Norris v. Lake

• Decision Date: 05 January 1893
• Citation: 89 Va. 513,16 S.E. 663
• Parties: NORRIS v. LAKE et al
• Court: Virginia Supreme Court

16 S.E. 663

89 Va. 513

NORRIS

v.LAKE et al

Supreme Court of Appeals of Virginia.

Jan. 5, 1893.

Trust Deed—Validity—Uncertainty in Amount of Debts Secured — Postponement of Sale— Possession Retained by Grantor—Receiver —Appealable Order.

1. A trust deed conveying land and personal property was given to secure certain debts due from the grantor to specified persons, "the amount whereof cannot now be accurately stated, but believed to be about the sum of $——

and to other named persons "of about $———."

The deed provided that the trustees "shall, with all convenient dispatch, proceed to ascertain accurately the amount of said several debts, " and "if default be made by the grantor in the payment of said debts, or either of them, when the amounts thereof are so ascertained, " at the request of creditors the trustees shall sell the property for cash, the grantor in the mean time to remain in possession. Held, that such deed is not fraudulent on its face, since fraud is not necessarily presumed from the provisions postponing the sale for a reasonable time, and reserving to the grantor the use of the property in the mean time.

2. Such deed is not fraudulent because the exact amount of the debts is not accurately stated.

3. There is nothing on the face of such deed to warrant the inference that the amount of the debts cannot be accurately ascertained within a reasonable time.

4. Nor is such deed fraudulent because there can be no sale until one or more of the creditors require it and the property is thereby indefinitely locked up, since in case of undue delay a court of equity would compel the execution of the trust.

5. The provision in such deed requiring a sale for cash is not a badge of fraud, since Code, § 2442, provides that, in cases in which the deed does not otherwise provide, the sale shall be for cash.

6. In an action by a junior judgment creditor to set aside a trust deed, and for the appointment of a receiver, on the grounds (1) that it was fraudulent on its face, and (2) fraudulent in fact, the court refused to appoint a receiver, but directed the trustee to execute the trust, and referred the cause to a commissioner to take an account of liens. To the report of the commissioner sustaining the validity of the liens, plaintiff excepted, on the ground that the deed and the debts secured were fraudulent. The court without deciding whether or not the deed was fraudulent in fact, but being of the opinion that it was not fraudulent on its face, overruled "all the exceptions which are inconsistent with this view, " and recommitted the report to the commissioner, to consider it touching the debts mentioned in the exceptions, with authority to re-examine any witnesses and take additional evidence. Held, that such order was appealable, since it decided that the deed was not fraudulent per se; thus overruling one of the grounds on which relief was asked.

7. Where, in such case, at the time a mo-tion for a receiver Is made, no evidence has been taken to show that such deed was fraudulent in fact, and it appears that the undisputed debts which are prior to plaintiff's judgment exceed the assessed value of the land, and that the proceeds of the personalty are under the control of the court, it is not error to refuse to appoint a receiver.

Appeal from circuit court, Fauquier county.

Action by H. D. B. Norris, a judgment creditor, against W. H. Lake and others, to set aside a deed of trust and for the appointment of a receiver. From an order deciding that the deed was not fraudulent on its face, refusing to appoint a receiver, and referring the cause to a commissioner, plaintiff appeals. Affirmed.

The deed excuted before the recovery of the judgment conveyed certain land and personal property to secure "to William H.Lake a debt due to him by the said William H. Lake, the amount whereof cannot now be accurately stated, but believed to be about the sum of $2,000; to Theodore M. Triplett a debt due to him by the grantor, the amount whereof cannot now be accurately stated, but the principal of which is believed to be about $2,000; to J. A. Chappelear a debt of about $(>4N, due by bond or note on which the said William H. Lake and Theodore M. Triplett are sureties; to Robert Bayly a debt of about $3,200, due by the grantor, on which the said William H. Lake is surety; and a debt due to Shacklett & Pfeifer for about $300, due by note and open account." It provided that the trustees "shall, with all convenient dispatch, proceed to ascertain accurately the amount of said several debts, " and "if default be made by the grantor in the payment of said debts, or either of...