Hines v. Fulton
| Decision Date | 29 November 1927 |
| Docket Number | 5957. |
| Parties | HINES v. FULTON et al. |
| Court | West Virginia Supreme Court |
Submitted November 15, 1927.
Syllabus by the Court.
The assignor of a judgment or decree by the assignment deprives himself of all interest in and control over it, and transfers to the assignee the ownership of the judgment and all remedies thereunder.
A judgment debtor after knowledge of the assignment of the judgment, cannot compromise the debt with the assignor alone, and thus defeat the claim of the assignee.
The assignment of a judgment or decree carries with it also the right to the lien created by any and all attachments sued out and levied upon all lands or other property, with the right also to enforce such attachments whether they be specifically mentioned in the instrument of writing or not.
Such an attachment when levied on the property, and particularly after it has been carried into a decree, constitutes a lien upon the property attached, of which all persons dealing with the property with notice are chargeable. Such a proceeding by attachment partakes somewhat in its nature both of a proceeding in rem and of one in personam.
An attempted settlement between the debtor and creditor of such an assigned claim, after the assignment, without the knowledge or consent of the assignee, and the payment of the amount agreed upon to the assignor, constitutes actual fraud upon the assignee and his rights, and the collusive procurement of a decree or entry of satisfaction upon the record of the judgment or decree will at the suit of the assignee be set aside, and the suit prosecuted in the name of the assignee for his benefit whether the judgment or decree be in rem or in personam or both.
In this state a suit to set aside a fraudulent conveyance, transfer or assignment of property and to charge it with a debt, creates an equitable lien upon the property so proceeded against in favor of the plaintiff.
The rule of the common law against partial assignments of claims for the protection of debtors against the splitting of claims against him is without substantial application when all parties in interest are before the court, and their rights can all be there settled.
After notice to the debtor of a bona fide transfer of a judgment or decree against him, the rights of the assignee will be protected in equity from any and all acts of the original parties, and the entry of satisfaction on the record by the judgment creditor will at the suit of the assignee be set aside as fraudulent, and the court may order the suit proceeded with for the benefit of the assignee.
Where the claim of such assignor, carried into decree in rem against the property attached after assignment, has been thereafter fraudulently compromised between debtor and creditor for a sum greatly below the amount decreed in rem against the property, and the sum agreed upon fraudulently paid over to the assignor, the amount to which the assignee is entitled may in his suit to set aside the collusive decree be corrected by the record of the original decree in the cause, and decreed accordingly.
Appeal from Circuit Court, Braxton County.
Action by Cary C. Hines, administrator of William Crennell deceased, against Elwood D. Fulton and others. From a decree for plaintiff for less than he asked, he appeals, and defendants the Baltimore & Ohio Railroad Company and the Gauley Company cross-assign error. Modified and affirmed.
W. E R. Byrne, of Charleston, Thomas Watson, of Pittsburgh, Pa and H. L. Robinson, of Clarksburg, for appellant.
Haymond & Fox, of Sutton, and Bryan, Williams & Cave, of St. Louis, Mo., for appellees Baltimore & O. R. Co. and Gauley Co.
This case was formerly before us upon an appeal by the plaintiff from the decree below sustaining the defendant's demurrer to the original and amended and supplemental bill, reported in 92 W.Va. 204, 114 S.E. 684, and on which appeal we reversed the decree below, overruled the demurrer and remanded the cause for further proceedings.
The present appeal was also allowed upon the petition of the plaintiff from the final decree of the circuit court on July 21, 1926, which brought the case on to be heard on the plaintiff's bill and amended and supplemental bill; the answer of the Baltimore & Ohio Railroad Company and Gauley Company, corporations; the plaintiff's general replication thereto; the joint and several answers of John T. Davis, Arthur Lee, Davis Elkins, C. M. Henley and Davis Trust Company, executors of the last will and testament of Henry G. Davis, deceased; Davis Elkins, Stephen B. Elkins, Jr., and Davis Trust Company, a corporation, executors of the last will and testament of Stephen B. Elkins, deceased; plaintiff's general replication thereto; upon the order of publication duly published and posted as to defendants Elwood D. Fulton, George J. Gould, William E. Guy, Joseph Ramsey, Jr., J. T. Blair, Union Trust Company of Pittsburgh, a corporation, St. Louis Union Trust Company, a corporation, Pittsburgh & Lake Erie Railroad Company, a corporation, and Pennsylvania Company, a corporation; upon exhibits and depositions filed; the mandate of the Supreme Court of Appeals of West Virginia herein; upon former orders and decrees herein; and upon argument of counsel.
