Mcilvane v. Big Stony Lumber Co

• Decision Date: 28 June 1906
• Citation: 105 Va. 613,54 S.E. 473
• Parties: McILVANE. v. BIG STONY LUMBER CO. et al.
• Court: Virginia Supreme Court

54 S.E. 473

105 Va. 613

McILVANE.

v.BIG STONY LUMBER CO. et al.

Supreme Court of Appeals of Virginia.

June 28, 1906.

1. Frauds, Statute of—Construction.

Code 1904, § 2840, provides that certain actions cannot be maintained unless the contract or undertaking is in writing and signed by the parties to be charged thereby. Held, that such section was intended to prohibit actions in certain designated cases, and did not authorize the maintenance of an action on a contract by one not a party thereto, nor sought to be charged thereby.

2. Contracts—Persons Entitled to Sue—— Privity.

Code 1904, § 2860, authorizes the assignee of a bond or any other chose in action to sue in his own name and to maintain any action which the original obligee, payee, or contracting party might have brought. Held, that such section did not authorize an original creditor to sue at law on covenants by third persons to assume and pay the debt, where there was no consideration passing from such creditor to such covenantors and there was no privity between them.

3. Covenants—Deed of Another—Assumption.

A corporation indebted to plaintiff transferred its assets by deed to a trustee, subject to certain liabilities, which the trustee and his associates covenanted to assume and pay. The trustee thereafter by deed conveyed the same property to defendant lumber company, which in turn also convenanted to assume and pay such debts, including the indebtedness to plaintiff. Held, that such conveyance did not transfer plaintiff's demand against the corporation, so that it constituted an enforceable demand either against the trustee and his associates or defendant corporation.

[Ed. Note.—For cases in point, see vol. 14, Cent. Dig. Covenants, § 29.]

4. Subrogation—Enforcement—Equity.

If, by such covenants, the covenantors became primarily liable and the original debtor a mere surety, the creditor's right to enforce the same on the theory of equitable subrogation was only available in a suit in equity.

5. Covenants — Enforcement — Right to Sue.

A covenant by third persons to pay certain debts of the grantor as part of the consideration for the conveyance, there being no novation, privity, nor consideration passing between the creditor and the covenators, is unenforceable by the creditor under Code 1904, § 2415, providing that an immediate estate or interest in or the benefit of a condition respecting any estate may be taken by a person under an instrument, though he may not be a party thereto, and if a covenant or promise be made for the sole benefit of a person with whom it is not made, such person may maintain in his own name any action thereon, etc.

6. Abatement and Revival — Grounds — Misjoinder of Parties—Statutes.

Where plaintiffs brought suit at law to avail themselves of three instruments containing covenants of indemnity and relief of the grantor in the first instrument, which were only available between the parties and their privies, and plaintiff's relief if any could only be had in equity, the action was not maintainable under Code 1904, § 3528a, providing that in a suit brought in a proper forum where there has been a misjoinder of parties plaintiff or defendant, the court may order the action to abate as to any party improperly joined and proceed as to the others.

Error to Circuit Court, Giles County.

Action by J. G. McIlvane against the Big Stony Lumber Company and others. From a judgment sustaining a demurrer to plaintiff's notice and dismissing the same, he brings error. Affirmed.

S. W. Williams and R. W. Williams, for plaintiff in error.

Williams & Farrier, Geo. W. St. Clair, and R. L. Jordan, for defendants in error.

