Case Name: Tate v. Liggat & Matthews; Liggat & Matthews v. Morgan and Others
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1830-03
Citations: 2 Leigh 84
Docket Number: 
Parties: *Tate v. Liggat & Matthews. Liggat & Matthews v. Morgan and Others.
Judges: COALTER and CABELL, J., also said, that they concurred in the result, but thought it unnecessary to decide the general question, stated by Carr, J., and therefore they gave no opinion upon it.
Reporter: Virginia Reports
Volume: 29
Pages: 262–272

Head Matter:
*Tate v. Liggat & Matthews. Liggat & Matthews v. Morgan and Others.
March, 1830.
Fraudulent Conveyances — Impeachment "by Creditor at Large. — A creditor ad large, not having obtained judgment or decree against his debtor, cannot resort to equity to set aside a fraudulent conveyance of his debtor, though interference of the court be also prayed to prevent a sale or removal of the subject, and thought the subject be equitable estate not liable to execution.
Same — Purchase of Equity of Redemption Pending Suit to Set Aside — Priorities. —Deison mortgages property to secure a fair debt due The Farmers’ Bank, and a pretended debt to Tate: L. & M. bring a suit in chancery impeaching the security provided by the mortgag-e for pretended debt to T. as fraudulent: pending this suit, D. mortgages, not the property, but his equity of redemption in it, to S. & Co. fair creditors, to secure a just debt due them: and then L. & M. obtain a decree for their claim against D. Held, that S. & Co. purchased only what D. could rightfully convey, that is, his equity of redemption, and took, subject not only to the fair debt due The Farmers’ Bank, but the pretended debt secured to T. And L. & M. being creditors by decree, and thus having a right to satisfaction in preference to the pretended creditor T. acquired a preference also over the second mortgagees S. & Co. who were postponed by contract to the pretended creditor T.
Mortgage Creditor — Double Character of Creditor and Purchaser. — A creditor at large, procuring a mortgage of his debtor’s property, cannot claim as a creditor, or in the double character of creditor and purchaser, but only as purchaser.
Fraudulent Conveyances — Effect on Subsequent Purchaser with Notice. — And per Green, J., if A. make a fraudulent conveyance of personal property to B. and then make a conveyance for valuable consideration to C. who has full notice of the previous fraudulent conveyance, the statute of frauds and perjuries does not apply to protect such a subsequent purchaser against the previous fraudulent conveyance, nor upon the principles of the common law can he claim against the previous fraudulent conveyance whereof he had notice when he purchased.
Appeal — Parties Standing on Distinct Grounds — Effect. — Suit in chancery against A. and B. Decree against A. for debt, and against B. declaring a conveyance by A. to him fraudulent as against plaintiffs; ca. sa. issued on decree against A. for the debt, and executed; then B. appealed from the decree so far as it affected him; and the court reverses the decree so far as it affected B. but held, that it could not reverse the decree against A. who had not appealed, though the court of chancery had no jurisdiction to mate the decree against him.
Charles Deison, by deed dated the 13th May 1820, and duly recorded, conveyed to Garland Tate and David G. Murrell, a tract of 104 acres of land in the county of Campbell, five slaves, and all his stock of horses &c. plantation utensils, and household and kitchen furniture, in trust, *to secure debts due by him to the Farmers’ Bank of Virginia at Lynch-burg, upon notes indorsed by Whitlocke and Richardson, and discounted by the bank, for his accommodation, to the amount of 2080 dollars, and another debt of 5000 dollars to Edmund Tate (Deison’s father-in-law) ; with power to the trustees to sell the subject at the request of the creditors or either of them, selling the slaves and other personal subject before the real; and to apjfly the proceeds, first to the payment of the debt due to the bank, and then to the debt due to Tate.
And by another deed, dated the 13th November 1820, and duly recorded, Deison conveyed the same subject, with the moiety of a carriage and harness held by him in common with Edmund Tate, in trust to indemnify Whitlocke and Richardson, his indorsers at the Farmers’ Bank, and to secure Tate the debt of 5000 dollars due to him, as mentioned in the former deed, with like provisions as those contained in the former deed, as to the sale of the subject, and the preference of the bank debt.
