Tildesley Coal Co. v. American Fuel Corp.
| Citation | 45 S.E.2d 750,130 W.Va. 720 |
| Decision Date | 11 November 1947 |
| Docket Number | 9921. |
| Parties | TILDESLEY COAL CO. v. AMERICAN FUEL CORPORATION et al. |
| Court | West Virginia Supreme Court |
Appeal from Circuit Court, Preston County.
Syllabus by the Court.
1. Where the relation of debtor and creditor exists, and the indebtedness is represented by two or more evidences of debt the debtor, in making a payment on his indebtedness, has the right to direct that his payment be applied to a particular indebtedness; if no such direction is given, the creditor may make application of such payment to any such indebtedness, as he may elect; and if there be no such direction by the debtor, and no application of payment by the creditor, a court will apply such payment to the debt least secured, and, when equally secured, to the oldest thereof.
2. A court of equity will not allow a valid and existing trust to fail for want of a trustee.
3. A written instrument, purporting to be a deed of trust, wherein a debtor conveys property to his creditor, in trust to secure the payment of indebtedness due the grantee, will be construed as a mortgage and as creating a lien on the property thus conveyed; and the grantee and creditor will be treated as a purchaser within the meaning of West Virginia Code, 11-13-12, and Section 3672 of the United States Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 3672.
4. Under Code, 29-4-8, and under general law, failure of a notary public, in affixing his signature to a certificate of acknowledgment or other certificate, to state the expiration date of his commission as such, does not invalidate his official act, if his commission be at the time thereof in force; and the burden of showing that the commission of the notary public was not in force at the date of the certificate, rests upon him who attacks its validity.
5. One who purchases personal property, and the possession thereof is given him under a bill of sale, is a purchaser, within the meaning of Section 3672 of the United States Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 3672, and West Virginia Code, 11-13-12; and such purchaser and those claiming under him, hold such property free of the tax liens of the Federal and State Governments, where notices of such liens have not, at the effective date of such bill of sale, been filed in the office of the clerk of the county court of the county in which such property is located, in the manner contemplated by the Code sections mentioned herein.
6. Before the Government of the United States may avail itself of the priority in its favor, as against creditors of a living debtor, it must be clearly shown that the property of such debtor is insufficient to pay all his debts, and that he has made a voluntary assignment thereof to pay the same; or in which the effects of an absconding, concealed or absent debtor are attached by process of law; or that an act of bankruptcy has been committed under an existing bankruptcy act.
7. 'The vendor in a conditional sales contract, duly filed wherein title to the property sold is retained by him until the full payment of the purchase price therefor, is entitled to have paid any balance due him thereon before the payment of any lien which may attach thereto, except the lien of a levy for property taxes.' Moran v. Leccony Smokeless Coal Co., 122 W.Va. 405, Pt. 3, Syl., 10 S.E.2d 578, 136 A.L.R. 1007.
F. E. Parrack, of Kingwood, Floyd Anderson, of Cincinnati, Ohio, and R. Doyne Halbritter, of Kingwood, for appellant.
Milford L. Gibson, of Kingwood, Theron L. Caudle, Asst. Atty. Gen., Sewell Key, A. F. Prescott, and Fred E. Youngman, Sp. Assts. to Atty. Gen., C. Lee Spillers, U.S. Atty., of Wheeling, and Howard Caplan, Asst. U.S. Atty., of Clarksburg, for appellees.
FOX, President.
The American Fuel Corporation was engaged in a strip coal mining operation in Preston County, West Virginia, and on the 18th day of August, 1942, the West Virginia Tractor and Equipment Company, a corporation, hereinafter designated as 'Tractor Company', by a conditional sales contract, delivered to said American Fuel Corporation, hereinafter designated as 'Fuel Corporation', a tractor and scraper at the price of $13,509.50, of which $3,359.50 was paid, and for the residue ten notes of $1,015 each, payable to the Tractor Company monthly, with interest, were executed by the purchaser. This contract was filed in the office of the Clerk of the County Court of Preston County on November 7, 1942. No question is raised as to the validity of this contract, the lien thereof, or its filing in due time. Under the provisions of Code, 40-3-5, it was filed before any liens had accrued, or had been filed which in any wise affected the property involved in the said sale.
