Rhea v. Preston

• Decision Date: 21 July 1881
• Citation: 75 Va. 757
• Parties: RHEA ET ALS. v. PRESTON.
• Court: Virginia Supreme Court

75 Va. 757

RHEA ET ALS. v. PRESTON.

Supreme Court of Appeals of Virginia.

July 21, 1881

Absent, Moncure, P.

1. K sold and conveyed to T a tract of land, reserving a lien for the payment of the purchase money. Afterwards, and on same day, T executed two deeds of trust to secure the payment of two certain debts to D, in one of which deeds the tract purchased from K is conveyed to secure one debt, K uniting in this deed, and in the other deed a tract called the " Mill tract," to secure the other debt. Subsequently to these deeds T executed another trust deed to secure a debt to P, conveying the said " Mill Tract" and other tracts of land. HELD: That K had the right to require that the debt to D shall be paid by the " Mill tract" on which D, as between himself and K has the exclusive lien, and leave the other tract to be applied to K's lien; and K's equity in this respect is prior and paramount to that of P to have the " Mill tract" on which his lien rested exonerated from the D debt for his benefit.

2. Judgments for money, whether docketed or not, bind the unaliened lands of the debtor; certainly those owned by him at the date of the judgments, and, it may be, those subsequently acquired, in the order in which the judgments are recovered, and the same is true of decrees for money; and so, though not docketed, they bind the debtor's lands subsequently aliened to a purchaser with notice, even though he be a purchaser for value; but unless docketed they are not liens on lands subsequently aliened to bona fide purchasers for value without notice--and a trustee in a deed of trust given to secure a debt, and the creditor secured are purchasers for value within the meaning of the registration laws. Code of 1860, Ch. 186, §§ 6, 8, 11; Code of 1873, Ch. 182, §§ 1, 6, 8, 11.

3. A sheriff may purchase a debt in his hands for collection by execution, if he act bona fide. The creditor holds the title, and he may transfer it to whom he will, and it makes no difference that the advance is made at the instance of the debtor, provided there is no intention to extinguish the debt, and the judgment is assigned as a continuing security.

4. The mere levy of an execution is not a satisfaction. There must be a sale or some other act divesting the debtor of his title or depriving him of his property. And where the property levied on is left with the debtor and the levy abandoned other creditors may resort to it, if they see fit, in like manner as if no execution had issued.

5. A forfeited forthcoming bond stands as a security for the debt and though while in force no execution can be taken out or other proceeding be had at law to enforce the original judgment, yet the bond is not an absolute satisfaction. For if it be faulty on its face, or the security when taken be insufficient, or the obligors, though solvent when the bond is taken, become insolvent afterwards, the plaintiff may, for these or other good reasons, on his motion, have the bond quashed and be restored to his original judgment. And though the bond be not quashed, if it appear that it may properly be, a court of equity, which looks to substance rather than form, and when occasion requires it treats that as done which ought to be done, will regard the bond as a nullity, and the original judgment as in full force.

6. Where the accommodation indorser or surety of a note, on which judgment has been obtained, purchases real estate from the principal debtor who retains a lien for the purchase money, and it is a matter of contract between them, at the time of the sale, that the indorser or surety shall assume the payment of the judgment, the relation of the parties inter se is changed. The indorser or surety becomes the real debtor, and the principal debtor the surety; and the latter has the right to require that the lien of the judgment shall be enforced for his exoneration against the real debtor.

This was a suit in equity in the circuit court of Smyth county (afterwards removed to the circuit court of Wythe county), brought by James W. Preston, who sued in his own right and as surviving administrator of John M. Preston against Abijah Thomas and others, asking for a sale of the real estate of said Thomas to satisfy sundry deeds of trust thereon, executed by said Thomas, and judgments which had been obtained against him.

On the 24th day of November, 1860, the said Abijah Thomas executed his writing obligatory to the said John M. Preston for the sum of $5,693, payable twelve months after date, with interest from date. And on this same day the said Abijah Thomas and Priscilla his wife executed to A. C. Cummings, trustee, a deed of trust conveying six adjacent tracts of land in Smyth county, and a separate tract of 354 acres, called the " Mill Tract," to secure the payment of the said sum of money. The said John M. Preston afterwards departed this life intestate, and upon the distribution of his personal estate the said James W. Preston became entitled to the said writing obligatory, and the same was transferred and assigned to him by the administrators of said John M. Preston.