The trustees advertised the subject for sale on the 24th July 1821, under the first deed of trust. But on the 24th May 1821, Deison executed his bond to Eiggat & Matthews, for 1200 dollars payable on demand. And, immediately, or» the same day, Eig-gat & Matthews exhibited a bill in the su-periour court of chancery of Eynchburg, against Deison, Edmund Tate, and G. Tate and D. G. Murrell the trustees; setting forth their claim against Deison upon his bond for 1200 dollars just executed to them; alleging, that the deed of trust, so far as it secured the debt of 5000 dollars to Edmund Tate, was fraudulent as against Deison’s creditors; that no such debts, and indeed no debt of any considerable amount, was due from Deison to Tate; and that the deed was a contrivance of Deison and Tate, to defraud Deison’s just creditors; praying, therefore, that the trustees should be in-joined from proceeding to sell more of the trust subject than would .suffice to satisfy the debt due to the bank; that the deed might be declared fraudulent *and void as to the plaintiffs, so far as it secured the debt of 5000dollars to Tate; and that the trust subject might be sold to satisfy the debt of 1200 dollars due to them.
The injunction was awarded.
Deison and Edmund Tate, in their answers, respectively, averred that the debt of 5000 dollars secured by the deeds of trust, was really and bona fide due to Tate, and that the deeds were in all respects fair. The trustees in their answer, disclaimed all knowledge on the subject, except that they had consented to act as trustees, and had at the request of Whitlocke (one of Dei-son’s indorsers at bank) advertised the trust subject for sale. These answers were all sworn to before John M. Settle, an aider-man of the town of Lynchburg; that of Edmund Tate on the 20th September, that of the two trustees on the 6th October, and that of Deison on the 8th October 1821.
And on the very day on which Deison’s answer was sworn to before Settle as aider-man, Settle filed in this caus.e (as Eiggat & Matthews alleged) certain articles of agreement, bearing date the 9th July 1821, between Deison, Edmund Tate, and the same Settle; whereby, after referring to the two deeds of trust of the 13th May and 13th November 1820, and reciting that it was the intent of the parties to pay a debt of 2093 dollars, which Deison owed to J. M. Settle & Co. out of the profits of' the trust subject in those deeds of trust comprised, Deison conveyed and transferred to Settle, all his interest in the same trust subject, real and personal; and Tate agreed, that the proceeds of the real part of the trust subject, that should be coming to him after satisfying the bank debts therein mentioned, should be placed in Settle’s hands, to 'be by him used, with the assistance and agency of Deison, till, from the profits thereof, the debt of 2093 dollars, with interest, due J. M. Settle & Co. should be paid; and Tate thereby directed the trustees to pay Settle the surplus of the proceeds of the sales of the real subject, which the deeds of trust destined to him, according to this agreement; and Settle relinquished to Tate, all right in *the property and the proceeds thereof,
so soon as the debt of 2093 dollars should be discharged.
After the above articles of agreement were executed, Settle obtained a deed from Deison, dated the 10th October 1821, and duly recorded, whereby Deison conveyed to R. C. Haden and J. M. Reynolds, all Deison’s right, title and interest in the trust subject, real and personal, comprised in the two deeds of trust of May and November 1820, in trust to secure to J. M. Settle & Co. the debt of 2093 dollars mentioned in the articles of agreement.
Meantime, the suit of Eiggat & Matthews against Deison, Tate and the trustees, to annul the two deeds of trust of May and November 1820, was in full prosecution; and a volume of depositions was taken on each side, touching the fraud imputed to Deison and Tate in that transaction.
