Lawyer v. Barker

• Decision Date: 03 December 1898
• Citation: 45 W.Va. 468,31 S.E. 964
• Parties: LAWYER . v. BARKER et al.
• Court: West Virginia Supreme Court

31 S.E. 964

45 W.Va. 468

LAWYER .

v.BARKER et al.

Supreme Court of Appeals of West Virginia.

Dec. 3, 1898.

Fraudulent Conveyances—Deed of Trust Creditors—Purchasers for Value.

1. The syllabus in the case of Grocer Co. v. Williams, 27 S. E. 345. 43 W. Va. 323, and in Casto v. Greer, 30 S. E. 100, 44 W. Va. 332, are affirmed.

2. Where an insolvent debtor conveys all the property owned by him, being the equity of redemption in a certain tract of land in trust to secure future repairs to be made thereon, and it does not appear that such repairs added to or enhanced the value thereof, such conveyance will be held void, under section 2, c. 74, of the Code, as to the preference thereby secured.

(Syllabus by the Court.)

Appeal from circuit court, Morgan county; E. Boyd Faulkner, Judge.

Action by Charles W. Lawyer against John H. Barker and others. From the decree rendered, defendant S. A. Westenhaver appeals. Affirmed.

Flick, Westenhaver & Baker, for appellant.

T. W. B. Duckwall and M. T. Ingles, for appellees.

DENT, J. S. A. Westenhaver appeals from certain decrees of the circuit court of Morgan county rendered in the case of Charles W. Lawyer, trustee, against John H. Barker and others. The facts are as follows: John H. Barker, an insolvent, on the 13th day of December, 1893, conveyed his whole estate, consisting of an equity of redemption in a certain tract of land, to D. C. Westenhaver, trustee, to secure to the defendant S. A. Westenhaver, the payment of the sum of $465, evidenced by note now held by the Citizens' National Bank of Martinsburg. This note was given in payment of repairs to be thereafter made by the payee on the property conveyed, and which were completed within about two months from the date of the transaction. The property sold under a prior deed of trust, and the surplus representing the equity of redemption, were brought into court for its disposition. Appellant claimed that the whole amount should first be applied to the payment of his trust debt, while the other creditors of Barker insisted that the trust deed, having been executed by an insolvent debtor, was an unlawful preference, and amounted to a general assignment for the benefit of Barker's creditors, and that the fund realized should be divided pro rata among all the creditors whose debts existed at the time of the execution of such trust. The circuit court took the latter view, and distributed the fund pro rata. Appellant insists that this was error, for the reason that his debt was not in existence at the time of the execution of the trust, and that, therefore, he is entitled to be regarded as a bona fide innocent purchaser, without notice, but, if not, that the limitations provided in Acts 1895 apply to his trust. To sustain either or both of these positions, this court is asked to review the so-styled "hastily and ill considered" decisions of Grocer Co. v. Williams (W. Va.) 27 S. E. 345, and Casto v. Greer (W. Va.) 30 S. E. 100; yet no argument or principle of law is adduced which was not fully weighed and carefully considered before the above decisions were handed down. All deed of trust creditors are, under certain circumstances, to be regardedas purchasers for value, but, generally speaking, they are nothing more than creditors. Because a person takes a deed of trust from a known insolvent, to secure future advances to be made by him, does not make him any more a purchaser for value than any other trust creditor; and his very action enables the debtor to place his property beyond the reach of his creditors, and throws upon such person the duty of showing the bona fides of the transaction; and this cannot be satisfied by merely showing that the advances were made, but it must also be shown, in case they were to be in the shape of repairs, that such repairs were necessary, and added...