Coal River Navigation Co. v. Webb , 3 W. Va. 438 ( 1869 )

BERKSHIRE, J.

The most material question presented in this ease, is, whether the lien of the appellee’s judgment against the Coal River Navigation Company, under the facts appearing in the record, is superior to and has priority over the lien created by the deed of trust executed by said company, after the date of said judgment to secure its creditors, the appellee being one of them and included in the trust. ■

It is claimed on behalf of said company and its creditors that, as the appellee’s judgment was never entered on the judgment docket as required by law, he can have no lien as against the creditors of the company secured in said deed of trust, who, it is insisted, are purchasers for value without notice of the judgment.

The bill does not allege that said judgment was ever docketed, or that the creditors secured in the deed of trust had notice of the same.

The answer of the company neither denies nor admits that the trust creditors had had notice of the appellee’s judgment at the time of the execution of the trust, but it does deny that the appellee has any lien on account of his judgment and avers that he has no such lien, because the judgment was never entered on the judgment lien docket as required by law.

In the answer of Henry S. Kupp, however, one of the prinei-cipal creditors of the company secured in the trust, it is expressly denied that he had any notice or knowledge whatever, before or at the time the deed of trust was executed, of the ap-pellee’s judgment. And he claims priority over said judgment on this account and also on account of extensive and valuable repairs claimed to have been done by him, for and on the works of said company, for which his debt was created, and without which repairs it is claimed the works would have been of little or no value. There is no replication to either of their answers and they must, therefore, be taken as true (the defendants having taken no testimony in the cause) so far, at least, as they may not be contradicted by other matters in the cause introduced or relied on by the appellants.

It is insisted here, by the appellee, that the trustees and the creditors secured in trust had at least constructive notice of his judgment from what appears on the face of the deed of trust under which the creditors claim.

Among the debts described and securéd in the trust is one “to William EL Webb, of Kanawha county, the balance due on a judgment rendered in the United States District Court, held at Charleston, Kanawha county, in the spring of 1866. The said balance being now about two thousand dollars.”

This description, it will be seen, is quite full and accurate, and indicates with much accuracy, a knowledge of the credits on said judgment and the amount due on it at the date of the trust.

It seems to me, threfore, that the trustees and creditors claiming the benefit of the trust are clearly estopped and precluded by this plain and unambiguous recital in the deed from averring a want of notice of the appellee’s judgment at the time of its execution. Den vs. Carroll, 3 Johns. Cas., 174; Carver vs. Jackson, 4 Peters, 1; Wiley and others vs. Given and others, 6 Grat., 277; Hannon vs. Hannah, 9 Grat., 146; William Oliver and others vs. Piatt, 3 Howard, 333.

But it is also insisted by the appellants that the appellee should be held to have accepted the provisions of' the deed of trust and to claim under it by reason of his acquiesence in the payment out of the proceeds of the sale under the trust pending this suit, of the judgment against him in favor of Andrew Scott, administrator of John McGregor, amounting to 108 dollars and 04 cents, including debt, interest and costs.

This judgment, it appears, was paid by James L. Carr, one of the trustees, out of the proceeds of the sale of the property under said deed of trust, after a judgment had been rendered against him upon a suggestion of said Mc-Gregor's administrator and execution issued thereon.

There is nothing in the record tending to show that the appellee did acquiesce in, or have any notice or knowledge of the proceedings in the suggestion case or payment of the money, other than may be implied from the fact that the proceedings were of record in the same court in which this suit was pending.

From all that appears in the record, I do not think we can infer such notice and acquiescence in .this proceeding and payment on the .part of the appellee, as would require us to hold him, as having accepted the provisions of the trust and compel him to claim under it. ' On the contrary, his intention not to do so is quite apparent, for he not only utterly disclaims any such purpose in his bill, but it is conceded in his answer filed by “The Navigation Company of Coal Kiver,” being the new company that succeeded to the original company upon the sale under the trust, that the appellee refused to receive any share or per centage of the proceeds of the sale of the property under the trust, and this too, many years after he had instituted his suit and prior to the proceedings on the suggestion.

It is further claimed on behalf of the appellant Hupp, that his own debt, in equity, is to have preference to any other debt due from the company, inasmuch as it was created and accrued to him for the repairs made and done by him on its works, which repairs were indispensable to their restoration and profit. It is not perceived, however, upon what principle of law or equity this claim could be allowed to prevail over the lien of the appellee’s judgment.existing against the real estate of the company'- before these repairs were made.

An objection is also urged by the appellants as to the proof of the proper execution of the order of publication, as well as to its regularity and validity. The decree complained of recites that the order of publication as to certain nonresident defendants was returned “duly executed by publication in the Kanawha Valley Star, a newspaper in Kanawha county, Virginia, for four successive weeks, commencing on the 13th day of August, 1860.”

If this were all the evidence in the record of the due execution of said order, it would be clearly insufficient', as it does not show a compliance with the statutory provision which then required that a copy of such order should also have been posted at the front door of the court-house of the county of Kanawha, on the first day of the next "county court after the order was entered.

But by an affidavit of the publisher of said paper found in the record it appears that the order was duly published in the paper, as recited in the decree, and also that a copy of the same was posted by the said appellant, at the front door of said court-house, on the first day of the next county court of said county after the order was entered. If there was no other objection to the order, therefore, there would, as I tliink, be no error in the decree, so far as it is founded on it, notwithstanding the recital therein, as to the due execution of the order, would be insufficient in itself to establish it.

But the order, it appears, issued on the 11th day of August, 1860, and was therefore neither issued in court nor at rules as required by the 11th section of chapter 170, of the Code of 1860, p. 708, and as the clerk had no authority under the law to issue it at that time, it follows that it was a nullity and ought to have been disregarded by the circuit court.

The remaining objection urged against .the decree is that it was improper to decree a sale of the company’s property to pay said judgment without any inquiry as to the rents and profits of the real estate. As there is no averment in the bill or answers touching this question, nor proof showing that the rents and profits would not be sufficient to pay the judgment in five years, I think it was clearly erroneous to proceed to sell the property without first ascertaining whether the rents and profits would be sufficient to pay said judgment within the time required.

I am of opinion to reverse the decree and remand the cause for further proceedings.

The other judges concurred.

Decree reversed.