Hogg v. McGuffin

77 S.E. 552, 72 W. Va. 86, 1913 W. Va. LEXIS 14

• Court: West Virginia Supreme Court
• Decided: February 25, 1913
• Status: Published

Opinions

Williams, Judge:

After the case of Hogg v. McGuffin, 67 W. Va. 456, was decided by this Court, Gory Hogg died his amended or supplemental bill in the circuit court of Mercer county, setting up the fact that the money had been collected by the Citizens National Bank of Cha-rleston, on the Dixon notes payable to McGuffin, which had been deposited with it for collection in the manner and according to the agreement described in the former opinion in this cause, and prayed for a decree against the bank, directing it to pay to him the sum of $16,620, with interest, in discharge of the decree rendered in his favor by this Court. Thereupon the bank and M. M. Williamson, trustees, tendered their answer, and cross-bill in the nature of a bill of interpleader, setting up the fact that a number of the creditors of McGuffin-had obtained judgments and executions before the rendition of the decree by this Court in favor of Hogg, alleging that it had been .garnished by a number of said creditors, whose debts are set out in the cross-bill, and prayed that they might be brought into the ■suit, and required to litigate with Hogg their respective claims •of priority to the fund, to the end that the bank, as trustee and stakeholder, might be protected in the disbursement of said funds. Plaintiff objected to the filing of so much of the answer as was intended as a cross-bill and called for affirmative relief, and the court sustained the objection, but allowed the paper to be filed simply as an answer to the bill, and heard the cause on amended bill, answer and general replication thereto, and decreed that the bank pay to Hogg the sum above stated. From that decree the Citizens National Bank and M. M. Williamson obtained this appeal.

The bank in its answer admits that it has in its hands $58,141-28 collected on the Dixon notes payable to McGuffin. It was a party to Hogg’s original bill, and, therefore, knew that Hogg’s equitable claim to a part of the funds in its hands was superior to the liens upon such part, claimed by any of McGuffin’s creditors. The decree of this Court determined that fact. Hogg was not claiming the right simply to charge the fund with a debt; he was claiming the fund itself, or rather so much of it as wa.s derived from the sale by McGuffin to Dixon of fifty shares of stock in the Harvey Coal & Coke Company; and the court decreed that $16,620 of the fund belonged to Hogg, by virtue of his contract with McGuffin, giving him the right, for two years from the time he had purchased from McGuffin the fifty shares of stock in the Pike Collieries Company, to return those shares and receive from McGuffin a like number of shares in the Harvey Coal & Coke Company in lieu thereof. Hogg decided within the two years to make the exchange of stock, but McGuffin had in the meantime sold it to S. Dixon, an innocent purchaser, without notice of Hogg’s equity, and the court could not decree specific performance of McGuffin’s contract, but held that Hogg had an equitable claim to the fund derived from the sale of the stock, and could follow it up. The funds were then in the form of notes payable to McGuffin, in the hands of the bank for collection ; they had not passed into the hands of an innocent holder for value, and out of Hogg’s reach. The notes were still Mc-Guffin’s property, in the hands of the bank, at the time Hogg brought his suit in Mercer comity and made the bank a party to it. Hogg’s title to $16,620 of the fund while only an equitable one, was superior to McGuifin’s, and, being superior to the debt- or’s title, his creditors could acquire no liens upon it. It is a familiar principle of law that the creditor can acquire no greater right in respect,to the debtor’s property than the debtor himself has. The former decision, in effect, held that McGuiHn sold stock in the Harvey Coal & Coke Company which virtually belonged to Hogg, and that he ivas bound to turn over to Hogg the proceeds thereof. Hogg’s right was a property right, and was necessarily superior to any lien that a creditor of McGuffin could acquire on the funds. Hogg’s right was to the stock itself, from which the fund was derived, and no liens were acquired before the stock was sold;' all the liens averred in the cross-bill to exist were acquired after that time. The bank would have taken no risk in turning over to Hogg his portio'n of the fund, and it should have done so.

But, it is insisted, the bank could not safely turn over the funds except upon order of the circuit court of Fayette county; and this for the reason in July, 1909,- that court had directed the bank to hold the fund subject to that court’s order. It appears that a number of suits were pending in the circuit court of Fay-ette county against said McGuffin; to some of which the Citizens National Bank appears to have been a party, and that on the 13th day of June, 190*9, an order was made in those causes which seem to have been heard together, directing the bank, upon payment to it of the Dixon notes, to turn over to him the stock which he had deposited as security for the payment of the notes and further directing it, as special receiver for the purpose to hold the money and not pay it out, except by order of the court. But long before that order was made, ITogg had brought- this suit in the circuit court of Mercer county, and had made the bank a party defendant. Process to answer the bill was served on it on the 21st of December, 1907. The bank was, therefore, subject to the jurisdiction of the circuit court of Mercer county long before it was appointed special receiver for the Fayette circuit court, and was bound to obey the decree of the former court. The circuit court of Fayette county could not oust the Mercer court of its jurisdiction by an order subsequently made.

The decree will be affirmed, but without prejudice to the rights of the creditors claiming liens, by attachment or execution, on the residue of the funds in the hands of the bank, and without prejudice to any rights the bank may have to have the priorities of liens determined among the cerditors of E. M. McGuffin, deceased, before making disbursement thereof.

Affirmed.