#### Quarles v. Lacy.

Argued Monday, November 15tli, 1813.

i. Postnuptial Settlement — Consideration—Relinquishment of Dower Rights — Effect on Creditors.† — Although it is not competent to a husband, after his marriage, to defeat or obstruct his creditors, by selling or exchanging his property, and taking a conveyance of the money or other property received therefor, to the use, or for the benefit of his wife and family ; (such conveyances being deemed voluntary, and fraudulent as to creditors ;) yet the case may be otherwise in relation to so much of such money or other property as goes to compensate the just interests of the wife. If, therefore, the wife relinquish her right of dower in other land, in consideration of such conveyance, the value of such dower ought to be saved to her, in opposition to the claims of her husband’s creditors.

2. Deed of Trust — Sale under Decree of Court — Failure to Follow Decree— Effect. — A sale of land by trustees under a decree in Chancery adjudged invalid, on the grounds that such sale was not made pursuant to the decree, which directed as much of the land to be sold as would pay the debt; (which excluded the power of selling in smaller quantities ;) whereas the trustees sold the same in smaller quantities, at different times ; (a circumstance which might have diminished the price obtained therefor ;) and became themselves the purchasers at a very inadequate price ; the sale having also been made under a general impression, existing in the neighbourhood, that the land had been before sold by private contract.

3. Same — Forced Sale — Inadequate Price.‡ — A trustee, or commissioner, selling land under a deed of trust, or decree in Chancery, ought not to permit the creditor’s agent to force the sale, at an inadequate price, in the absence of other bidders.

In this case, a bill was filed in the Superior Court of Chancery for the Richmond district, by Edmund Lacy against ^Francis West Quarles and others, to subject to the payment of a debt claimed by the former, certain property conveyed by the latter in trust.

The bill stated that Lacy had obtained a judgment at law against Quarles, who, being taken on a capias ad satisfaciendum, took the oath of an insolvent debtor. It appeared from the proceedings, that the trust estate sought to be subjected by Lacy was a tract of land, or rather a surplus of the proceeds of the sale thereof, which was purchased by Quarles of one Crosbie, and conveyed by Crosbie to Beverley Robinson, and John Fox, in trust to satisfy the purchase money stipulated to be given for it, and in further trust to hold so much of the land as should remain unsold, for the use and support of Mrs. Quarles, the wife of the purchaser, during her life, then to the use of her said husband for his life, should he survive her, and finally, to the use of such of their children as the survivor should designate by deed or will.

By a decree of King William County Court, pronounced in a suit instituted by Crosbie, (for the benefit of Robert Baylor his assignee,) to subject the property to sale for the purchase money, so much of the land as would pay the debt in the decree mentioned, was directed to be sold by the trustees for that purpose. In attempting to carry this decree into effect, they sold the land in parcels, at different times, for about 571 dollars 67 cents in all, and became themselves the purchasers, being the highest bidders at those sales. They paid 542 dollars 85 cents *102in discharge of the debt, and afterwards

sold the same land by private contract, to a certain James Buckner, for nineteen hundred dollars, which (as *they stated in the report to the court) they intended to give for the benefit of Mrs. Quarles and her children, after deducting a reasonable compensation for their own trouble and expense.

When this report was made to King William Court, Edmund Lacy, the present plaintiff, as a creditor of Francis W. Quarles, (though not a party to the suit in that court,) was permitted to file exceptions to the report, which, however, were over-ruled, and a decree was made, pronouncing the sale to have been fair, just and honest, and the title to the land to be in the purchasers Beverley Robinson, and John Fox, with right and power to dispose of and convey the same in any way they might think proper.

° In their answers to Lacy’s bill, they stated that they made the several bids for the parcels of land of which they became the purchasers, reluctantly, and only for the purpose of preventing the lands from being sold at still lower rates ; the sales respectively being forced by agents of Robert Baylor, notwithstanding few persons disposed to purchase were present. It appeared in evidence that a private contract, for the sale of the whole tract from Quarles to Buckner, had been made; which circumstance being known in the neighbourhood, probably tended to discourage other persons from bidding at the public sales ; that the offering the land in parcels had a similar effect; that the trustees, however, acted fairly and honourably in the whole transaction, and wished to give up their first bid, but (being compelled by the County Court to complete the purchase of the part first sold,) they afterwards insisted on their title to the whole. They also stated in their answers, that after paying the debt to Baylor,, they had invested nearly all the balance for the benefit of Mrs. Quarles and family.

