Stribling v. Coal Co.

• Decision Date: 25 February 1888
• Citation: 31 W.Va. 82
• Court: West Virginia Supreme Court
• Parties: Stribling v. Coal Co.

31 W.Va. 82

Stribling

v.Coal Co.

Supreme Court of Appeals of West Virginia.

Submitted January 25, 1888.

Decided February 25, 1888.

Submitted January 25, 1888. Decided February 25, 1888.

f62 6831 1. Liens Release of Deed of Trust.

The owner of land conveys the same by deed to secure the payment of a specified number of coupon-bonds, and it is provided in the deed that said bonds are to be used in exchange for and to take up the outstanding debts of the owner, including the liens on the land, whether placed there by the owner or by former owners, so far as the same can be done, giving preference to the liens. A creditor who has a prior lien on a part of the land accepts in settlement of his debt coupon bonds, surrenders his original evidence of debt, and by writing under seal releases his lien. A number of other creditors having prior liens refuse to accept coupon bonds in satisfaction of them; and many of the bonds are used to take up simple contract debts of the owner. Held, (1) the terms of the deed did not make the taking up of all the prior liens a condition which, unless complied with, would make the release of their prior liens by those who had accepted bonds void; (2) the only limitatation imposed by the terms of the deed is that the lien-creditors should be preferred in issuing the bonds; but the power to use the bonds in taking up the debts of the company is not confined to prior liens on the land, and could be rightfully used in taking up any debts of the company, including simple contract-debts. (p.86.)

2. Release of Lien.

Whether or not a particular transaction amounts to the release of a lien on real estate is a question of intention on the part of the releasor. In a doubtful case such intention will not be inched; but, when it is clear that such was the intention, a court of equity will enforce the release, although no formal release has been executed. (p. 90.)

3. Lien Administrators Powers Release oe Lien.

An administrator has full control of the personal estate, and may sell the choses in action if the exigencies of the estate require it, or he may exchange a bond due to the estate for the note of a third person, and release the lien on real estate by which such bond is secured, and if done without fraud the transaction will be binding upon the administrator and those whom he represents, (p. 90.)

4. Waiver Supreme Court of Appeals.

When the parties, whose interests would entitle them to call for a decision upon a particular question presented by the record, waive such decision, this Court will not pass upon such question at the instance of a party who cannot be benefited or affected by such decision, (p. 93.)

Miller &Gallagher and J. S. Swann for appellants.

Mollohan & Jackson, W. 8. Laidley, G. S. Couch and J. F. Brown for appellee.

Snyder, Judge:

In 1871, the Splint Coal Company, a corporation, was created and organized under the laws of this State for the purpose of mining coal, manufacturing iron and salt, and for other purposes. Between the date of its organization and December 1, 1875, the said company had become the owner and vested with the legal title to a large body of land, nearly 3, 000 acres, situated on the south side of the Kanawha river, a short distance above the city of Charleston, in Kanawha county, of which about 900 acres was bottom land and the residue was hill land, with the improvements thereon, consisting of 2 salt furnaces, 23 salt wells, 5 mansion houses, 94 laborers' houses, and other buildings and improvements. These lands were purchased in tracts from a number of different persons, and many of the tracts were incumbered by vendor's and other liens, and the vendors conveyed them to the company subject to these prior incumbrances, the company assuming to pay off said liens as a part of the purchase-money, and executing its bonds for the residue, for which vendor's liens were retained by the respective vendors to the company. These liens, together with the judgments recovered against the company after the lands had been conveyed to it, made the aggregate amount of the liens upon the property about $100,000.00. The company, being desirous of selling the whole of its property, then believed to be worth at least $250,000.00, at a meeting of its board of directors, held November 22, 1875, adopted a resolution authorizing its president to execute and deliver to Charles C. Lewis and Edward B. Knight, trustees, a trust-deed upon said property to secure the payment of 200 coupon bonds of $500.00 each, aggregating $100,000.00, with interest at 8 per cent., payable semi-annually, and the principal to mature 10 years after date;" the bonds to be used in exchange for and to take up the outstanding debts and obligations of the company, including the liens upon the land, whether placed by the company or by the former owners of the land, so far as the same can be done, giving preference to liens." In pursuance of this resolution, the company executed the trustdeed, dated December 1, 1875, and the same was duly recorded in said county on January 7, 1876. A number of the creditors having vendor's and judgment-liens on the property accepted the coupon bonds secured in said deed in satisfaction of their prior liens on portions of the land, but other lien-creditors refused to accept coupon bonds in satisfaction of their prior liens, and some of said bonds were delivered to creditors of the company in discharge of simple contract debts, or for liens posterior to that of the trust-deed. On August 19, 1876, the board of directors, by resolution, directed $20,000.00 of said coupon bonds to be delivered to I). L. Buffner, to be held by him as an indemnity to W. A. Quarrier, as surety, on debts of the company. And, on April 30, 1878, the board ordered all the coupon bonds not theretofore issued to be placed in the hands of said Ruffner as collateral security to indemnify Job E. Thayer and W. A. Quarrier as sureties upon debts due from the company. According to the provisions of the trust-deed and these resolutions, the whole of the 200 coupon bonds were issued and delivered to the creditors of the company, but fess than $20,000.00 were accepted in discharge of vendor's and other liens prior to that of the trust-deed, though a number of the bonds were delivered to such prior lien-creditors as collateral security for their respective debts. Soon after the execution of the trust-deed, Dr. John P. Hale, the principal promoter and manager of the enterprise, as well as the largest stockholder of the company, went to Europe to effect a sale of the property. It was expected, and at one time there was a reasonable prospect, that a sale would be consummated at half a million dollars, but no sale was effected. About this time the property began to decline by reason of the destruction of the salt business, for the carrying on of which it was especially valuable, and its value continued to depreciate until it became manifest that the liens having priority over the coupon trust-deed would consume the greater part, if not the whole, of the property, and that the creditors holding liens under or subsequent in priority to said trust-deed would realize very little if anything upon their debts. In October, 1876, T. Stribling and others, judgmentcreditors, filed their bill in the Circuit Court of Kanawha county against said company, all its lien-creditors, and others, to enforce their liens, ascertain the liens and their priorities against the real estate of the company, and to have said real estate sold to pay off said lien-debts. The cause was referred to Commissioner Gallagher, and afterwards to Commissioner Middleton, to report the debts, their respective liens, and priorities. After Commissioner Gallagher had filed his report, the defendants, B. H. Smith and F. F. Brooks, filed their joint petitions and the defendants, Bradford M. Noyes, trustee, and Jesse H. Grogan, filed their separate answers and cross-bills in the cause. On October 6, 1886, Commissioner Middleton returned his final report, to which several of the parties filed exceptions. The Circuit Court on January 7, 1887, pronounced a decree ascertaining and fixing the amount of the debts, the order and priorities of the liens on each of the several tracts or parcels of land, and directed all the land to be sold to pay off said liens. From portions of this decree B. H. Smith and F. F. Brooks have appealed, from other portoins D. C. Gallagher, substituted trustee for Bradford M. Noyes, has appealed, and from still other portions the defendant, Jesse H. Grogan, has appealed. The record is very voluminous, and the decree very long and complicated in its provisions, affecting and adjudicating many questions and interests unconnected with the claims of the appellants, and therefore, as none of the appellees make any complaint of the decree or desire its reversal, I shall confine this opinion to a consideration and determination of the questions raised by the appellants, and only state such parts of the record as bear upon these questions.

Appeal of Smith and Brooks. By deed, dated December 22, 1870, B. H. Smith and F. F. Brooks conveyed to the Splint Coal Company 15 acres of bottom land, and their undivided interests in certain hill lands appurtenant thereto, in which deed they retained a vendor's lien to secure the payment of $13,000.00 purchase-money evidenced by five notes payable from one to five years after date. Immediately after the company executed the coupon trust-deed hereinbefore mentioned, Smith and Brooks accepted from the company 19 of its coupon bonds in satisfaction of the balance then due on said vendor's lien, and a due-bill for $248.20 held by Smith against the company, and they thereupon surrendered the said purchase-money notes, and executed and delivered to the company the following release:

" We, B. H. Smith and F. F. Brooks, hereby release the right reserved to us in a conveyance executed by us, and our respective wives, dated...