At the hearing, in November 1823, the chancellor was of opinion, that the debt mentioned in the two deeds of trust as due to Tate, was simulated, and that therefore those deeds so far as they pretended to secure the debt to Tate, were fraudulent; and though he disclaimed jurisdiction to charge the debt due Liggat & Matthews on the trust subject, and dissolved the injunction he had awarded to inhibit the trustees from proceeding to sell it, he nevertheless declared the deeds of trust, so far as they pretended to secure the debt to Tate, fraudulent and void, as to Liggat & Matthews; and he gave them a decree against Deison personally, for the debt of 1200 dollars with interest claimed in the bill, and against Deison and Tate, jointly, for the costs of suit.
Upon this decree, Liggat & Matthews sued out a capias ad satisfaciendum against Deison. He was arrested on that process in December 1823, made a general surrender of his effects, and was discharged as an insolvent debtor. At this time, however, he held only four of the slaves, and the stock of horses &c. comprised in the two deeds of trust of May and November 1870. Dor Whitlocke, his indorser at bank, (as to whom the deeds were, on all hands, acknowledged to be fair), having paid the debt to the bank, had obtained *a decree subjecting the trust subject to sale for his indemnification; under which the tract of 104 acres of land, one of the slaves, and Deison’s interest in the carriage and harness had been sold, and the proceeds applied to reimburse Whitlocke. The other part of the trust subject, namely, four of the slaves and their increase, and the stock of horses &c. which were in Deison’s hands when he surrendered his effects and took the oath of insolvency, remained (for aught that appeared) in his possession to this day.
After the ca. sa. had been executed on Deison, and he had been discharged as an insolvent, Edmund Tate applied to this court for an appeal from the decree of the 1st November 1823; which was allowed, upon his giving security for costs. Deison never appealed from the decree.
And after the appeal, pending the case in this court, namely the first mentioned suit of Tate v. Liggat & Matthews, the second suit of Liggat & Matthews v. Morgan and others was commenced. The bill in the second suit, was exhibited by Liggat & Matthews against William Morgan, the surviving partner of J. M. Settle & Co. (Settle being now dead), Deison, Edmund Tate and Haden and Reynolds, the trustees named in Deison’s deed of October 1821; wherein, after recapitulating the proceedings in their first suit against Deison, Tate and others, the chancellor’s decree therein, the ca. sa. sued out therein against Deison and executed on him, his surrender of his effects and discharge as an insolvent, the pendency of the appeal taken by Tate from the decree, and Deison’s acquiescence in it, and the sale of the land &c. to indemnify Whitlocke, — they set forth the articles of agreement of Juty 1821, between Deison, Settle, and Edmund Tate, and Deison’s deed of trust to Haden and Reynolds of October 1821, to secure the debt of 2093 dollars due to J. M. Settle & Co. And they charged, that these two instruments were obtained by Settle, with full notice of Liggat & Matthew’s former suit, and of all the allegations of fraud contained in their bill in that suit, and by combination with Deison, to delay, hinder and defeat *Liggat & Matthews of their just claim against Deison ; that Settle & Co. acquired no rights by those instruments, that could stand in the way of Lig-gat & Matthews’s claim and proceedings; that their ca. sa. executed on Deison, and his surrender of his effect's on taking the oath of insolvency, vested all the trust subject, comprised in the deeds of trust of May and November 1820 (except what had been sold to satisfy Whitlocke) in the marshal of the court for their benefit; that Deison, however, still had possession of the remaining subject, namely, four slaves and their increase, and the stock of horses &c. ; that he was an improper depositary of the property; and that Morgan, the surviving partner of Settle & Co. -was making efforts to have it sold to satisfy the debt due him. Wherefore, the bill prayed an injunction to restrain Morgan, and his trustees Haden and Reynolds, from selling the subject under the deed of trust of October 1821; that that deed, and the articles of agreement of July 1821, might be declared fraudulent and void as against Liggat & Matthews; and that the trust subject then remaining in Deison’s hands, might be forthwith ordered into the hands of the marshal, unless security should be given for the forthcoming thereof to answer the decree of the court.
An injunction was awarded against Morgan and his trustees, according to the prayer of the bill.