The bill in this cause was filed sometime in the year 1807. A decree nisi was entered against Francis W. Quarles, in June 1808. The Chancellor, in July, 1812, heard the cause as to all the defendants, except him, and decreed a sale of so much of the land as should be sufficient to satisfy the plaintiff’s claim. Biit the effect of this decree was to be suspended *until the first day of the next term, on or before which day, liberty was reserved to the said F. W. Quarles to shew cause against it, being previously served with a copy thereof. On that day, Quarles exhibited an answer, controverting the justice of the plaintiff’s demand, and stating, that George W. Smith agreed to take of him a house and lot in Richmond, at the price of 4601. and to become his security for the balance of the money to be paid for the land purchased of Crosbie, provided that land was conveyed to trustees for the use of his sister Mrs. Quarles for life, and after her death to her children ; that, in pursuance of that agreement,' the purchase was made of Crosbie, and the deed executed to the trustees ; upon which Mrs. Quarles relinquished to Smith her right of dower in the house and lot; that the said house and lot had cost him, Quarles, 4601. of which 1301. being due at that time, was paid by Smith to William Young, the original vendor ; that, of the balance, 3001. was paid to Crosbie, and 301. to Thomas Armistead, a creditor, who had an execution against the respondent.

The chancellor, being of opinion that the matter stated, if true, did not afford sufficient reason for setting aside the decree, refused to admit this answer to be filed: whereupon the defendant Quarles applied for and obtained an appeal to this court.

Williams, for the appellant.

The answer of Quarles being offered on the day for shewing cause against the decree, should have been received, according to the uniform practice of the Court of Chancery. That answer went into detail, to shew the injustice of the judgment- at law, and, at that stage of the proceedings, should have been considered as true ; at least so far as to give him an opportunity of supporting it by proof. The depositions taken in the cause were, as to him ex parte, and therefore not to be read against him. (a)

The decree of the County Court, a court of competent jurisdiction, had authorised the sale of the land by the trustees, and the approbation by them of the surplus to the use of Mrs. *Quarles and family ; and they had paid it over at a time when no suit was pending for that surplus. The amended bill in this suit, which exhibited the plaintiff’s claim to this fund, was not filed until after all the proceedings in King William Court had taken place. The decree was therefore conclusive against the present demand.

The purchase by the trustees cannot be invalidated on the ground that their buying for themselves is inconsistent with trust; for a trustee may purchase under the authority of a Court of Equity, (b) All the testimony proves that the sale was fairly conducted. The land would have sold for less, if Robinson the commissioner under the decree had not purchased. His having done so was reported to the court, and they sanctioned his purchase.

A decree of a court of competent jurisdiction cannot be set aside by an original bill, without a charge of fraud.(c) And in such case, the bill ought to state the decree, and the particular fraud alleged. But as Lacy was admitted to file exceptions, he was a party, and could impeach the decree, only by appeal, supersedeas, or writ of error; — not by original bill.

Nicholas for the appellee,

made four points.

1. The deed of trust, so far as it went to protect the surplus for the use of the wife and children, .was void against creditors.

This was a merely voluntary conveyance after marriage, and therefore mala fide in respect to creditors.(d) When it was executed, Quarles was indebted to Lacy. His becoming insolvent soon afterwards is a strong circumstance to shew that fraud was intended. Contemplating his approaching in*103solvency, he attempted by the deed to secure an estate for life to himself, as well as an estate to his wife and children after his death.

2. The purchase by the trustees being for a price obviously inadequate, they must be considered as holding the surplus for the benefit of the creditors. No operation of their’s to change the shape of the property, could take it out of the reach of creditors. At the first sale they had a discretion ; *and there being no person on the ground, disposed to bid, but the agent of Baylor, they should have postponed the sale. It is evident, there was an understanding between Quarles, the trustees, and Mr. Buckner the ultimate purchaser, that he was to have the land. This plainly appears from the circumstance that Buckner was permitted to sow a crop of wheat upon it before the first sale. The witnesses, who say the sale was fairly conducted, only mean that all due forms were observed.

According to the case of Whichcote v. Baurence, 3Vesey jr. 740, a trustee is not permitted to make a profit to himself. If he buys advantageously, he is bound to account, for the profit made, to the cestuy que trust, or to the person entitled to the fund. The trustees were allowed commissions by the County Court. In their answers they say, they reserved a moderate compensation for their trouble ; how much does not appear. If the court should sanction this doctrine that the trustees, having paid over the surplus to the wife, should be protected, the consequence would be, that by contrivances of this sort the claims of creditors might always be defeated.

3. The proceedings in King William Court are no obstacle to the recovery in this cause. We do not attempt to subject the trustees to any personal inconvenience, but only claim the fund which always was liable to our debt.

In the first place, the present plaintiff was not a party to the suit in King William. His being permitted to file exceptions did not make him a party. He happened to be in court, and was permitted to except to a collateral point, but had no opportunity to take evidence and be fully heard. The Court, when they discovered him to be a creditor, ought to have directed him to be made a party, instead of merely allowing him to file exceptions.