A number of payments were made on the notes mentioned above, but they were not made regularly, as required by the contract. In the meantime, the Fuel Corporation had become indebted to the Tractor Company for supplies and repairs; and, on September 13, 1943, in the Circuit Court of Monongalia County, the Tractor Company recovered a judgment against the Fuel Corporation for the sum of $1,835, and $15 costs, which judgment is alleged in the answer of the Tractor Company to have been docketed in Preston County on the ___ day of September, 1944, and execution issued thereon and recorded in the execution docket of said county, but there is no support for said allegation in the record.
In this situation, an agreement was reached between the Tractor Company and the Fuel Corporation some time prior to January 25, 1944, under which there was to be returned to the Tractor Company the scraper mentioned in the conditional sales contract aforesaid, at the sum of $4,309.20, with the understanding, as contended by the Tractor Company, that its judgment against the Fuel Corporation should be paid, and the balance applied to the payment, in part, of past due notes mentioned in the conditional sales contract aforesaid, and said payment was so applied. This alleged understanding as to the application of the return price of the scraper and the application aforesaid is contested by the Fuel Corporation, on the contention that the entire sum agreed to be paid for the return of the scraper should have been applied on the conditional sales contract notes. The testimony and circumstances bearing on this proposition will be hereinafter discussed. Subsequent to this transaction, and on June 1, 1944, the Fuel Corporation made a payment to the Tractor Company in the sum of $750, to be applied on note No. 6, under the conditional sales contract, but which note had, in fact, theretofore been paid to the Tractor Company. This being true, the Tractor Company, on the theory that no effective direction as to the application of the payment had been made, applied said payment, first, to the settlement of a current account against the Fuel Corporation, amounting to $373.30, and the residue on the unpaid outstanding notes under the sales contract. The application of this payment is of material interest only in respect to the ascertainment of the amount due from the Fuel Corporation to the Tractor Company under the conditional sales contract aforesaid.
In the meantime plaintiff, hereinafter called the 'Coal Company', had made a loan to the Fuel Corporation in the amount of $15,000, to be repaid at the rate of fifty cents a ton for each ton of coal mined by the Fuel Corporation. Later, by a so-called deed of trust, dated September 1, 1943, acknowledged September 11, 1943, and recorded in the office of the Clerk of the County Court of Preston County on September 22, 1943, the Fuel Corporation conveyed to the Coal Company certain personal property, including the tractor and scraper covered by the conditional sales contract in favor of the Tractor Company aforesaid. It will be noted that no trustee is named in this so-called deed of trust; and, also that while the certification of the acknowledgment is made under the seal of the notary public, there is no memorandum as to the date of the expiration of her commission as such.
On February 15, 1944, the Fuel Corporation sold the property included in the so-called deed of trust, aforesaid, to the plaintiff, the Coal Company, and executed a bill of sale to the said Coal Company, which has not been recorded. On the same day the Coal Company sold the same property to the Fuel Corporation, under a conditional sales contract, at the price of $14,000, which sales contract was filed in the office of the Clerk of the County Court of Preston County on March 13, 1944. In view of the claims for taxes, filed by the State and Federal Governments, it is important to keep in mind the date when the conditional sales contract last aforesaid was made, and the date when it was filed in the Preston County Court Clerk's Office.
In the meantime, certain property taxes for the years 1944 and 1945 on the property of the Fuel Corporation involved in this suit, amounting, as of the date of the decree appealed from to $176.13; contributions in the amount of $1,589.16 assessed by the West Virginia Department of Unemployment Compensation; and taxes in the amount of $1,255.78 assessed by the State Tax Commissioner of West Virginia, had accrued at the date of the institution of this suit, and taxes in favor of the United States, through its Collector of Internal Revenue, originally aggregating $4,876.09, but somewhat reduced by payments and consisting of taxes assessed as victory taxes, withholding taxes, unemployment taxes, and capital stock taxes. These taxes were made up in separate years and had accrued at separate dates. The assessments of these taxes were filed in the office of the Collector of Internal Revenue of the District of...
To continue reading
Request your trial