Case ID: va_49/html/0501-01.html
Source: Caselaw Access Project
Author: {"author": "MONCURE, J-,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Ott’s Ex’x v. King & als.
    October Term, 1851,
    Richmond.
    (Absent Cabell, P.)
    Equitable Liens — Practice in Equity- — Case at Bar. — A
    debtor contracts to give a lien on two adjoining tenements, to secure the debt, and the creditor is in possession of one of the tenements under an agreement by which the rent of the tenement is to be taken in satisfaction of the interest on the debt. Afterwards the debtor becoming embarrassed in his circumstances conveys all his property in trust to pay his debts. Hell : The creditor is entitled to enforce his equitable lien not only against the debtor but his creditors.
    In January 1811 George Ott leased from Miles King a lot on Main street in Norfolk, for a term of twelve years, to commence from the 31st of March 1811. Ott covenanted to build on this lot a good brick house, and to pay an annual rent of 220 dollars. It was further agreed that either Ott or King might at any time, not less than twenty or more than sixty days before the expiration of the term, give the other party notice the lease would not be renewed, and in that case the buildings erected by Ott were to be valued, and the amount of the valuation to be paid by King to Ott before the expiration of the term, and then on such payment the premises to be surrendered by Ott. Ott entered on the premises and erected a large double brick tenement, &c., and continued in possession throughout the term, which ended on the 31st of March 1823. On the 1st day of February 1823, Ott gave King a written notice that he would not renew the lease, and appointed a valuer of the buildings. King on his part appointed a valuer, and the two valued the buildings at 8159 dollars *73 cents. By the agreement of lease, King was to pay Ott the sum ascertained by the valuers, and on the payment Ott was bound to surrender the property at the end of the term. It seems that King was unable to comply with his obligation to pay the value of the buildings. He proposed to Ott to execute two bonds of 2500 dollars each, dated April 1st, 1823, each bearing interest from date, and payable one in four the other in five years; the residue of 3159 dollars 73 cents, payable as King conveniently could after the 1st April 1823. King at various times paid the 3159 dollars 73 cents. He executed his two bonds for 2500 dollars each, according to his proposition, and Ott released possession of one of the houses, and King agreed to execute a deed of trust on the two. Ott retained the possession of one of the houses until his death as a securitj for the two notes of 2500 dollars each, and it still is in possession of his executrix and devisee. By an agreement between Ott and King the rent of the retained tenement was set off against the interest accruing on the bonds ; so that only the principal remained due.
    In 1831 Ott died, and devised his real and personal estate to Jane Ott his wife, and appointed her his sole executrix.
    Miles King had become much embarrassed in 1835, and executed various assignments on separate portions of his real estate, in which deeds his interest in the land and appurtenances'occupied by Mrs. Ott was not conveyed. But by a deed bearing date the 8th day of July 1835, he appointed Newton C. King his trustee for the purpose of receiving all his estate, real and personal, not before conveyed, for the benefit of all his creditors, and added, “I hereby convey the same to him in trust for the purpose aforesaid, he first paying me ten dollars which I hereby acknowledge to have received.”
    In July 1840 Mrs. Ott as executrix of George Ott, filed her bill in the Circuit court of the city of Norfolk *against Miles King and his wife and N. C. King-, in which she set out the foregoing facts and asked that the said two bonds might be decreed to be paid; and in default of payment that a sale of the premises in her possession might be decreed for satisfaction thereof.
    Miles King answered the bill admitting the lease and the agreement by which he was to execute the two bonds, but alleging that they had been nearly paid off; and concurring in the prayer that for the balance due on them they might be held to be a lien on the premises in the possession of the plaintiff. N. C. King answered, averring his ignorance of the matters stated in the bill except that he had been appointed by Miles King by his deed of the 8th of July 1835, the trustee and receiver of all his estate not before conveyed, for the benefit of his creditors; and he supposed that by this deed the premises mentioned in the bill passed to him, and whatever rights the creditors had under that deed he submitted to the protection of the Court.
    In the progress of the cause an account was directed and' reported by a commissioner of the Court, but when the cause came on to be finally heard in June 1845, the Court being of opinion that the plaintiff was not entitled to the relief prayed for, without acting on the report, dismissed the bill with costs. Whereupon the plaintiff applied to this Court for an appeal, which was allowed.
    The Attorney General and Cabell, for the appellant.
    1. The agreement between Ott and King should be executed as between them. That agreement is not only fair and certain, but if it had not been reduced to writing, it would have been enforced, because Ott is in possession. 2 Story’s Equ. Jur. I 751.
    2. If the agreement will not be enforced then Ott held adversely to King. He held the property as a pledge to secure another contract: and in that state of *facts King’s deed passed nothing. Hopkins v. Ward, 6 Munf. 38.
    3. Independent of the written agreement Ott had a vendor’s lien on the houses. He built them, and they were valued and sold to King at the valuation. And Ott held possession of one of them to secure the payment.
    4. The deed of King is a nullity, and cannot affect Ott’s title to specific execution of the contract. The deed contains no words of conveyance sufficient to pass real estate or any interest in it. The deed too, names no property and no creditor. It is all the property for all the creditors. Har-vie v. Wickam, 6 Eeigh 236; Galt v. Carter, 6 Munf. 245. In the case of Wilkins v. Gordon, 11 Eeigh 547, the deed was sustained : but there although the debts were only described as being about so much, the property was properly described.
    It has been frequently held in England that a deed made without the assent of the cestuis que trust is revocable at the pleasure of the grantor, and void as to creditors. Walwyn v. Coutts, 5 Cond. Eng. Ch. R. 7; Garrard v. Eauderdale, Id. 1; Acton v. Woodgate, 8 Id. 97; Page v. Broom, 3 Id. 543. We have a decision of our own seemingly in conflict with these cases. Skipwith v. Cunningham, 8 Eeigh 271. This case is however shaken by the later case of Spencer v. Ford, 1 Rob. 648.
    The case has been depending for years, yet no attempt has been made by creditors to set up the trust as against the property claimed by Ott. There is no authority in the deed to the trustee to sell; and the cestuis que trust can only set up their claims by filing a bill to enforce them: And this they have not done.
    5. King did not by his deed to his son Newton King, either convey or 'intend to convey any property but such as he had a right to dispose of. And as he had no right to dispose of this property until Ott’s claim was satisfied, *it is only the remainder after paying that debt that passed by the deed. Eacon v. Mertens, 3 Atk. R. 1; 2 Story’s Equ. Jur. I 759; 3 Woodson’s Eect. 281.
    There was no counsel for the appellee.
    