In the second place, the present suit was going on at the same time with the suit in King William Court; the subpoena having been returned executed on all the defendants, and the original bill filed, in this cause, before the final decree in King William.

□ ^Thirdly, the appellee is interested CTj in only part of the controversy in King William. He does not attempt to set aside the sale, but only claims so much of the surplus as will pay his debt.

Fourthly, the former decree is not pleaded in bar. The proper way to take advantage of the bar is by plea, (a) And such plea must state that the same point was in issue ; whereupon it is the course of the court to refer it to a master, to enquire whether the suit is for the same matter which was determined by the decree pleaded, (b)

4. The court acted properly in refusing to set aside the decree, and admit the answer of Quarles.

The subpoena was served upon him in 1806 ; the attachment was returned executed: the decree nisi was entered in 1808 ; in 1813, (just as my client was getting a glimpse of equity,) he comes forward, and insists upon setting aside the decree, on his filing his answer, without assigning any reason for not having filed it during that great length of time ! If such a practice be permitted, it will open a door for parties always to trifle with the court, and defeat justice. The rule is that a reasonable time, and no more, ought to be allowed to set aside a decree nisi.(c)

But, upon the merits, the grounds taken in the answer he attempted to file were not sufficient, if true, to affect the decree. A claim to unliquidated damages for a tort is no ground for a set-off against a judgment.

Williams in reply.

Mr. Nicholas and myself differ as much about the facts, as we do about the law of this case. The decree nisi, entered in 1808, was never served upon Quarles. The first notification he received was the service of a copy of the decree of 1812, which contained a reservation, permitting him to shew cause against it on or before the first of January 1813; on which day he appeared and offered to file his answer. The chancellor then ought to have received it, since it was offered within the reservation of his own decree.

That answer alleged a circumstance of great importance; *viz. that deed of trust was executed in consideration of the relinquishment by Mrs. Quarles of her right of dower in a house and lot in Richmond. It is true that a conveyance after marriage without consideration is void; but if it be upon valuable consideration, as where the relations of the wife undertake for her that she shall relinquish her dower in consideration of the conveyance, and such relinquishment is made, the conveyance is good.

The question of inadequacy of price in the first sale was fully before the County Court, which permitted the trustee to purchase, and held him to his bargain. Bacy in his exceptions made the point, and was overruled by the court. The case of Whichcote v. Laurence, quoted by Mr. Nicholas, was re-considered in Campbell v. Walker, 5 Vesey, jr. and modified by the court.

When a court of equity has affirmed a sale by commissioners appointed by itself, (until which affirmance no title passes by the sale,) no other court of equity, except upon an appeal, can question it. The plaintiff in this case does attempt to impeach the first sale. If not, he has no claim at all; for if the first sale was good, the property was vested in the purchasers, and he has nothing to do with the second sale.

Mr. Nicholas says, he does not wish to interrupt the trustees, but only to claim the fund. If so, why are they made parties ? yet he says, (and the chancellor says,) they are trustees of the surplus for the creditors of Quarles.

Thursday, March 31st, 1814,

†

 Postnuptlal Settlement — Consideration — Relinquishment of Dower Rights — Effect.—That a post-nuptial settlement in favor of a wife, made in pursuance of a fair contract for valuable consideration, will be held good, is a doctrine supported by abundant authority; and although it may have been made under such circumstances that it must be pronounced fraudulent and void as to the creditors of the husband, yet if the wife has relinquished her interest in property on the faith of such settlement, it will be held good to the extent of a just compensation for the interest which she may have parted with; and this though the settlement may have been made subsequent to the relinquishment. William & Mary College v. Powell, 12 Gratt. 385, citing principal case. To the same effect, the principal case is cited in Blanton v. Taylor, Gilm. 210; Harvey v. Alexander, 1 Rand. 234; Taylor v. Moore, 2 Rand. 579, 592; Penn v. Whiteheads, 12 Gratt. 81; Davis v. Davis, 25 Gratt. 590; Penn v. Whitehead, 17 Gratt. 512; Strayer v. Long, 86 Va. 560, 561, 10 S. E. Rep. 574; Nickell v. Tomlinson, 27 W. Va. 708; Glascock v. Brandon, 35 W. Va. 91, 12 S. E. Rep. 1104; *foot-note*to William & Mary College v. Powell, 12 Gratt. 372, containing an extract from Glascock v. Brandon, 35 W. Va. 91, 12 S. E. Rep. 1104; *foot-note*to Blanton v. Taylor, Gilm. 209. See also, mono-graphic *note*on “Fraudulent and Voluntary Conveyances” appended to Cochran v. Paris, 11 Gratt. 348.