The defendant Morgan alone put in an answer, which was not explicit as to the charge, that Settle, at the time he procured from Deison and Tate the articles of agreement of July, and from Deison the deed of trust of October 1821, had notice of the proceedings of Liggat & Matthews in their first suit; but he insisted, that, admitting Settle had such notice at the time of the execution of the deed of trust of October 1821, that deed gave Settle & Co. a lien on the subject preferable to any claim of Lig-gat & Matthews to have satisfaction out of it: there was no fraud designed or prac-tised, no collusion between Settle and Dei-son or Tate, no effort to favour either; the debt of 2093 dollars was bona *fide due from Deison to Settle & Co. and the agreement of July and the deed of trust of October 1821, were expedients, and honest and fair expedients, to secure the debt.
The only evidence in this case was documentary, namely, the record of the proceedings in the first suit, and the articles of agreement of July, and the deed of trust of October 1821, brought in question in this suit.
On the motion of Morgan, the chancellor dissolved the injunction he had awarded to restrain Morgan, and his trustees Haden and Reynolds, from proceeding to sell the trust subject to satisfy the debt due Settle & Co. And from this order Liggat & Matthews appealed.
In this court the two causes were' heard together. The first, Tate v. Liggat & Matthews, was argued by Leigh for the appellant, and Johnson for the appellees: the other, Liggat & Matthews v. Morgan and others, by Johnson for the ' appellants, and Stanard for the appellees.
I. In the first case, Leigh said, that the question, whether the deeds' of trust of May and November 1820, were fraudulent in respect to the security they provided for the debt therein stated to be due to Tate, was a mere question of fact which he should submit to the court upon the evidence, if indeed, the court should think it examinable in this cause. But, in truth, there was a fatal objection to the whole proceeding. Liggat & Matthews were only bond creditors; creditors, who had acquired no lien whatever on the property of their debtor, Deison; who had been no wise hindered of their recovery of the debt due them, by the conveyances they complained of and sought to avoid, since they had instituted no proceeding to encounter the obstruction presented by those conveyances. Now, he said, equity never entertains a bill on behalf of a creditor, to impeach a conveyance of land by the debtor, on the ground of fraud, till the creditor has prosecuted his demand to judgment, which binds the land; or to impeach a conveyance by the debtor of personal property, till the creditor *has recovered judgment and delivered execution, whereby the debtor’s personalty is bound: and, even then, equity only interferes to remove the fraudulent conveyance out of the way. He cited Angelí v. Draper, 1 Vern. 399; Balch v. Wastall, 1 P. Wms. 445; Bennet v. Musgrove, 2 Ves. sen. SI; Shirley v. Watts, 3 Atk. 200; Higgins v. York Buildings Co., 2 Atk. 107; Colman v. Croker, 1 Ves. jun. 160; Wiggins v. Armstrong, 2 Johns. Ch, Rep. 144; Hendricks v. Robinson, Id. 296; Brinker-hoif v. Brown, 4 Id. 671 ; Chamberlayne v. Temple, 2 Rand. 384; Rhodes v. Cousins, 6 Id. 188. And he concluded, that the court had no jurisdiction to entertain this bill, either to decree the debt against Deison, or against Tate to declare the conveyances void, and set them aside.
Johnson admitted, that the general principle stated by Leigh, was sustained by the current both of english and american authorities. But, he said, the rule was not without exceptions ; and instanced Smithier v. Lewis, 1 Vern. 398; Stileman v. Ashdown, Amb. 13, and Chamberlayne v. Temple, in this court; wherein, it would be found, the creditors were relieved against conveyances of their debtors, without having exhausted their remedies at law. And he contended, that every case, in which a creditor was under the necessity of resorting to equity to prevent the sale of the property of his debtor justly liable to satisfy the creditor’s claim, under a fraudulent and void authority, or the dispersion, removal or eloignment of it, or to subject to his demand equitable interests that cannot be taken in execution, and can only be reached by the court of chancery, ought to be admitted as an exception. And such was this case:, the creditors were compelled to resort to the chancellor to prevent the sale of the property of their debtor, which was justly liable to satisfy their demand, and was yet about to be disposed of under the fraudulent deeds of trust. There was no other remedy for them, that would accomplish the ends of justice.
