Case ID: va_53/html/0656-01.html
Source: Caselaw Access Project
Author: {"author": "DANIBB, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Addington v. Etheridge, Coroner.
    April Term, 1855,
    Richmond.
    (Absent Alten, P.)
    Conveyances — Benefit of Creditors — Inconsistent Reservations — Fraud Per Se. — II, a merchant, conveys to L all his stock of goods, and the store-house for the current year, in trust to pay certain debts described in the deed. And the deed provides, that H shall keep possession of and sell the stock of goods in the usual line of his trade, and occupy the store, until default in the payment of any of the debts secured, and until the trustee shall be requested by any of the said creditors to close the deed by a sale. The deed is fraudulent per se, and void as to the creditors of H.
    This was an action of debt in the Circuit court of Norfolk county upon an indemnifying bond brought by William Etheridge, coroner, acting as sheriff, for the benefit of William M. Eevy, against William H. Ad-dington and two others, his sureties in the bond. On the trial the plaintiff introduced a deed bearing date the 19th of January 18S2, and recorded the same day, by which Walter P. Harrison, a merchant of Portsmouth, conveyed to William M. Levy all his stock of goods and store furniture in the store occupied by said Harrison, and also the store for the balance of the year, in trust to pay certain debts described in the deed. These debts were divided into four classes, and were to be paid in the order of the classes. The two first embraced debts for which negotiable notes had been given and discounted for the benefit of Harrison, and which would fall due, one of them within three days of the date of the deed, and the others at from thirty to ninety days.
    The deed provided that Harrison should keep possession of and sell the stock of goods, in the usual *line of his trade, and occupy the store, until default in the payment of any of the debts secured, or until the trustee should be requested by any of the said creditors to close the deed by a sale. And then the trustee was authorized to sell and pay according to the order of priority stated in the deed.
    It was also proved that Addington was a creditor of Harrison by judgment confessed after the deed was recorded; and that he had levied an execution on the goods to satisfy his judgment; and that all the proceedings under the said levy were regular.
    After the evidence was closed, the defendants moved the court to instruct the jury as follows:
    First. That if they believed that the said deed from Harrison to Bevy was given with intent to delay, hinder or defraud creditors of what they were lawfully entitled to, that the said deed is void as to said creditors.
    Second. That the fact that the goods mentioned in the said deed were, by the authority of the said deed itself, to remain in the possession of the said Harrison, as in the said deed mentioned; and that he was thereby empowered to make sales of them, as in the said deed mentioned, and to account to the said Levy the trustee, as required by the said dee'd, rendered the said deed fraudulent and void per se as against the defendant Addington. But the court refused to give the instructions; and the defendant excepted. There was a verdict and judgment for the plaintiff for one thousand five hundred dollars. And thereupon Addington applied to this court for a supersedeas, which was awarded.
    Tazewell Taylor, for the appellant.
    Patton, for the appellee.
    
      
       Assignments for the Benefit of Creditors — Inconsistent Reservation — Fraud Per Se. — On this subject, see the principal case cited in foot-note to Quarles v. Kerr, 14 Gratt. 48; foot-note to Marks v. Hill, 15 Gratt. 400; foot-note to Gordon v. Cannon, 18 Gratt. 387; foot-note to Perry v. Shenandoah Nat. Bank, 27 Gratt. 755; Wray v. Davenport, 79 Va. 24; Young v. Willis, 82 Va. 296; Hughes v. Epling, 93 Va. 426, 25 S. E. Rep. 105; Gardner v. Johnston, 9 W. Va. 407; Harden v. Wagner, 22 W. Va. 364; Claflin v. Foley, 22 W. Va. 441; Livesay v. Beard, 22 W. Va. 591; Shattuck v. Knight, 25 W. Va. 598; Landeman v. Wilson, 29 W. Va. 708, 2 S. E. Rep. 206; Baer, etc., Co. v. Williams, 43 W. Va. 327, 27 S. E. Rep. 346; Conaway v. Stealey, 44 W. Va. 168, 28 S. E. Rep. 795; Fink v. Patterson, 21 Fed. Rep. 606.
      See the principal case distinguished in Marks v. Hill, 15 Gratt. 416.See further on the subject, mono-graphic note on “Assignments for the Benefit of Creditors.”
    
   DANIBB, J.,

delivered the judgment of the court:

It seems to the court, that as it appears from the * bill of exceptions that no evidence was offered to prove the intent with which the deed from Harrison to Bevy, therein set forth, was executed, other than such as was afforded by the provisions of the deed itself, the question whether the said deed was fraudulent per se or not, was one to be decided by the court on an inspection of said deed, and not proper to be submitted to the jury; and as the first instruction proposed by the plaintiffs in error sought to refer that question to the jury, it was not an error in the Circuit court to refuse to give said instruction.

It seems further to the court, that the clause in said deed, by which it was stipulated that the grantor W. P. Harrison should keep possession of and sell the stock of goods thereby conveyed, in the usual line of his trade, and hold, occupy and enjoy the store until default in the payment of any of the debts thereby secured, or until the trustee William M. Bevy should be requested by any of the creditors in said deed mentioned to close said deed b3r sale, is explained by the clause immediately succeeding, in which it is declared that the said trustee is thereby empowered, in the event of default in the payment of any of the said debts by the said Harrison, when at maturity, upon the request of any of the said creditors, to dispose of the property in said deed conveyed; and that it was the purpose of the grantor in said deed to retain to himself the power to keep possession of and sell the said stock of goods until default should be made in the payment of said debts, and until the trustee should be requested by any of the creditors to close the deed by sale.

And it seems further to the court, that this power is one incompatible with the avowed purpose of the grantor to furnish an indemnity to his creditors; is equivalent in its effects to a power of revocation; and fully adequate to the defeat of the provisions of the deed. And therefore, that said deed is, according to *the principles adjudicated by this court in the cases of Lang v. Lee, 3 Rand. 410, Sheppard v. Turpin, 3 Gratt. 373, fraudulent per se, null and void.

And it seems therefore further to the ;ourt, that the Circuit.court erred in refusing to give the second instruction asked for by the plaintiffs in error.

It is therefore considered by the court, that the judgment of the said Circuit court be reversed and annulled, with costs, &c., the verdict of the jury set aside, and the cause remanded for a new trial, with instructions to the said Circuit court, if upon said trial the same instructions shall be asked, to refuse to give the first, and to give the second.

Judgment reversed.