In re McIntire

• Decision Date: 03 January 1906
• Citation: 142 F. 593
• Parties: In re McINTIRE.
• Court: U.S. Court of Appeals — Fourth Circuit

142 F. 593

In re McINTIRE.

United States District Court, N.D. West Virginia.

January 3, 1906

F. H McGregor, for petitioner.

A. G Patton, for respondents.

On February 3, 1900, J. Jackson andJ. M. Jackson, Jr., the owners, leased the Hotel Monroe, in Parkersburg, W. Va., to S. H. Biddle for a term of five years, beginning March 1 1900, and terminating February 28, 1905. One of the stipulations of this lease prohibited Biddle from assigning transferring, underletting to, or taking into partnership any other without the consent of the Jacksons, their heirs, or representatives in writing. On July 1, 1901, a modification was made in writing, fixing the rent payable at $180 per month from July 1, 1901, to February 28, 1902, after which date such rent was to be $200 per month for the remainder of the term. On January 15, 1902, Biddle assigned this lease to J. W. Depue, with the written consent of the Jacksons. On January 10, 1905, Depue executed six negotiable notes, four for $300 each, payable in three, four, six, and eight months, one for $392.90, payable in ten months, and the sixth for $1,482.10, payable in four months. All these notes were accommodation ones, payable to R. M. Clendenning, and indorsed by him; and to secure and save him harmless Depue executed the same day a deed of trust to D. C. Casto, trustee, upon the furniture in said Hotel Monroe, providing in said trust that, in case he made default in the payment of said notes and in protecting Clendenning from liability therefor, then sale should be made of said furniture and personal property, upon request of Clendenning or any holder of all or any one of said notes. On March 8, 1905, Depue by bill of sale, in consideration of real estate, conveyed to him, situate in Parkersburg, W. Va., and Columbus, Ohio, sold said furniture and fixtures in said Hotel Monroe to Herman Fouse, agreeing to surrender to the latter 'the said business and its patronage' and 'to relieve said property from all bills and liabilities at the time outstanding. ' On March 11, 1905, Depue executed to Casto, trustee, another deed of trust upon the Parkersburg property derived by him by the conveyance of March 8, 1905, by Hughes and wife at the instance of Fouse and in part payment of the latter's purchase price for the furniture and hotel business, to secure Clendenning harmless and the payment of the same six notes secured by his former trust deed of January 10, 1905, upon the furniture itself. On March 16, 1905, Fouse, by bill of sale, transferred to L. H. McIntire all of said furniture and fixtures in said hotel derived by him from Depue in consideration of $5,000, for which McIntire executed two $500 negotiable notes, payable in six and twelve months, and four for $1,000 each, payable in two, three, four, and five years from that date, with interest, and on the same day, and to secure these notes, McIntire executed a deed of trust to Casto, trustee, upon the same furniture and fixtures. Thereupon McIntire took possession of said hotel business, but without written consent of the Jacksons or any further transfer of the lease to him from Depue, although it is admitted that the agent for the Jackson heirs received from him, while in possession, $133.33 upon rent due. in this condition of affairs, proceedings were instituted, and McIntire adjudged bankrupt, and a reference was made to George W. Johnson, referee, by this court.

By two petitions filed May 26, 1905, and June 1, 1905, respectively before said referee, the Jacksons, by their agent, set up the lease held by Depue; that various people were put in charge of the hotel by him, but no assignment of the lease was agreed to by the lessors or their agent; that rent to the amount of $2,066.67 was in arrear and distress warrant had been sued out and levied upon the furniture and fixtures in the hotel therefor; that McIntire had listed such furniture and fixtures as assets of his in the bankruptcy proceeding; and that such claim for rent in arrear was a lien upon such personal property first payable in full before all others. On June 5, 1905, the said Herman Fouse filed his specification and claim for $5,010, the amount of principal and interest due upon his six notes of McIntire's, and claiming a first lien upon said furniture and personal property by reason of his deed of trust from McIntire. On June 9, 1905, R. M. Clendenning filed his claim for the sum of $3,075, by reason of the six accommodation notes made by Depue to him, and claiming a first lien upon said furniture by virtue of Depue's deed of trust to Casto in his favor. Meanwhile T. J. Helmick had been appointed trustee for said bankrupt, and on June 3, 1905, reported a sale of said furniture as having been made for cash for $1,340. On August 2, 1905, Fouse filed his exception and answer to Clendenning's proof of claim, in which he alleges that, when he purchased said furniture from Depue, he paid full value by the conveyance of real estate; that Depue agreed to relieve it of all liabilities; that Clendenning at the time agreed to release his deed of trust upon it and did sign such release, but it was not recorded; that Clendenning's lien was to be, and was, in fact, transferred from this personal property and placed upon the real estate so conveyed to Depue under and by virtue of the deed of trust to Casto, trustee, of date March 11, 1905; that in consequence Clendenning waived and released all his rights under and by virtue of his deed of trust upon such furniture, and he asks said claim as a lien or charge against the proceeds of its sale be disallowed. On the same day he filed his demurrer, answer, and protest to claim and petition of the Jacksons for rent, in which he demurs because the proof of claim is made by the agent for the Jacksons, because the petitions do not allege that the Jacksons have no other security except their supposed lien upon said furniture or its proceeds, and because their claim is against Depue, and not the bankrupt, McIntire. For answer he alleges his purchase from Depue of the furniture; his exchange of real estate worth $5,000 therefor; the recordation of his bill of sale; his sale of the property to the bankrupt, McIntire, by writing recorded; its consideration of $5,000, evidenced by the six notes; the deed of trust executed and recorded to secure them; the taking possession of the hotel and property by McIntire without objection from the Jacksons; the acceptance of $133.33 rent by them from him; that his deed of trust debt is in the nature of a vendors lien upon said furniture; and asks that it be ordered paid first out of the proceeds of its sale to the extent of such proceeds, and protests against the application thereof to the Jacksons' rent demand. On August 3, 1905,...