Kuhn v. Mack

• Decision Date: 31 January 1870
• Citation: 4 W.Va. 186
• Court: West Virginia Supreme Court
• Parties: Kuhn, Netter & Co. v. Mack & Brothers.

4 W.Va. 186

Kuhn, Netter & Co.

v.Mack & Brothers.

Supreme Court of Appeals of West Virginia.

January Term, 1870.

1. It is not error to hear and determine a chancery cause, if it is ready for hearing, although not formally set for hearing as to all the parties, no objection being made for that reason.

2. A bill may be dismissed at the same term that the injunction is dissolved, if the cause is heard upon its merits.

3. If the court pronounces an erroneous decree in relation to the interest of parties who are not in court, that does not prejudice parties who are in the suit, it is not matter of which the latter can complain.

4. The trustee or cestui que trust cannot go into a court of equity to enjoin a sale of trust effects under an execution issued and levied by virtue of a subsequently acquired judgment, there being a complete and adequate remedy at law.

5. A reservation to the grantor in a trust deed conveying personal property, which is inconsistent with the object of the trust and adequate to the defeat thereof, is null and void as to creditors.

William H. Busch, being largely indebted to Mack & Bros., on the 26th day of November, 1866, executed to one P. L. Wilson, a deed conveying a leasehold estate claimed by him in a store-room in Parkersburg, occupied by him as a clothing store, and also certain rooms occupied and used by him as working rooms for making up clothing, together with the counters, shelves, and fixtures of said store-room, the sewing machines and tailors' implements in the room, and all cloth goods, wares, merchandise, and stock then in the store-room, or that might be placed therein in renewal of stock, in trust to secure the payment of several debts due Kuhn, better & Co., Hull & Flanagan, J. E. & T. S. Phillips, and Marcus, Fichheimer & Co. A further provision stipulated that if there was a failure to pay off the debts in one year from date, or if Busch attempted to remove the goods," except such part of said stock as may be sold in the regular course of his business," &c., that the trustee might enter and sell, &c. The deed was duly acknowledged by Busch, and admitted to record on the 27th day of November, 1866. Subsequently to this Mack & Brothers obtained a judgment, in the circuit court of Wood county, against Busch, for a debt amounting to 2, 888 dollars and 93 cents, with interests and costs; upon which they afterwards, to wit: on the the 9th day of May, 1867, caused an execution of fieri facias to issue, which was levied by the sheriff upon the stock of goods, &c, which had been thus previously conveyed to secure the debts due Kuhn, better & Co., &c. The latter firm and the other trust creditors filed a bill in the circuit court of Wood county, in June, 1867, setting up their deed of trust and the rights acquired by them, and stating the ruinous sacrifice that would follow if the goods should be sold under the unlawful levy that had been made, and praying the court to protect them by an injunction to restrain such sale, and for general relief.

At the September term, 1867, the defendants, Mack & Brothers, answered the bill. They admitted the execution of the trust deed, and that they had caused their execution to be levied upon the property mentioned in the bill. They did not deny the existence or the justness of the debts intended to be secured by the deed, but they charged that the same was made with intent to hinder, delay, and defraud the creditors of Busch, and they relied upon the fact that Busch retained the possession and use of the property conveyed as the evidence thereof.

They also stated that, at the time of the execution of the trust deed, Busch had, by deed dated 23d of November, 1866, conveyed to one Philip Dolmeyer, in trust for the use and benefit of his wife, and to indemnify her for the maiden property which had gone to the use of Busch, estimated to he of the value of 1000 dollars, a lot in the city of Parkersburg, of 30 feet front, and running back 94 feet, and they exhibited a copy of this deed with their answer. They also referred to and exhibited another deed made by Busch to P. L. Wilson, dated the 15th of April, 1867, by which he conveyed certain book accounts omitted in the deed of the 26th of November, 1866, for the same uses and purposes expressed in the last named deed, and these deeds were relied on as evidence of the fraudulent character of the deed of the 26th of November, 1866. They also denied that the goods levied on were the same goods that were on hand when that deed was executed, and charged that they.were other and different goods acquired by Busch, after the assignment made by him to Kuhn, Netter & Co.

