Tingle Adm'r v. Fisher

20 W. Va. 497, 1882 W. Va. LEXIS 59

• Court: West Virginia Supreme Court
• Decided: November 11, 1882
• Status: Published

Opinion

JOHNSON, PRESIDENT,

announced the opinion of the Court:

The only question to be decided is: Who is entitled to the fund in dispute, the administrator of the estate of James H. Eorsyth, or Logan D. Wallace? In deciding this question, the first enquiry is: Did the writing by Robert Eor-syth on the copy of the trust-deed of January 17, 1856, assign any interest in the debt, secured to said Robert in the deed from Culbertson and wife to Updegraff, trustee, which was executed on the 4th day of August, 1868 ?

It is asserted by counsel for appellee, that no interest m the debt secured by the trust to ITpdegraff passed by that assignment because the language there used, does not describe the debt, which was subsequently assigned to Logan D. Wallace. In the ease of Shirras v. Caig, 7 Cranch. 50, Marshall C. I. says of the description of the debt in that case : “It is true that the real transaction does not appear on the face of the mortgage. The deed purports to secure a debt of thirty thousand pounds sterling due to all the mortgagees. It was really intended to secure different sums due at the time, to particular mortgagees, advances afterwards to be made and liabilities to be incurred to an uncertain amount. It is.not 'to be denied, that a deed, which misrepresents the transaction, it'recites, and the consideration, on which it is executed, is liable to suspicion. It must sustain a rigorous examination. It is certainly always advisable, fairly and plainly to state the truth. But if upon investigation the real transaction shall appear to be fair, though somewhat variant from that which is described, it would seem to be unjust and unprecedented to deprive the person claiming under the deed of his equitable rights, mil ess it be in favor of a person, who has been in fact injured and deceived by the misrepresentation.

The rule in ethics as well as law is, that when the terms of a promise admit of more senses than one, the promise is to bo performed in that sense, in which tho-promissor apprehended it at the time the promissee received it. White v. Hoyt et al., 73 N. Y. 511. As a rule the interpretation of written instruments is with the'court as a question of law; but where the interpretation depends upon the sense, in which words are used, or the sense, in- which the promissor had reason to believe the promissee understood them,-a fact to be determined by the relation of the parties and the • surrounding circumstances, it would seem that it became a mixed question of law. and fact. White v. Hoyt et al., 73 N. Y. 512.

In Eacho v. Cosby, 26 Gratt. 112, a deed of trust was made “to secure to Edward I). Eacho of the city of Richmond the payment of the sum of one thousand dollars .due by note drawn--by the said Andrew J. Cosby and payable eleven months after date, and negotiable and payable at the Planter’s National Bank of Richmond.” It was ascertained, that the note was not executed by A. J. Cosby. Nevertheless, as it appeared, that there was a debt owing by Cosby to Eaclio, the description in the deed was rejected to give effect to the security; for it was manifest from the circumstances, what the parties must have intended.

Mr. Justice "Wayne in delivering the opinion of the court in Spain v. Hamilton’s administrator, 1 Wal. 624, said: “To constitute an assignment of a debt or other chose in action in equity no particular1 form is necessary. A draft drawn by A or B in favor of C for a valuable consideration, amounts to a valid assignment to C of so much of the funds of A, in the hands of B. Any order, writing or act, which make an appropriation of a fund, amounts to an equitable assignment of the fund.