The statute of frauds and perjuries avoids fraudulent conveyances as against all persons, whose just demands “shall *or might be disturbed, hindered, delayed or defrauded.” 1 Rev. Code, ch. 101, <j 2, p. 372. He asked, whether a bond creditor was not exposed to the mischief? and therefore, a person entitled to avail himself of the statutory provision intended to prevent it?
He said, the reason of the english cases on the subject, had never" been clearly announced : but they appear tp have proceeded on reasons of policy and convenience affecting the remedy, not the right: they were much influenced by the consideration, that th.e main object of equitable interference in such cases, was to remove obstructions to the remedy at law, out of the way; and, as the english chancery could not award execution for debt decreed, any remedy which it could administer, must be incomplete till judgment had been recovered at law. Higgins v. York Buildings Co., 2 Atk. 107. The court of chancery of New York, where, as in Virginia, there is a statutory provision giving execution bn decrees in chancery, in like manner as on judgments at law, had followed the english cases, without considering the influence which that provision ought to have on the point. And he endeavoured to maintain, that this provision authorising the award of executions on decrees in chancery, dictated the propriety of entertaining a bill in our courts of chancery, on behalf of any creditor, at one and the same time to ascertain and decree the debt due him, award execution for it, and remove fraudulent conveyances out of the way of the decree and execution.
II. In the other case of Liggat & Matthews v. Morgan and others; Johnson premised, 1. that at the time of exhibiting this bill, Liggat & Matthews had obtained a decree against Deison for the debt due them, and had sued out a ca. sa. thereon, upon which Deison had been arrested, and had taken the oath of insolvency and surrendered his effects; so that now, clearly, the creditors had a lien on the property of the debtor, which was justly liable to satisfy their demand: and 2. that the deeds of trust of May and November 1820, appeared plainly from the evidence to be *fraudulent in fact, so far as they provided a security for Tate; there was no such debt due.
And then he contended, that Morgan, the surviving partner of Settle & Co. could claim nothing under the articles of agreement of July 1821, between Deison, Tate and Settle, providing for the security of the debt of 2093 dollars due Settle & Co. The motives and design of that agreement were apparent on the face of the transaction. The instrument was a transfer to Settle & Co. of Deison’s equity of redemption of the subject pledged by the deeds of trust of May and November 1820, and of the security thereby given to Tate, for the debt of 5000 dollars pretended to be due him; a transfer of Tate’s lien, pending the suit of Liggat & Matthews, in which it was impugned as fraudulent; such a transfer of a security for debt, as no creditor not conscious of its fraudulency would ever have made; which was intended to secure a consideration to Settle & Co. for forbearing themselves to contest the fairness of Tate’s claim; to defeat Liggat & Matthews, by interposing the claim of Settle & Co. and to preserve Tate’s claim to satisfaction out of the subject, though it was postponed to a distant day. The agreement was not only a pendente lite transaction, but it was a combination between Deison, Tate and Settle, wherein the fraudulent intentions of the two former must have been perfectly apparent to the latter; who, lending hitnself to the accomplishment of their fraud, in consideration of the advantage they agreed to let him derive from it, was a party' to the fraud. It was wholly immaterial, that the debt due to Settle & Co. was a real and just debt: they could not, on that account, hold an advantage obtained by a fraudulent combination with others against a just creditor. Sands v. Codwise, 4 Johns. Rep. 536; Garland v. Rives, 4 Rand. 282; Wright v. Hancock, 3 Munf. 521. Neither could the deed of trust of October 1821, whereby Deison conveyed to Haden and Reynolds, his equity of redemption of the subject mortgaged by his two former deeds *of May and November 1820, as a security for the debt due to Settle & Co. avail them, as against Liggat & Matthews. Settle & Co. could not claim as creditors, or in the combined characters of creditors and purchasers : they could only claim as purchasers ; as purchasers, namely, of Deison’s equity of redemption under the deeds of May and November 1820. Those deeds, though void as against just creditors, in respect to the security they provided for the pretended debt to Tate, were good between the parties. They were binding on Deison. And, as he could not claim any thing by virtue of his equity of redemption, so neither could Settle & Co. his assignees thereof, claim any thing, till the debt secured to Tate, as well as that due to the bank, should be satisfied out of the trust subject. Settle & Co. could not, any more than Deison, contest the fairness of Tate’s claim. Claiming under the same deeds under which Tate claimed, standing as Dei-son’s assignees in his place, and claiming only his rights, they recognised and admitted Tate’s rights; they took in subordination to them; they were postponed to him. Now, as Liggat & Matthews have obtained the preference to Tate, by establishing the fraudulency of his claims, they of necessity have the preference to Settle & Co. who can only claim after Tate.