On filing this answer, the defendants gave notice of motion to dissolve the injunction. No replication was filed to the answer, nor was the cause at any time set for hearing as to all the parties.

At the April term, 1868, the decree of the court states that the cause came on "to be heard on the bill and exhibits filed therewith, answer of the defendants, with replication thereto, and exhibits filed therewith, and the proofs taken in the cause, and was argued by counsel," and the court pronounced a final decree, declaring that the deed of trust given to secure the complainants, Kuhn, Netter & Co., &c, had been made to hinder and delay creditors, and was, therefore, fraudulent and void. The injunction was also dissolved and the bill dismissed with costs. Leave was given the defendants to withdraw the injunction bond, for the purpose of securing a recovery thereon, to be applied as a credit to the writ of fieri facias of Mack & Bros., and it was further provided that if such recovery should not be sufficient to satisfy the writ of fieri facias and costs of suit, that the property conveyed to Dolmeyer for the benefit of the wife of Busch, should be charged with a lien to the extent of such deficit; and this latter deed was also declared to have been executed with intent to hinder and delay creditors, and was therefore fraudulent and void. All of the parties mentioned in the trust deed were complainants in the cause, and Mack & Bros., and Mattingly, the sheriff of Wood county, were the defendants.

The complainants appealed from the decree, and alleged error as follows:

"1. It was error for the court to hear the cause and pronounce a final decree in the same at the time it did, no replication having ever been put in to the answer nor any disposition taken on behalf of your petitioners, and the cause having never been set for hearing regularly or otherwise.

" 2. If the court could properly have dissolved the injunction (which your petitioners, however, do in no manner admit), it was error for the court to go on at the same time and dismiss your petitioners' bill. It should have stood over until the next term, to give your petitioners opportunity to show cause against such dismission. (Code, ch. 179, § 14.)

"3. It was error for the court to undertake to pass on the deed to Dolmeyer for the benefit of Mrs. Barbara Busch, and to pronounce it fraudulent and void, and to charge the property thereby conveyed with the debt due to the defendants. Neither the said Busch, nor the said Dolmeyer, nor the said Barbara Busch, was a party to the cause.

"4. If the decree had been otherwise right, (which, however, your petitioners do in no manner admit.) it was error for the court to pronounce the deed of trust absolutely void instead of void as to the said defendants in respect of their debt, and thus to deny your petitioners the right to the surplus, after satisfying the defendants' demand to a proper account

" 5. And chiefly: On the merits, it was error for the court to pronounce the deed void, and to deny to your petitioners proper relief on their bill."

" 1. There was nothing in the terms or provisions of the said deed of trust which stamped it as fraudulent upon its face.

" 2. There was no legal or sufficient proof In the cause that the debts due your petitioners, or any of them, were not just and bona fide, or that the said deed was made with the fraudulent intent imputed in the answer, or under such circumstances as would bring it within the provisions of the statute which denounces and avoids conveyances made with intent to delay or defraud creditors, purchasers, or others."

Hon. Geo. H. Loomis, judge of the circuit court of Wood county, presided on the hearing of the cause.

Lee and Hutchinson for the appellants.

Jackson & Small for the appellees.

The decree shows that the cause was heard upon the bill, answer, and replication thereto. The cause was regularly heard and fully argued, and in such case, the cause will not be retained for any further proceedings, but the bill will be thereupon dismissed with costs. Rowton vs. Rowton, 1 H. & M., 110; Byrne vs. Lyle, 1 H. & M. 7.

The injunction was granted on the 10th of May, 1867, and the cause was heard and decree pronounced, 27th of April, 1868. If the appellants did not take depositions, it was their...