Wallace's Adm'r v. Treakle

• Decision Date: 27 April 1876
• Citation: 68 Va. 479
• Court: Virginia Supreme Court
• Parties: WALLACE'S adm'r & als. v. TREAKLE & als.

68 Va. 479

WALLACE'S adm'r & als. v. TREAKLE & als.

Supreme Court of Appeals of Virginia.

April 27, 1876

1. Creditors at large who file a bill to set aside a deed of their debtor conveying land as fraudulent, and succeed, have a lien on the land for their debts from the filing of their bill.

2. The deed of H for land is set aside as fraudulent at the suit of some of his creditors, and there is a decree after the death of H for the sale of the land, and for account of the debts of H, and their priorities. The report shows that there was one judgment against H before the deed was made. Some of the plaintiffs in the bill were creditors by judgment, one a creditor at large; a number came in by petition before the decree; and a number came in before the commissioner, and by petition after the decree. In distributing the fund, it is to be applied, 1st. To pay the judgment recovered before the deed was made. 2d. To the judgments recovered before the bill was filed. 3d. To the creditors at large who joined in the bill. 4th. To the creditors by petition before the death of Henderson, in the order in which their petitions were filed 5th. To all the other creditors pro rata.

3. Though in this case there was a decree for the sale of the land, and a sale before an account of the debts was taken the sale of the land will not be set aside upon the objection of some of the creditors who came in after the decree, made years after the sale, when it is obvious the land would not sell for as much as it had sold for before, and which was more than some of these creditors had expressed their willingness to take for it.

By deed bearing date the 20th of April 1866, William Henderson, Sr. of Lancaster county, conveyed to his son, William Henderson Jr., five hundred acres of land and one-half of his stock of horses, cattle, sheep, & c. In consideration of which William Henderson, Jr., executed to him ten bonds of $300 each, payable with interest in one, two, & c., to ten years, and conveyed the property purchased in trust to secure the payment of the bonds. And by a deed of the same date, William Henderson, Sr., conveyed to his son, Charles E. Henderson, three hundred acres of land, including the dwelling house, & c., and one-half of his stock of horses, cattle, sheep, & c., for the same price, to be paid and secured in the same way.

By deed of the same date, William Henderson, Sr., conveyed to Warner Eubank three or four other tracts of land, and all the bonds of his two sons, except the first due of each, in trust to pay all his debts in which he was principal debtor, placing them all on the same footing. All these deeds were admitted to record on the 23d of April 1866.

On the 18th of September 1866, John S. Treakle, who sued for himself and four others, filed his bill in the circuit court of Lancaster county, in which he alleged that they were creditors of William Henderson, Sr.; himself and three of the other parties, by judgments recovered on the 25th of August 1866, and the fourth by bond. He charged that the deeds to William Henderson, Jr., and Charles E. Henderson, were fraudulent, intended to hinder and delay the creditors of the grantor; and he prayed that they might be set aside, and the property conveyed in them might be sold and applied to the payment of the plaintiffs' debts.

On the 7th of November 1866 the death of William Henderson, Sr., was suggested, and the suit was revived against his administrator.

In November 1867, William Henderson, Jr., and Charles E. Henderson, filed their answer denying the fraud, insisting the price they were to pay was the full value of the property. A number of depositions were taken by the defendants, which went to sustain the deeds; but the cause coming on to be heard on the 18th of April 1868, the court being of opinion that the deeds from William Henderson, Sr., to his sons, having been executed on the same day with the deed of trust to Eubank for the benefit of his creditors, the said deeds constituted one and the same transaction, and that the deeds to the sons were fraudulent, it was decreed that they be set aside, and that William and Charles E. Henderson should surrender the personal property conveyed to them by said deeds to commissioners named, who were directed to sell the property, real and personal, in the bill mentioned, upon a credit of one, two and three years, except enough to pay the costs of the suit and the expenses of sale. And a commissioner was directed to take, among others, an account of all outstanding debts of William Henderson, Sr., secured by the deed to Eubank, with the priorities, if any, of the said debts growing out of liens upon the real estate conveyed to the sons.

On the 1st of October 1868 the commissioner returned his report. He reported that the outstanding debts and liabilities of William Henderson, deceased, that had been exhibited to him, and proved to his satisfaction, amounted to the aggregate sum of $24,862.32, including interest to the date of the report; of which amount $24,128.05 was secured by the deed to Eubank. That there were judgments obtained before the death of William Henderson, deceased, amounting to $3,789.94; and a judgment of $24.45 after his death. One of these judgments was recovered in 1861, and the others, except the last, were recovered in August 1866. There were exceptions to this report, but it is not necessary to state them.

It appears that a number of petitions were filed by creditors of Henderson, to be admitted parties in the cause, but they are, with one exception, omitted from the record; the time or order of their presentation does not appear. The commissioner states, that creditors, whose debts he states, amounting to $11,161.19, joined in the suit; but this must have been by petition, as the debts of the plaintiffs named in the bill did not amount to more than $6,000.

At the November term 1868, R. A. Claybrook and three others, whose debts were stated in the report of the commissioner, presented their petition in the cause, in which they insist there was error in the decree of the 18th of April 1868, because there was no enquiry in order to ascertain the outstanding liabilities against the estate of Henderson, and no enquiry to show the order of priority in which the debts should be paid, before the decree directing the sale; and they pray that the said decree be reheard in behalf of the petitioners; and that a majority of Henderson's creditors may be permitted to adopt, if they prefer, the deeds made by the said Henderson in his lifetime to his sons.

The cause came on to be heard on the 10th of October 1871, and the report of the sales of the real and personal estate having been confirmed by a former decree, the court rejected so much of the petition of Claybrook and others as asked that a majority of the creditors might be allowed to adopt the deeds which had been set aside in the cause, and decreed that the sales of the real estate of Wm. Henderson, deceased, which was conveyed to his sons, to the amount of $3,789.94, with interest from the 1st of October 1868, paid, or so much thereof as might be then in the hands of Robert A. Mayo the receiver, be applied as follows, viz: To the payment in full of the judgment recovered in 1861, and the balance remaining in the hands of the receiver ratably between the judgments recovered in August 1866. And the commissioner was directed to take a further account of the outstanding debts of the estate of Wm. Henderson, and also an account of the entire amount of assets to be distributed in the cause, and apportion the same among all the debts secured by the deed of trust.

The commissioner reported additional debts to the amount of $1,184.98 in which Henderson was surety. And he says there are...