McCormack v. James

• Decision Date: 27 May 1886
• Citation: 36 F. 14
• Parties: McCORMACK v. JAMES.
• Court: U.S. Court of Appeals — Fourth Circuit

36 F. 14

McCORMACK v. JAMES.

United States District Court, W.D. Virginia.

May 27, 1886

Campbell & Trigg, Daniel Trigg, and Seldon Longley, for plaintiff.

White &amp Buchanan, for defendant.

PAUL J.

On the 25th day of April, 1861, Hansford James, of Smyth county Va., executed to James Ward a deed of trust conveying to said Ward a tract of land lying in said county, to secure certain creditors therein named, a preference being given to David E. James, to whom he owed one bond of $2,226, and some other smaller amounts. This deed was duly admitted to record in the clerk's office of the county court of Smyth county on the day of its execution, April 25, 1861. In March, 1862, said David E. James assigned his interest in said trust deed to Henry Horne; and in May, 1863, the said Hansford James, the grantor in the deed of trust, sold the said tract of 280 acres of land to the plaintiff, Micajah McCormack, at the price of $7,500, in Confederate currency, of which sum said McCormack paid cash $6,500, and executed his bond for $1,000 payable two years after date, the date being May 9, 1863. Said McCormack was put in possession of said land in the fall of 1863, and remained in possession thereof until June 24, 1870. On the 30th day of May, 1868, the said Hansford James filed his petition in bankruptcy, and was adjudicated a bankrupt thereon. In his schedules in bankruptcy said Hansford James surrendered the said tract of 280 acres of land on which the deed of trust to Ward was given, and which he had sold to Micajah McCormack in 1863; and in November, 1868, said land was sold by G. J. Holbrook, the assignee in bankruptcy of said Hansford James, and at said sale David E. James, the preferred creditor in the deed of trust to Ward, became the purchaser at the price of $1,500. In November, 1868, Micajah McCormack filed his bill before Hon. JOHN C. UNDERWOOD, United States district judge for the district of Virginia, praying for an injunction against the assignee of Hansford James, bankrupt, and said David E. James, from further proceedings in said sale to David E. James, and that a title be decreed to said McCormack for said land. On the 9th of December, 1868, a restraining order was awarded, as prayed for in the bill. To this bill Hansford James, David E. James, and G. J. Holbrook, assignee in bankruptcy of Hansford James, filed their answers; but on the 24th of November, 1869, the injunction granted December 9, 1868, was dissolved. On the 24th of June, 1870, an order was entered declaring David E. James entitled to the possession of said land, and ordering the marshal to put him in possession thereof. By an order entered April 3, 1872, at Richmond, the cause was removed into the court of the Western district, at Abingdon. On a motion made November 21, 1872, to reinstate the injunction, and for a rehearing, the bill was dismissed, with costs to the defendants. November 28, 1874, McCormack filed a bill of review, to which David E. James filed his answer, and on the 12th day of June, 1875, the decree of November 21, 1872, dismissing McCormack's bill, was reversed and annulled, and the injunction dissolved by order of November 24, 1869, was reinstated; the sale made by Holbrook, assignee of Hansford James, bankrupt, to David E. James was set aside, vacated, and annulled, and a writ of possession awarded McCormack for the land. The order says further:

'It appearing to the court that there is a lien asserted against said land by David E. James, which he claims is prior in date to plaintiff's purchase, and that the lien is still subsisting and valid; and it further appearing that there is still a balance of purchase money due from the plaintiff, and that he claims to be entitled to rents and profits for the use of said lands during the time that he has been dispossessed thereof,-- it is ordered that he so amend his bill as to bring these matters, and any others he may be advised, before this court.'