      
      Equitable Mortgages. — in Atkinson v. Miller, 34 W. Va. 118, 11 S. E. Rep. 1007, it is held: “An executory agreement in writing, stipulating for the execution in future of a mortgage or deed of trust, is of common occurrence, and is valid, and will be specifically enforced in equity, or what is the same thing, treated as an equitable mortgage. Ott v. Ring, 8 Gratt. 224; Alexander v. Newton, 2 Gratt. 266; 1 Jones, Mortg. § 163.”
    
   MONCURE, J-,

delivered the opinion of the Court.

The Court is of opinion that the appellee Miles King, having agreed by contract in writing signed by him, to give a deed of trust on the lot of land and buildings in the bill mentioned, to secure the payment of his two bonds to George Ott, the testator of the appellant, for two thousand five hundred dollars each, dated the first day of April 1823, payable four' and five years after date, with interest from the date; and the said George Ott in his lifetime, and the appellant as his sole devisee, legatee and executrix, since his death, having retained possession of a part of the said property, to wit, the western tenement, since the said contract was entered into, under an agreement with the said Miles King that an annual rent of three hundred dollars should be allowed therefor and set off against the annual interest on the said two bonds; the said contract constituted an equitable lien on the said property for the amount of the said two bonds, which lien a Court of equity ought to enforce not only against Miles King and his heirs, but against Newton C. King and the creditors, if any, claiming under the general assignment exhibited with the bill; whether the said assignment be invalid or not, a question which the Court deems it unnecessary, in this case, to decide. And the Court is further of opinion, that the Circuit court, instead of dismissing the plaintiff’s bill, should have proceeded to ascertain the balance due upon the said bonds, and then have decreed that unless the said balance so ascertained with interest and costs of suit should be paid by the defendants or *some of them within a reasonable time thereafter, the said property or so much as might be necessary, commencing with the western tenement aforesaid, should be sold for the purpose of paying the same. Therefore it is considered that the said decree of the Circuit court be reversed and annulled, and that the appellant recover against the appellee Miles King her costs by her expended in the prosecution of her appeal aforesaid here. And the cause is remanded to the said Circuit court to be proceeded in according to the foregoing opinion.

Decree reversed.