And whereon it was found that on the 2d day of April, 1917, the plaintiff's intestate, William Crennell, Jr., had obtained a decree in the court of common pleas of Fayette county, Pennsylvania, against the defendant Elwood D. Fulton for the sum of $142,819.55, as of May 1, 1916, which was affirmed by the Supreme Court of Pennsylvania on July 31 1918; and wherein also it was further found and decreed that on December 2, 1908, in a suit pending in the circuit court of Braxton county in which the said Fulton was plaintiff and Joseph Ramsey and others were defendants, begun by attachments levied upon said lands of the said defendants therein, obtained a decree in rem for the sum of $367,266.18, with interest from date and costs, and that thereafter on February 18, 1910, the said Fulton, plaintiff in said suit, had executed and delivered to said William Crennell the paper which is the basis of the present suit whereby he assigned the said Crennell so much of the moneys claimed by him in said suit against Joseph Ramsey and others as might be sufficient to satisfy any decree that might be pronounced in his favor in either of the two suits mentioned therein, namely, the suit in the court of common pleas of Fayette county, Pennsylvania, or in his suit in the circuit court of Braxton county founded on the same cause of action, in which Crennell was plaintiff and Fulton was defendant; and thereby authorized and directed the application of any money that might be recovered by him or to which he was entitled in the said suit against Joseph Ramsey and others toward the satisfaction in whole or in part of any decree which might be obtained by the said Crennell; notice of which assignment, it was further decreed, had been given to the other defendants in said suit and to the owners of the land bound by the attachments levied thereon; and further finding and decreeing that the said Fulton without the knowledge of the said Crennell had made a settlement with the Little Kanawha Syndicate, the owners of the land subject to the lien of said attachments, by which Fulton had agreed to dismiss his said suit against Ramsey and others and to release the lien of said attachments for the sum of $122,500.00, of which sum $85,000.00 was paid to the said Fulton and $37,500.00 to his attorney, W. E. Haymond, and that on the 24th day of June, 1912, at a special term of said court without notice to the said Crennell and without his knowledge, a decree was entered dismissing said suit of Fulton against Ramsey and others, and releasing the lands therein attached from the lien of said attachments; and further that the Little Kanawha Syndicate managers and Elwood D. Fulton had on the 24th day of June, 1912, by compromise agreement reached between them had made a settlement of the matters in dispute between them, and that on the 24th day of June, 1912, at a special term of the court, likewise without notice to Crennell and without his knowledge, they had procured a decree carrying into effect said compromise agreement, whereby said suit of Fulton against Ramsey and others was dismissed, also releasing the land therein attached from the lien of said attachments; and further finding that pursuant thereto said agreement and decree had been paid by the Syndicate managers at the time of said settlement in the city of New York to the said Elwood D. Fulton $85,000.00 and to his counsel $37,500.00; but adjudging furthermore that the said Syndicate managers in the making of said settlement were within their rights and were without fraud as against the said Crennell, but that under the construction of said writing of February 18, 1910, by which Fulton had assigned sufficient amount of his claim against said Syndicate to the said Crennell to satisfy Crennell's claim against him, of which they all had notice, said payment by them to said Fulton of $85,000.00 was not warranted and constituted a fraud upon the rights of the said Crennell, and that the said payment should have awaited the termination of the litigation between Crennell and Fulton and until a final judgment was rendered in favor of Crennell against Fulton in the Pennsylvania courts, which on the 31st day of July, 1918, amounted to the sum of $142,819.55, with interest, etc. And the court by the said decree adjudged and decreed that upon this basis there should be in the hands of the managers of the Little Kanawha Syndicate as of the date thereof the sum of $125,644.16, as...
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