In pursuance of this order, McCormack filed his amended and supplemental bill, October 1, 1875, to which the defendants David E. James and Hansford James filed their answers October 21, 1875. In the mean time, on the 19th of August, 1875, said David E. James filed his petition, praying that the said Micajah McCormack be compelled to pay the debt of $2,225, secured in said deed of trust, due said James, and that said McCormack, W. O. Austin, deputy-marshal, their agents, etc., be restrained from executing the writ of possession awarded McCormack by the decree of June 12, 1875. On this petition a restraining order was granted as prayed for. To this petition McCormack filed his demurrer and answer. On the 3d day of November, 1875, an order was entered dissolving the restraining order granted August 19, 1875, and allowing McCormack his costs against James. From this order an appeal was taken to the circuit court. On the 28th day of March, 1876, the appeal was docketed in the circuit court at Lynchburg, and an order issued restraining McCormack from all further proceedings in the district court, until the adjudication of the appeal in the circuit court. On the . . . day of March, 1877, the appeal was heard at Lynchburg, by Judge BOND, the circuit judge, and the decrees of June 12 and November 3, 1875, were affirmed, and the appeal dismissed. From this decree an appeal was taken by David E. James to the supreme court of the United States. In the supreme court the cause was dismissed under the sixteenth rule of that court. Nothing more was done in the case until June 5, 1883, when a decree was entered in accordance with the decree of 1874, and the prayer of the amended and supplemental bill filed by McCormack, October 1, 1875, referring to M. H. Honaker, a special commissioner, to take an account, and report 'what liability, if any, attaches to the alleged deed of trust exhibited by the defendant David E. James, with his answer, purporting to convey to James Ward, for the purposes therein mentioned, the land therein mentioned, by said Hansford James, which paper bears date April 25, 1861. What would be a reasonable rent for said land from the 24th of June, 1870, to the 5th day of July, 1875? ' The question of rents and profits was, by agreement in writing, signed by the plaintiff and defendant, submitted to the arbitration of James T. Porter and R. C. Williams, as was also the question as to the value of permanent improvements put upon the lands by the defendant, David E. James, during his occupation under this purchase from Holbrook, assignee in bankruptcy of Hansford James. Said arbitrators made their award, which was adopted by the special commissioner, and made part of his report.

The commissioner reports that the debt secured by the deed of trust is a liability attaching to the plaintiff by reason of his purchase of the land conveyed in the trust deed. The substance of the report is that the debt of $2,225 is a lien on the land, and this is the main point of controversy in this cause.

To this report the plaintiff, McCormack, files exceptions, marked 1, 2, 3, 4, and 5. The defendant files exceptions numbered 1 and 2. The second exception by the defendant, which is to the amount of rent allowed McCormack by the commissioner, is withdrawn in the written agreement filed by the defendant's counsel. The remaining exception is for the failure of the commissioner to report certain judgments claimed by the defendant to be liens on the land conveyed in trust. These judgments were excluded, as the commissioner states, for want of sufficient proof. The court is of opinion that the report is correct in this respect, and the exception must be overruled.

The first exception filed by the plaintiff is for failure of the commissioner to report what facts were, according to his view of the evidence, proved. The report is in conformity with the requirements of equity rule No. 76, and this exception must be overruled. For the same reason plaintiff's exception No. 3 must be overruled.

Plaintiff's fourth exception is that the commissioner erred in allowing the defendant, David E. James, charges for permanent improvements put upon the property while held by him under his purchase from G. J. Holbrook, assignee of Hansford James, bankrupt. While it is true, as alleged in the exception, that this matter was not embraced in the decree of reference, yet the question is raised in the pleadings. The parties, plaintiff and defendant, examined witnesses as to the value of the improvements, and the plaintiff and defendant agreed to submit the same to arbitration. They had the power to do this. It was a matter in controversy, and the amount ascertained by the award was properly allowed by the commissioner, and this exception must be overruled.

Plaintiff's fifth exception says: 'The evidence shows that the trust debt was paid by Hansford James, and the commissioner should therefore have reported that there was no existing liability by reason of the deed of trust. ' The evidence, in the opinion of the court, does not show the debt to have been paid; and, granting that the testimony on this question was conflicting, it was the province of the commissioner to determine its weight and credibility. The exception will be overruled.

This disposes of all the exceptions filed by the plaintiff and the defendant, except the second exception filed by the plaintiff. This exception states two grounds which, it is asserted, should defeat the claim of the defendant, David E James, under the deed of trust of April 25, 1861. The first is 'that McCormack is an innocent purchaser for valuable consideration without notice of the deed of trust. ' The second is 'that the defendant, David E. James, participated in the negotiations which culminated in the sale to and the payment by McCormack of...