Phippen v. Durham

8 Va. 457
CourtSupreme Court of Virginia
DecidedJanuary 15, 1852
StatusPublished

This text of 8 Va. 457 (Phippen v. Durham) 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
Phippen v. Durham, 8 Va. 457 (Va. 1852).

Opinion

MONCURE, J.,

after stating the case, proceeded:

If the question were res integra, “Whether a deed of trust conveying all the property of a debtor for the benefit of such of his creditors as may within a specified time release him from all further claims; and providing that the surplus of the trust fund after satisfying the accepting creditors should be paid to the debtor, is valid against the creditors who do not accept?” I would be inclined to answer it in the negative. While the many cases on this subject are conflicting, I think the preponderance is against the validity of such a deed. The cases are collected in 1 American Leading Cases, p. 69-85. This Court however has decided in favour of the validity of such a deed; Skipwith’s ex’or v. Cunningham, 8 Leigh 271; and while I do not approve, I yet bow to the authority of that decision. That case expressly recognizes the distinction taken by Chancellor Kent in Seaving v Brinkerhoff, 5 John. Ch. R. 329, that to make such a deed valid it must convey all, and not a part only, of the debtor’s property. And as the deed in this case does not profess to convey, and did not in fact convey, all of the debtor’s property, it might be contended that the deed *was on that ground invalid. The property' however not included in the deed, was probably of small value, consisting, as appears from the schedule, of choses in action to the amount of 131 dollars 65 cents, an interest in lands lying in western Virginia, forfeited for nonpayment of taxes, three old stoves &c., and it would therefore perhaps be proper to say in this case, as was said in the case of Skipwith’s ex’or v. Cunningham, that “the deed essentially complies with the requirements of the law.”

But conceding that such a deed may be valid, it is certainly important to its validity that the creditors who claim the benefit of it should take no unfair advantage of the other creditors. The transaction in its very nature requires the utmost fairness in the dealings of the parties with each other. A debtor in' failing circumstances proposes to surrender all his property for the equal benefit of all his creditors who will release him from all further claims; and he executes and puts on record a deed for that purpose. His object is to obtain a release from all his creditors, and to .be disembarrassed in his future operations; and he offers, as the price of this relief, to make a full and fair surrender of all his property, and to place his creditors on the footing of equality, It is proper that his creditors should be notified of his offer a reasonable time before the expiration of the period limited for its acceptance, in order that they may obtain such information as will enable them to exercise their choice with' discretion. It is proper that the creditors should have an opportunity of acting in concert; and it is natural and reasonable that they should so act. In this case it was especially so; as, when the deed was executed, it was extremely doubtful whether it would be valid if accepted. The deed bears date the 12th of May 1837. The case of Skipwith v. Cunningham was decided at April term 1837. If decided at the date of the deed, the decision was not "then reported, and could only have been known to a very few. At that time many counsel would have advised that such a deed would be invalid; and all would have advised that its validity would at least be extremely doubtful. Whether such a deed would be invalid, or of doubtful validity, it would have been unwise in the creditors to accept it; for by accepting it they would have tied their own hands, and might have defeated the very object they had in view. In this case therefore there was a double motive for concert among the creditors; and accordingly the evidence shews that they did' act in concert; at least so far as to determine among themselves that they would not accept the deed. Durham proves that about ten days after the deed was executed, Mr. Crane a creditor, stated that he had examined the deed, was not satisfied with it, and did not consider it good for any thing; and proposed that another deed with different provisions should be executed. To this proposition Durham assented, and at Crane’s instance went to see the other creditors. The first he saw was Phippen, who approved the arrangement proposed by Mr. Crane, expressed his willingness to do whatever the other creditors thought most advisable, and declared that he would not sign the deed that had been admitted to record. After this express disclaimer of the deed by Phip-pen, it may be doubted whether he could retract his disclaimer and accept the deed. But certainly he could not do so without informing the other creditors in time to enable them to accept the deed within the 30 days.

Now if the claim of the schedule creditors stood alone upon the evidence of Durham, supported as it is by corroborating circumstances, I would regard it as not overthrown by the only countervailing evidence in the case, which is to be found in the answer of Phippen. It is contended that that answer is responsive to the bill and can only be overthrown by the evidence of *at least two witnesses, or one witness and corroborating circumstances. I do not consider that answer entitled to so much weight. It was not filed until about five years after the bill and the answer of Mieure, and four years after the depositions of Durham and Mieure were filed. In all of these documents it was ex[593]*593pressly charged or proved that Phippen, or Mallory & Phippen, had consented that the deed should be inoperative, and that they were guilty of a fraud in afterwards accepting the deed or attempting to set it up for their benefit against the other creditors. Such a charge if untrue should be promptly denied; and if the denial be long postponed, it must lose its weight in the same proportion. The answer too is brief and general, though the charge is full and specific. On the other hand the evidence of Durham is corroborated by the circumstance already stated, that what he proves might naturally and reasonably have been expected to occur; and by the further circumstance, that the conduct of the non-accepting creditors is almost inexplicable on any other hypothesis. They probably would not have remained quiet but for an agreement or understanding among all the creditors that the deed would not be accepted. But for such an agreement or understanding, it is hardly credible that (the debtor and creditors residing in Richmond where the deed was recorded), the debtor and non-accepting creditors, or some of them, would not have gone to the clerk’s office on the last of the 30 days to see if any of the creditors had signed the deed.

But the claim of the schedule creditors does not stand alone on the evidence of Durham, supported as it is by corroborating circumstances. Mieure proved that some days previous to the last day upon which, according to the terms of the deed, the creditors had a right to sign it, all the creditors therein named, as deponent believed, and certainly Mallory & Phip-pen, *determined not to accept the deed, but to suffer it to be inoperative by the expiration of the 30 days without signing the same. Deponent was confident that this was the understanding and agreement among all the said creditors.

Now here are two witnesses positively testifying to a fact which is decisive of this case, to wit, the fact that within the 30 days the creditors, and certainly Phip-pen, agreed not to accept the deed, and if the answer of Phippen had denied this fact in the most positive and explicit terms, and were entitled to all the weight to which an answer can be entitled, it would be insufficient to resist the force of the concurring testimony of these two witnesses.

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Bluebook (online)
8 Va. 457, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phippen-v-durham-va-1852.