Under these authorities, taking all the surrounding circumstances into consideration, is there any doubt, that Robert Forsyth intended to assign to his father forty-five hundred dollars of the indebtedness of Thomas G. Culbertson to him, which was secured to him in the deed of trust, from Culbertson and wife, to Updegraff, trustee ? True, he did not correctly describe the debt. The language is: “I hereby assign and transfer to him as security therefor, all my right and claim under the deed of trust, of which the foregoing is a copy.” It must be remembered, that while it is true, that that deed of trust had boon released, as to Robert, by his joining in the conveyance to Culbertson on the 4th day of August, 1868, yet on that same day Culbertson and wife executed the deed of trust to Updegraff, in which the same debt to Robert was secured. Long subsequent to this when the assignment in 1871 or 1872 was made to James H. Forsyth by Robert, both were perfectly familiar with the debt, which had been secured by the deed of 1856, and the new security taken therefor in 1868; and there can be no doubt, that when Robert made the said assignment, he intended to appropriate to his father, of that debt four thousand five hundred dollars with interest thereon from May 31, 1871, and that James II. Forsyth so understood and so accepted it. It would be taking in a court of equity, a very narrow technical view to hold, that inasmuch, as there was in ■the deed, on a copy of which the assignment was written, at that time no debt secured, therefore it was not intended, that any debt should be assigned. That deed had been the representative of the debt. The debt was still due to Robert and secured by another trust, and it was an appropriation of a part of that debt.

■But it is claimed, there was no consideration for the assignment. The previous indebtedness of Robert to his father, there expressly admitted was ample consideration. The assignment of four thousand five hundred dollars of the debt, and interest thereon, carried with it by operation of law as an incident the deed of trust, by which the money was secured to be paid. Gwathmeys v. Ragland, 1 Rand. 466; McClintic v. Wise’s Adm’r., 25 Gratt. 448; Grubb v. Wysor, 32 Gratt; 127; Gregg v. Sloan and als., 6 Va. Law Jour. 607. Robert Forsyth having first assigned four thousand five hundred dollars with interest from May 31, 1871, of the debt secured by the trust deed to Updegraff, this carried with it so much of the said lien, as is necessary to pay it. McClintic v. Wise’s Adm. siqora. Having made this assignment, be could not again assign it to "Wallace, so as to give Wallace a right thereto, unless by the laches of James II. Forsyth, he lost his right thereto.

It is claimed by counsel for appellee, that the second assignment will take the whole fund, because, no notice of the first was given to the debtor, before 'the second assignment was made. I find no authority, which holds, that the second assignee must be notified, except those that require assignments to be recorded. In no other way could notice be brought home to the second assignee, unless it would be through the debtor. Is it necessary to notify the debtor? TJpon this question there is conflict of authority. In Judson v. Corcoran, 17 How. 615, Mr. Justice Catron in delivering the opinion of the court, said : “ The assignment was held up, and operated as a latent and lurking transaction calculated to circumvent subsequent assignees; and such would be its effect upon Corcoran, were priority acceded to it under our decree. It is certainly true as a general rule, as above stated, that a purchaser of a chose in action, or of any equitable title, must abide by the case of the person from whom he Rays, and will only be entitled to the remedies of the seller; and yet there may be cases, in which a purchaser, by sustaining the character of a bona fide assignee, will be in a better situation, than the person was of whom he bought; as, for instance, when the purchaser, who alone had made inquiry, and given notice to the debtor, or to a trustee holding the fund, (as in this instance) would be preferred over the prior purchaser, who neglected to give notice of his assignment and warn others not to buy.”' He cites as sustaining the proposition Dearie v. Hall and Loveridge v. Cooper, 3 Russell 1, 60; Mongles v. Dixon, 1 McNaughton & Gordon, R. 437; Bayley v. Greenleaf, 7 Wheat. 46; Murray v. Lylburn, 2 John. Ch. C. 442. lie also claims, that the same principle was applied in Moore v. Holcombe, 3 Leigh 597.

I do not think the last case in point; that was a bill in equity to subject land to sale, for the purchase-money an equitable lieu, of which the purchaser had no notice was attempted to be set up. The principle that the purchaser ot real estate without notice of an outstanding equity, takes it discharged of such equity, has no application in the case of a purchaser of a chose in action. Summers v. Hutson et al., 48 Ind. 230.