He insisted, that, in the case of a conveyance tainted with actual covin however gross, or of a voluntary conveyance by a person overwhelmed with debt, if the grantor afterwards conveyed the same subject to a purchaser for valuable consideration having notice of the previous conveyance, and of the voluntary character of it in the one instance, or of the actual covin in the other, such a subsequent purchaser cannot prevail against the voluntary or fraudulent grantee. How was such a subsequent purchaser defrauded and deceived by the previous conveyance. His intromission was wilful. To allow it, would be to enable a fraudulent grantor to relieve himself from the consequences of his fraud, by the assistance of another person conusant of the fraud. The grantor bound by his previous conveyance however covinous, *'could, by no act of his own, relieve himself from it; but if he might be allowed to go to another person apprised of the fraud, sell the subject to him, and pocket the price, the purchaser would thus effectually relieve him from the obligation of his previous conveyance. And if pending the suit of a creditor against a fraudulent grantor and his grantees, to impeach and avoid the fraudulent conveyance, the grantor might sell the subject to a purchaser charged with full notice, and such a transaction should be upheld; what would this be, but to enable the grantor to convert a visible, fixed, tangible subject, into money, which may be easily withdrawn from the creditor’s pursuit? in effect, to enable the subsequent purchaser by combination with the fraudulent grantor, to defeat, in most cases intirely, and in all cases to delay, the creditor?
In the present case, he concluded, Settle & Co. purchased the equity of redemption of Deison, with full notice of Liggat & Matthews’s suit against Deison and Tate, and with a view to defeat them in the recovery of their just demands, by appropriating the subject in controversy to themselves ; which consideration alone sufficed to condemn their pretensions.
Stanard for the appellees,
represented that Settle & Co. were acknowledgedly fair creditors of Deison, as well as Liggat & Matthews: both parties were endeavouring as justly they might, to obtain satisfaction of their demands; the one by a suit in equity prematurely brought before they had a right to ask relief there; the other by diligence exerted out of doors. Whether the motive or the end was regarded, both were alike- blameless; and the question was, whether the means they respectively resorted to, were not equally fair and legal? If so, Settle & Co. whose equity was prior in time, had gained a fair preference.
As to the articles of agreement of July 1821, whereby Settle took a qualified assignment of the security provided for Tate by the deeds of trust of May and November 1820, *as a security for Deison’s debt to Settle & Co. he,said, there was no proof, and no ground to suspect, that Settle had, at the time, any notice of the fraudulency of the deeds of trust in respect to Tate’s debt, or of the pending suit of Liggat & Matthews, impugning those deeds as fraudulent in that respect. The fair inference from the circumstances attending that transaction, was no more than this: that Settle & Co. being just creditors of Deison, and finding Deison’s visible effects mortgaged to secure a debt due to the Farmers’ Bank, and another to Tate his father-in-law; Settle, or Settle and Deison uniting, prevailed with the father-in-law to give Settle & Co. the benefit of his security pro tanto. If Deison and Tate had been guilty of fraudulent conduct, or were actuated by fraudulent designs, there was nothing in the transaction to justify the imputation to Settle, of knowledge of their fraud, or confederacy with them in it.