Prior to the execution of the deed of trust to said A. C. Cummings--to-wit: on the 2d day of June, 1859--the said Thomas and wife had executed to Benjamin R. Floyd, trustee, to secure to George Douglas two several debts of $6,000, two deeds of trusts, conveying by one of said deeds a tract of 414 acres of land in Smyth county, referred to in the proceedings as the " Killinger tract," in which deed one Peter Killinger (who had sold the land to said Thomas, retaining a lien for the purchase money), united; and by the other of said deeds conveying the said " Mill Tract," embraced in the trust deed to said A. C. Cummings. The said Thomas had also on the 29th day of July, 1858, executed to James H. Gilmore a deed of trust to secure V. S. Morgan a debt of $8,000, conveying a tract of 400 acres, another portion of the land embraced in the trust deed to said A. C. Cummings, trustee.

Subsequently to the execution of the said deed to the said A. C. Cummings, trustee, the said Thomas and wife executed a trust deed to E. A. Scott, trustee--to-wit: on the 17th day of December, 1860--to secure to W. P. Scott a debt of $12,500, conveying all the lands which had been conveyed to said A. C. Cummings, trustee, as aforesaid, except the " Mill Tract."

The complainant's bill, after reciting the above facts (which are proved by the exhibits filed), states that the complainant is informed that if not all, at least a large part of the debt secured by the deed of trust executed as aforesaid to said Floyd as trustee, had been satisfied and paid, and that the complainant claimed that said Douglas, the beneficiary in said deed, shall look first for any balance due him to the deed on the 414 acres of land (the " Killinger tract" ) before he is allowed to resort to the " Mill Tract," he having two subjects to look to, while the complainant has but the one, unincumbered--to-wit: the mill property.

No judgments against the said Thomas, then unsatisfied, were rendered and docketed prior to the admission to record of said Douglas's deed of trust; but there were rendered and docketed prior to the admission to record of any of the other deeds of trust before mentioned a number of judgments against the said Thomas, which are particularly set forth in the bill, and which are stated to be all the judgments against him unsatisfied that were docketed anterior to the admission to record of the several deeds of trust to secure said V. S. Morgan, John M. Preston, and W. P. Scott, respectively.

The bill further alleges that the said Abijah Thomas owns many other and valuable tracts of land besides the lands conveyed in trust to secure the debts to the several parties aforesaid, so that although, except as to the deed of trust to secure the said George Douglas, there are prior judgments unsatisfied; yet, under the 10th section of chapter 186 of the Code of Virginia (1860) the lands thus retained by said Thomas are " first liable to the satisfaction of the said judgments" before they can be enforced against any of the lands conveyed by the said several trust deeds. That upon many of the judgments above referred to executions have been issued with returns upon the same showing a levy upon personal property without showing that any disposition of the property has ever been made; upon others it appears that there have been levies and the property not sold; upon others executions appear, after levy, to have been held up by order of the plaintiff; and upon some of the judgments it appears that executions were ordered to lie for different periods.

The complainant claims that after levy of the said executions, unless the property was released from the levy by legal process, the plaintiffs, as against the deeds of trust aforesaid, cannot abandon their levies and assert the lien of their judgments against the lands conveyed by said deeds.

It is further represented in the complainant's bill that there are numerous judgment creditors of the said Abijah Thomas whose judgments were obtained subsequently to the admission of the deeds of trust aforesaid to record, but their number, the state of their claims, whether satisfied in whole or in part, or wholly unsatisfied, cannot be ascertained without the taking of an account by a commissioner under the direction of the court.

The bill, after making the trustees and beneficiaries in the deed of trust aforesaid, and the judgment creditors of said Thomas, parties defendants, and requiring them to state whether they have received any payments on account of the said encumbrances, and, if any, their several amounts and dates, prays as follows: " That an account be taken of the said debts of the said Douglas and of...