The doctrine held in Judson v. Corcoran, is also sustained by Spain v. Hamilton, 1 Wall. 604; Mott v. Clark, 9 Barr. 399; Ward v. Morrison, 25 Vt. 593; White v. Prentiss, 3 Mon. 510; Bloomer v. Henderson, 8 Mich. 395, and a number of authorities to the same effect cited in Leading Cases in Equity, vol. 2, part 2, 1165-6. Many authorities are found which hold directly to the contrary. Muir v. Schenck, 3 Hill 228; Schafer v. Riley, 50 N. Y. 66; Moore v. Metropolitan Bank, 55 N. Y. 41; Greentree v. Rosenstock, 61 N. Y. 593; Trustees v. Wheeler, Id. 104; Summers v. Hutson, 48 Ind. 230; Wakefield v. Martin, 3 Mass. 558; Dix v. Cobb, 4 Mass. 508; Wood v. Partridge, 11 Mass. 488; Providence County Bank v. Benson, 24 Pick 204; Martin v. Potter, 11 Gray 37; Richards v. Smith, 9 Gray 315; Kingman v. Perkins, 105 Mass. 111; Thayer v. Daniels, 113 Mass. 132; Newby & Taylor v. Hill Million, 2 Met. (Ky.) 530; Kamena v. Huelbig & als., 23 N. J. Eq. 78, and cases cited in Leading Cases in Eq. vol. 2, part 2, 1166.

In the 2d vol. Leading Oases in Equity 1667, it is said: “It is now established in England contrary to the earlier decisions, that the failure to give notice, of an assignment is immaterial, as regards one claiming under the assignor as a creditor or volunteer it being a general, if not invariable rule, that one cannot give, what he could not justly hold, and that the right of a creditor, does not rise higher than that of the debtor, and is subject to all equities that could have been enforced against him.” In support of the above the following-authorities are cited: Bishman’s Eq, § 168, Beavan v. Earl Oxford, 6 De Gex M. & G. 492; Kendricky v. Jervis, 22 Beavan 1; Bickering v. The Ilfeacombe Railroad Co., 3 L. R. C. P. 235, 248.

In Gwathmeys v. Ragland, 1 Rand. 466, it was held that, where a debtor executes several notes to his creditor and gives a deed of trust to secure their payment, and the first note is paid, and the creditor assigns the second note to a third person without assigning the deed of trust, and then assigns the third note to another person together with the deed of trust, the assignor of the second note is entitled to be first satisfied out of the trust fund. In delivering the opinion of the court Judgé Brooke said: “The deed being assigned to the appellants, gave them full notice of the order, in which the notes were to be paid to Barrett or his assigns, and at least put them on enquiry, whether the first and second notes had been paid at the time, they took the assignment of the third note and the deed of trust. By not making that enquiry, if they relied on the trust-fund, as security for the payment of the notes assigned them, they may have lost their money. However that may be, as against the appellee, to whom no negligence or fraud is imputable, the Court is of opinion, they have no claim to be.preferred.” Here, there is no pretense that the assignor of the second note gave notice to the debtor of the assignment to him.

In McClintic v. Wise, 25 Gratt., W. sold land to M. retaining the title for four thousand one hundred dollars cash, one thousand dollars, and three bonds payable January 1, 1858, 1859 and 1860. The first was paid to W. He transferred the bond due January 1, 1860, to S. in May, 1859, who assigned it to II. W. died in possession of the bond duo January 1,1859. His administrators sued M. in equity to subject tbe land to pay tlie bond beld by W. at his death, without making S. or H. a party. The land was sold by a commissioner to J. for two thousand dollars, and the sale -was confirmed, and commissioner was directed to collect the money and pay the plaintiffs. H. upon his petition is made a defendant in the suit, and files his answer, claiming, that his bond is still unpaid, and that he is entitled to priority of payment of the land. The administrator filed an answer insisting, that II. had lost his right to subject the land by his laches in not suing' M. who had in the meantime become insolvent. The decree gave prirority to plaintiffs; and H. appealed ; it was held, that II. was entitled to be first paid out of the proceeds of the land. It was further held, that when there are several debts secured, and there are successive assignments of them, the first assigned carries with it so much of the lien, as is necessary to pay it, unless it is expressly provided otherwise. See also, Grubb v. Wysor, 32 Gratt. 127.