‡

Deeds of Trust — Forced Sales. — A trustee in a deed of trust is the agent of both parties, and bound to act impartially between them; nor ought he to permit the urgency of the creditors to force a sale under circumstances injurious to the debtor at an inadequate price. Rossett v. Fisher, 11 Gratt. 498, citing the principal case. See to the same effect, the principal case cited In Estill v. McClintic, 11 W. Va. 424: Machir v. Sehon, 14 W. Va. 783; Spencer v. Lee, 19 W. Va. 195; Livey v. Winton, 30 W. Va. 560, 4 S. E. Rep. 455; Hartman v. Evans, 38 W. Va. 679, 18 S. E. Rep. 814; *foot-note*to Hogan v. Duke, 20 Gratt. 244, containing an extract from Hartman v. Evans, 38 W. Va. 669, 18 S. E. Rep. 810; Spencer v. Lee, 19 W. Va. 188; *foot-note*to Wilkins v. Gordon, 11 Leigh 547, containing an excerpt from Spencer v. Lee, 19 W. Va. 188; *foot-note*to Lane v. Tidball, Gilm. 130. See further, monographic *note*on “Deeds of Trust” appended to Cadwallader v. Mason, Wythe 188; monographic *note*on “Trusts and Trustees” appended to Lee v. Randolph, 2 Hen. & M. 12.

(a)

 Stubbs v. Burwell, 2 H. *&*M. 536.

(b)

 Campbell v. Walker, 5 Vezey, jr. 678.

(c)

 Coop. Eq. 98; Mitf. 85.

(d)

 Sudg. 432; 1 Fonb. 260; Rev. Code, 1st vol. p. 15; whlcli is a transcript of tbe Stat. 13 Eliz. — Note in Original Edition.

(a)

 Wyatt’s Pr. Reg. 328; Mitf. 88.

(b)

 Wyatt. 231.

(c)

 Wyatt, 26; 2 Bro. Ch. cases, 279, Williams v. Thompson.

JIJTJGB *104ROANE)

pronounced the opinion of the court.

The court is of opinion, that although it is not competent to a husband, after his marriage, to defeat or obstruct his creditors by a sale or exchange of his property, and by taking a conveyance of the money or property received therefor, to the use, or for the benefit of his wife or family; (such conveyances being deemed voluntary and fraudulent, in relation to creditors;) yet that the case may be otherwise, in relation to so much of such money or property as goes to compensate- the just interests of the wife ; and it appearing, from *the answer of E'. W. Quarles, exhibited in this case, that a part of the King William lands in the proceedings mentioned, or the proceeds thereof, was intended to be settled on Mrs. Quarles, in lieu of her dower in the lot in Richmond, sold by her husband, and her dower in which was relinquished in consideration thereof, the court would be of opinion to reverse the decree, on the ground of not receiving that answer, and permitting the appellant to verify the fact, but for the circumstance that enough of the surplus proceeds of the said King William lands will be left to compensate her right of dower aforesaid, under any reasonable calculation, after the appellees debt, as well as that of Robert Baylor, shall have been first paid.

The court is also of opinion, that the sale of the land in the proceedings mentioned having been made by one of two trustees, and bought in by him for the benefit of both, at a very inadequate price ; that the said sale not having been made pursuant to the decree of King William Court, which directed as much of the land to be sold as would pay the debt in the decree mentioned ; (which excludes the power of selling in smaller quantities ;) and the same having, in this case, been sold in smaller quantities at different times ; (a circumstance which, even in the opinion of the trustees themselves, may have diminished the price obtained therefor;) and that the said sale having been also made under a general .impression existing in the neighborhood, (of which, however, the trustees are not proved to have had knowledge,) that the same had been before sold by private contract; that the purchases thereof by the trustees themselves, under these circumstances, are not valid, nor can become so by their having subsequently relinquished the same for the benefit of Mrs. Quarles and her family. As to the circumstance mentioned by the trustees, that the agent of the creditor was present to urge, or, as is said, to force the sale, the court is clearly of opinion that no such influence ought to have operated upon them — and that trustees, acting under private deeds of trust, as well as those acting under decrees of a Court of Chancery, should consider themselves impartial *agents for both parties, and act in all sales for the interest of the debtor as well as the creditor. On these grounds the court is of opinion, that the sales of the land by the trustees to themselves, under the circumstances aforesaid, were not valid, and did not transfer the right to them ; but that error having been corrected by their subsequent sale to Buckner for a full and fair consideration, the proceeds of which, after satisfying Baylor’s debt, have been vested in Mrs. Quarles and her family, the court is of opinion, that the said last mentioned sale should not be disturbed, but be ratified ; but that so much of such proceeds should be held liable to the debt of the appellee as shall be necessary to pay the same. On these grounds the decree of the Court of Chancery is to be affirmed.