Paul v. Baugh

9 S.E. 329, 85 Va. 955, 1889 Va. LEXIS 110
CourtSupreme Court of Virginia
DecidedApril 4, 1889
StatusPublished
Cited by13 cases

This text of 9 S.E. 329 (Paul v. Baugh) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Paul v. Baugh, 9 S.E. 329, 85 Va. 955, 1889 Va. LEXIS 110 (Va. 1889).

Opinion

Lewis, P.,

delivered the opinion of the court.

This was a suit in the hustings court of the city of Peters-burg to set aside a certain deed of trust which was executed on the 1st of July, 1885, by the appellee, W. W. Baugh, conveying certain real estate, and the personalty thereon, in Surry county, to A. S. Edwards, trustee, to secure the payment of certain debts due by the grantor, and enumerated in the deed. Among these debts was one due to W. W. Baugh, Jr., a son of the grantor, evidenced by bond dated June 1, 1885, payable one year after date, for $490, and a debt due to John O. Baugh, another son of the grantor, also evidenced by bond dated June 1, 1885, and payable one year after date, for $380. These debts, with others, were put in the second class..

Among the creditors of the grantor, at the date of the deed, was the plaintiff in the court below, who is the appellant here. This indebtedness amounted in the aggregate to about the sum of $4,000, and for which judgments were obtained by the appellant at the July term, 1885, of the said court, which began the day after the deed was admitted to record in the clerk’s office of the county court of Surry county. The trustee, Edwards, as the counsel of the grantor, drew the deed, and, as clerk of the court, admitted it to record.

The appellant’s debt was placed in the third class. The provision of the deed in respect to it is that “ after paying the expenses of this trust and the debts aforesaid, then, thirdly, to secure to Peter Paul, of Richmond, Virginia, the payment of [957]*957the sum of two thousand dollars, which the said W. W. Baugh has agreed to pay to him in full compromise of all differences between them, which sum shall bear interest from the date of this deed until paid.”

The bill seeks to avoid the deed on the ground of fraud, and it makes the trustee and the creditors (other than the appellant) secured in the deed parties defendant. It charges that the deed was made with intent to hinder, delay, and defraud the plaintiff, and that the debts secured to the two sons of the grantor, above-mentioned, are fraudulent and void. And sundry alleged badges of fraud are set forth in the bill.

The grantor, who was also made a defendant, answered the bill, denying the charges of fraud, as did the trustee and the rest of the defendants.

The cause was in due time referred to a master commissioner to take—(1) an account of all the property, real and personal, of the grantor at the date of the deed, and to ascertain and report its fee simple and annual value; (2) an account of the liens thereon, with their dignities and priorities; and (8) to make inquiry and report as to all the facts connected with the alleged fraudulent character of the deed.

The commissioner, in execution of this decree, examined a number of witnesses, and reported in favor of the validity of the deed and of the debts secured thereby. To this report the plaintiff excepted. The exceptions, however, were overruled, and the deed sustained in toto by the decree complained of.

One of the grounds upon which the deed and the debts therein secured to the sons of the grantor were charged to be fraudulent was, that before the commencement of the actions in which judgments were obtained by the appellant against the grantor, and pending those actions, the. grantor threatened that if the actions were pressed he would take steps to protect himself, and that about the same time, in conversations with the attorney of the appellant, he stated what he said was about the amount of his indebtedness, but made no mention of any indebtedness on [958]*958his part' to his sons, or to either of them. And great stress was laid in the argument upon this point.

The mere fact, however, that the deed was made during the pendency of the actions, and under the circumstances just mentioned, does not affect the validity of the deed, in the absence of fraud, and we do not discover in the record any evidence to sustain the charge of fraud, which to avail in such a case, must always he proved with clearness and certainty. Matthews v. Crockett, 82 Va. 394; Hickman v. Trout, 83 Id. 478. This court has repeatedly decided that the execution of a deed, pending a suit against the grantor by a creditor, and a short time before the term at which it was probable judgment would be rendered against him, does nob of itself vitiate the deed, and that a debtor in failing circumstances may make a valid assignment for the benefit of his creditors, and may make preferences as between them. To make such preferences is neither illegal nor immoral when not prohibited by statute. Brooks v. Marbury, 11 Wheat. 78; Skipwith v. Cunningham, 8 Leigh, 271; Sipe v. Earman, 26 Gratt. 563; Gordon v. Cannon, 18 Id. 387; Williams v. Lord & Robinson, 75 Va. 390. Besides, even if there ha'd been fraud on the part of the grantor, such fraud could not affect the rights of the trustee and the creditors secured by the deed, without notice of the fraud, and no such notice is proved. 2 Lom. Dig. 323; Rixey v. Deitrick, ante, p. 42, and cases cited.

The evidence in the case not only fails to establish the charge that the debts to the sons of the grantor are fictitious and fraudulent, hut it shows the contrary. Both deny the charge in their answers, and also in their depositions, which were taken. It seems that the bonds by which their debts are evidenced were written when the deed securing them was prepared, and were antedated one month. But this is explained by the trustee in his deposition, who also wrote the bonds for the debtor to sign, and it does not appear that either of the sons were aware of the fact that the bonds had been antedated. The debts were due more than a month before the date of the deed, [959]*959and the fact, therefore, that the bonds were antedated is not a circumstance of any significance as tending to prove fraud.

It is also true the debts were not listed for taxation, but that does not prove that they were fraudulent, although, standing alone, it would be a circumstance of suspicion. Moore v. Ullman, 80 Va. 317. There is no explanation in the record as to why they were not listed, but the uncontradicted evidence shows that they are bona fide. The items and dates of the advances from time to time made by the sons, respectively, to their father, who were doing business on their own account, and not residing with their father, are given with particularity, and the statements of W. W. Baugh, Jr., as a witness are in large measure corroborated by the witness, Barney. We lay out of view the declarations of the debtor upon which the appellant relies, because they were not made, in the presence of or assented to by the sons, and are not evidence against them.

Nor can the objection to the deed be sustained on the ground that it reserves to the grantor a power incompatible with and adequate to the defeat of the avowed purpose of the deed. It provides tha’t until the maturity of the aforesaid bonds to the sons of the grantor—namely, eleven months after the date of the deed—the grantor shall remain in possession of the property conveyed, and take the profits thereof to his own use, and then sale to be made by the trustee, if requested by any creditor, etc. Such a provision is a common one in deeds of trust to secure creditors, and does not of itself invalidate the deed.

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Bluebook (online)
9 S.E. 329, 85 Va. 955, 1889 Va. LEXIS 110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paul-v-baugh-va-1889.