In Gregg v. Sloan et als., 6 Va. L. Journal 607, it appeared, that merchants of Forth Carolina made a deed conveying to trustees all their property for the benefit of their creditors. Apiong other things embraced in the deed was a chose in action due by a debtor in Vii’ginia and secured on real estate in Virginia, subsequent to the making and recordation of the deed in Forth Carolina, but prior to its recordation in Virginia, a creditor of the grantees living in Virginia filed his bill and attempted to attach the chose in action, and bond conveyed to secure it. In a contest between the grantees in the deed and the attaching creditors it was held, that the chose in action and security for its payment passed by the deed to the trustees, and the deed being prior to the attachment prevails over it. Neither in this, nor the other Virginia cases which we have cited, were there any claim, that notice to the debtor would make any difference, as between the prior and subsequent claimants of the fund; but the principle in all the cases prevails, that where the equities are equal, he, who 'is first in time has the better right.

Judge Green said in Garland v. Richeson, 4 Rand. 270: “If the court had held, that the legal title to the debt passed by the assignment, then they could not have held, that any equity against the bond not coming within the description of discounts could bind the assignee without notice of the equity; as, if the equity was founded on a fraud in the consideration of the bond, this could be no defense at law, not being a discount; and after judgment for the assignee at law, if the debtor applied for relief on that ground to a court of equity, a plea, that the assignee was a bona jicle purchaser of the legal title to the debt secured by the obligation without notice or any equity, would be a complete defense, on the maxim, of the court of equity, which is without exception, that he, who has -the legal title and equal equity, must prevail in that court; and a purchaser without notice has a perfect equity. But where a purchaser acquires only an equitable title, the maxim is, qui prior est tempore, potior estjure.

In Clarke v. Hogeman, 13 W. Va. 730, we said: “The only party entitled to notice of the assignment, and the only party who not having notice, for that reason would be protected is the judgment-debtor.” Bank v. Gettinger, 3 W. Va. 317. Harrison v. Farmer’s Bank, 9 W. Va. 424. So we say here, if no notice had been given to the debtor by J. II. For-syth or by his administrator, and the debtor had paid the debt to the second assignee, the debtor would have been discharged. AYe see no countenance given in the Virginia authorities to the doctrine, that to perfect the claim of an assignee of a chose in action against a subsequent assignee of the same debt, notice to the debtor is necessary. It is true, that it has been frequently held elsewhere, as we have seen, that in such a case notice to the debtor is necessary to give the first assignee a right to the debt. There is no legal claim to the chose in action assigned in this cause, in either of the assignees. The equities being equal, the first assignment to the extent thereof will take the fund. But it is claimed by counsel for appellee, that the recordation of the assignment by AVallace, will give him a right to the debt secured by the trust-deed, as against Forsyth’s administrator, the first assignment not being recorded. There is nothing in this position. The assignment of a chose in action, whether special or general, is not required to be recorded. Our recording acts are the same as the recording acts in, Virginia; and it has been expressly held in that State, that they do not embrace dioses in action. The words “goods and chattels,” as used in our recording acts, do not include'a mere chose in action as a debt, or claim on another for money due.. These words refer to and only include, personal property which is visible, tangible or movable. Kirkland, Chase & Co. v. Brune et als. 31 Gratt. 126; Gregg v. Sloan et als. 6 Va. Law Journal 607; Bank v. Gettinger, 3 W. Va. 317.

For these reasons the decree of the municipal court or Wheeling rendered in this case on the 25th day of May, 1880, is reversed, with costs to the appellant, which costs must be paid by Logan I). Wallace; and this cause is remanded to said municipal court of Wheeling for further proceedings to be had therein, according to the principles herein announced, and further according to equity.

Judges Raymond and Green CONCURRED.

Judgment ReveRSed. Cause Remanded.