by the transfer to Lockridge's wife of three thousand five hundred dollars of stock of a corporation doing a real estate business at Buena Vista, called the Pocahontas and Greenbrier Investment Company, of which Amos Barlow and his wife owned two thousand five hundred dollars, and C. R. Moore, a son-in-law of Amos Barlow, owned one thousand dollars. As further payment, the Barlows discharged various liens recorded and binding the said land, and they also paid a very considerable amount of other debts against Lockridge, at his request, and they paid him cash two hundred and one dollars, and some taxes on the land; and for the balance, of one thousand one hundred and twenty-nine dollars and twenty-nine cents, Amos Barlow gave to the wife of Lockridge a check on a bank. The said deed from Lockridge to the Barlows named Lockridge and his wife and his mother (the last owning a dower right in the land) as grantors. It was acknowledged and executed by Lockridge and his mother on its date, and recorded September 21, 1891. That deed was not executed by the wife of Lockridge, but this was cured bv another deed, dated September 22, 1891, executed and acknowledged in Virginia; she being there, and not in Pocahontas County, where the former deed was executed. On the 6th of January, 1896, Andrew Herold attacked this conveyance by a bill in equity in the circuit court of Pocahontas County, claiming that the said conveyance from Lockridge to the Barlows was made with the purpose and intent to hinder, delay, and defraud the creditors of Lockridge, and, if not made with such purpose and intent in the mind," it was made when Lockridge was insolvent, and that said conveyance should, under that provision of Code 1891, chapter 74, section 2, forbidding a preference of creditors, be held to be for the common benefit of all the creditors of Lockridge. Herold's bill states that he was Lockridge's indorser on certain notes, and that Mathews, as their holder, had obtained judgments on the same for upwards of nine hundred...
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