Hogg v. McGuffix.

• Decision Date: 25 February 1913
• Court: West Virginia Supreme Court
• Parties: Hogg v. McGuffix.

72 W.Va. 86

Hogg

v.McGuffix.

Supreme Court of Appeals of West Virginia.

Submitted September 7, 1911.

Decided February 25, 1913.

1. Judgment Conclusiveness-Persons Concluded.

In a suit between the debtor and one claiming an equity in a certain portion of a fund deposited by the debtor with a third person, a decree in favor of the claimant is conclusive against the debtor's creditors who are claiming only liens upon such fund, and can not be collaterally assailed by them in any event, nor directly except for fraud and collusion. (p. 88).

2. Same.

If the stakeholder is a party to such suit, and has been directed by a decree of the court to turn over to the claimant the portion of the fund found to be his, he can not refuse to do so on the ground that, after the suit was brought, he was garnished by creditors and debtors. (p. 89).

3. Courts Conflicting Jurisdiction Courts of Same State.

The circuit court in which the claimant brought his suit, to which the stakeholder is a party, can not be ousted of its jurisdiction by the subsequent order of another circuit court which acquired jurisdiction over the stakeholder in suits brought by the creditors against the debtor. (p. 89).

Appeal from Circuit Court, Mercer County.

Suit in equity by Gory Hogg against R. M. McGuffin and others. From a decree for plaintiff, defendant Citizens' National Bank of Charleston, trustee, etc., appeals.

Affirmed.

Mollohan, McCUntie & Mathews, Geo. S. Wallace, and Charles 11. Jones, for appellant.

Hubard & Lee and A. W. Reynolds, for appellee.

Williams, Judge:

After the case of Hogg v. McGuffin, 67 W. Va. 456, was decided by this Court, Gory Hogg filed his amended or supplemental bill in the circuit court of Mercer county, setting up the fact that the money had been collected by the Citizens National Bank of Charleston, on the Dixon notes payable to McGuffin, which had been deposited, with it for collection in the manner and according to the agreement described in the former opinion in this cause, and prayed for a decree against the bank, directing it to pay to him the sum of $16,620, with interest, in discharge of the decree rendered in his favor by this Court. Thereupon the bank and M. M. Williamson, trustees, tendered their answer, and cross-bill in the nature of a bill of interpleader, setting up the fact that a number of the creditors of McGuffin had obtained judgments and executions before the rendition of the

decree by this Court in favor of Hogg, alleging that it had been garnished by a number of said creditors, whose debts are set out in the cross-bill, and prayed that they might be brought into the suit, and required to litigate with Hogg their respective claims of priority to the fund, to the end that the bank, as trustee and stakeholder, might be protected in the disbursement of said funds. Plaintiff objected to the filing of so much of the answer as was intended as a cross-bill and called for affirmative relief, and the court sustained the objection, but allowed the paper to be fded simply as an answer to the bill, and heard the cause on amended bill, answer and general replication thereto, and decreed, that the bank pay to Hogg the sum above stated. From that decree the Citizens National Bank and M. M. Williamson obtained this appeal.

The bank in its answer admits that it has in its hands $58,111.-28 collected on the Dixon notes payable to McGuffin. It was a party to Hogg's original bill, and, therefore, knew that Hogg's equitable claim to a part of the funds in its hands was superior to the liens upon such part, claimed by any of McGuffin's creditors. The decree of this Court determined that fact. Hogg was not claiming the right simply to charge the fund with a debt; he was claiming the fund itself, or rather so much of it as was derived, from the sale by McGuffin to Dixon of fifty shares of stock in the Harvey Coal & Coke Company; and the court decreed that $16,620 of the fund belonged, to Hogg, by virtue of his contract with McGuffin, giving him the right, for two years from the time he had purchased from McGuffin the fifty shares of stock in the Pike Collieries Company, to return those shares and receive from McGuffin a like number of shares in the Harvey Coal & Coke Company in lieu thereof. Hogg decided within the two years to make the exchange of stock, but McGuffin had in the meantime sold it to S. Dixon, an innocent purchaser, without notice of Hogg's equity, and the court could, not decree specific performance of McGuffin's contract, but held that Hogg had an equitable claim to the fund derived from the sale of the stock, and could follow it up. The funds were then in the form of notes payable to McGuffin, in the hands of the bank for collection; they had not passed into the hands of an innocent holder for value, and out of Hogg's reach. The notes were still McGuffin's property, in the hands of the bank, at the time Hogg brought his suit in Mercer county and made the bank a party to it. Hogg's title to $16,620 of the fund while only an equitable one, was superior to McGuffin's, and, being superior to the debtor's title, his creditors could acquire no liens upon it. It is a familiar principle of law that the creditor can acquire no greater right in respect to the debtor's property than the debtor himself has. The former decision, in effect, held that McGullin sold stock in the Harvey Coal & Coke Company which virtually belonged to Hogg, and that he was bound to turn over to Hogg the proceeds thereof. Hogg's right Avas a property right, and was necessarily superior to any lien that a creditor of McGufhu could acquire on the funds. Hogg's right was to tire stock itself, from which the fund was derived, and no liens were acquired before the stock was sold; all the liens averred in the cross-bill to exist were acquired after that time. The bank would have taken no risk in turning over to Hogg his portion of the fund, and it...