CARDWELL, J. By deed dated the 4th day of September, 1903, the Porterfield Lumber Company, a corporation, conveyed its entire holdings, real and personal, to P. F. St. Clair, trustee. The consideration for the conveyance, as set out therein, was "twenty-five hundred dollars, in hand paid by the party of the second part to the party of the first part * * * and the party of the second part and his associates have assumed and do hereby assume the payment of a certain debt due from the party of the first part to the Bank of Giles, which in no event Is to exceed five thousand nine hundred dollars ($5,900), and the said party of the second part and his associates have assumed the payment and do hereby assume the payment of a certain debt due from the party of the first part to Lear & McTilly as set forth and described in a deed of trust of record in the said clerk's office * * * in no event to exceed twenty-two thousand five hundred dollars ($22,500) as of this date, and the said debt is assumed by the said party of the second part and his associates upon the same terms and conditions set forth in said deed of trust, and the further consideration of the party of the second part and his associates assuming the payment of other debts contracted by the party of the first part and due from the party of the first part as set forth in a paper of even date herewith, which said paper described each of the said debts so assumed by the party of the second part and his associates." In a contract bearing even date with the conveyance just mentioned, made and entered into between the Porterfield Lumber Company, of the first part, and P. F. St. Clair, M. P. Farrier, D. M. St. Clair, T. G. Porterfield, and George W. St. Clair, of the second part, the debts to be assumed by P. F. St. Clair, trustee, and his associates, as mentioned in the deed of conveyance, other than the debts due the Bank of Giles and Lear and McTilly, are stated as follows: "A debt due J. Gibson McIlvane, of Philadelphia, Penn., in no event to exceed two thousand dollars ($2,000.00), which is to be paid either in lumber at market prices or cash, and debts due from Porterfield Lumber Company to various laborers for labor performed, not to exceed in any event two thousand dollars ($2,000.00)." By deed bearing date the 19th day of September, 1903, P. F. St. Clair, trustee, conveyed to the Big Stony Lumber Company, Inc., all of the property, real and personal, which was conveyed to the said St. Clair, trustee, by the Porterfield Lumber Company by its deed of September 4, 1903. The consideration for this conveyance from St. Clair, trustee, to the Big Stony Lumber Company, Incorporated, is stated as follows: "In consideration of the premises and twenty-five hundred dollars in hand paid, receipt whereof is hereby acknowledged, and the party of the second part assuming the payment of the debts hereinafter set forth and described." The debts mentioned and described in the deed as assumed by the party of the second part are stated as follows: "The payment of a certain debt due from the Porterfield Lumber Company to the Bank of Giles, which in no event is to exceed $5,900.00, and another debt which is due from the Porterfield Lumber Company to Lear & McVitty, Inc., and set forth and described in a deed of trust of record in said clerk's office * * * which said debt in no event is to exceed $22,500.00 as of the 4th day of September, 1903, which said debt is assumed by the Big Stony Lumber Company upon the same terms and conditions as set forth in said deed oftrust, and the other debts which are hereby assumed by the Big Stony Lumber Company, Incorporated, are set forth in a paper dated the 4th day of September, 1903, which said paper is referred to in the deed dated even date therewith, executed by the Porterfield Lumber Company, conveying the properties herein described to P. F. St. Clair."

To the May term, 1905, of the circuit court of Giles county, J. Gibson McIlvane and Hugh McIlvane, partners under the firm style of J. Gibson McIlvane & Co., Incorporated, brought their action by a motion under the statute against the Big Stony Lumber Company, a corporation, P. P. St. Clair, trustee, P. F. St. Clair, M. P. Farrier, D. M. St Clair, and the Porterfield Lumber Company, to recover the sum of $2,000, with interest thereon from the 4th day of September, 1903, basing their right to this recovery upon the contracts, covenants, undertakings, and agreements contained in the deed dated the 4th day of September, 1903, above mentioned as executed by the Porterfield Lumber Company to P. F. St Clair, trustee; the covenants, contracts, agreements, and undertakings contained in the agreement referred to in said deed, dated on the same date therewith, and signed by the Porterfield Lumber Company, P. F. St. Clair, M. P. Farrier, D. M. St. Clair and George W. St Clair; and the covenants, etc., contained in the deed of September 19, 1903, from St. Clair, trustee, to the Big Stony Lumber Company.

At the calling of the case the defendants craved oyer of the deed sued on and mentioned in the notice, and produced in court the deeds called for in plaintiffs' notice, of all which oyer was had and said papers read and considered by the court; whereupon the defendants demurred to the notice and moved to dismiss the same, in which demurrer plaintiffs joined and objected to the dismissal of the notice. After argument of counsel, the court sustained the demurrer and dismissed the notice, but without prejudice to the rights of plaintiffs to institute such proceeding in...