The suit of Dig gat & Matthews against Deison and Tate, viewed as a lis pendens affecting the subject in controversy, could have no influence on Settle & Co.’s case. Ror that was a suit, which the chancellor could not properly entertain, and in which he could never make any decree that could bind the subject in dispute.
Then with regard to Deison’s deed of October 1821, whereby Deison conveyed to Haden and Reynolds, the equity of redemption of the subject mortgaged by his previous deeds of May and November 1820, as a security for his debt to Settle & Co.; he said, it was apparent, that Settle, before whom, as an alderman, the answers of Deison and Tate to Liggat & Matthews’s first bill, had just been sworn to, had thereby been put upon inquiry, and had been informed of the fraudulency of the deeds of May and November 1820, with respect to the security they provided for Tate, whereof he had obtained an assignment by the agreement of July preceding; and apprehending that Tate’s security of which he had obtained the assignment, was vitiated by fraud, and therefore worthless, he procured of Deison this deed of October 1821, mortgaging his equity of re- . demption *of the subject, to secure the debt due to Settle & Co. Rraudu-lent in fact this transaction could not be, unless diligence in a creditor to secure his just demand, in preference to other just creditors, be a fraud; which could not be pretended.
The obvious intent of this transaction, was to prefer Settle & Co.’s claim to satisfaction out of the trust subject, before Tate, if Tate’s claim should be set aside as fraudulent. But it was now contended, that whether Tate’s claim were fraudulent or not, Settle had notice of it; Settle & Co. took in subordination to it; they could not contest its fairness or validity. Settle had notice, certainly, of the deeds mortgaging the subject to Tate, but he had notice at the same time that those deeds, in respect to Tate, were fraudulent and void: could Settle’s notice of a covinous and void conveyance, purify .and make it good and valid? Suppose the same subject mortgaged to several creditors in succession, by different instruments, and the youngest mortgagee, at the time he accepted the security, apprised of the existence of all the previous mortgages, and of the fraudulency of some of them, must he when he' comes to redeem, pay off every debt charged upon the subject by the previous mortgages, not only those fairly due and secured in good faith, but such as were feigned and secured with fraudulent views? Or, if there be a deed of trust securing the payment of several debts due several creditors in succession, must he who has been postponed to another, either relinquish the security altogether, or consent that the debt preferred to his own shall be paid, though that debt be simulated, and the security as to it fraudulent? and this for the strange reason, that he knew that the security was in that respect fraudulent and void, and therefore paid no regard to it. The argument for the appellants must go the length of maintaining the affirmative of these and all such questions.
He referred to the statute, which, in one breath, avoids conveyances contrived of covin, to defraud creditors of their just demands, or to defraud and deceive subsequent purchasers; *1 Rev. Code, ch. 101, § 2, p. 372. If a conveyance be fraudulent, it can no more affect any purchaser, than it can affect any creditor.
He said, there was a wide difference, in the very essence of the transactions, between the supposed case of a purchaser buying of the grantor, a subject previously conveyed by a fraudulent deed, and actually paying him the purchase money, with full notice of the previous deed and of its fraud-ulency, much more of a suit on behalf of creditors to impeach and avoid the previous 'deed as fraudulent, and the actual case before the court, in which bona fide creditors have obtained a mortgage to secure a just debt, of a subject before fraudulently mortgaged to secure a pretended debt, with notice both of the previous mortgage and its fraudulent character. In the supposed case, the purchaser would really assist the fraudulent grantor"to relieve himself from the effects of his fraudulent conveyance, and to apply the subject to his own use, or aid him to defeat or delay the creditor suing to avoid his fraudulent conveyance, by converting the subject into money, which may be easily put beyond reach. In the actual case, the fraudulent grantor derived no benefit from his second mortgage of the subject, by which he only devoted it to the satisfaction of a debt- previously contracted and justly due. Deison’s mortgage to Settle & Co. was neither in design nor in effect, of any advantage to himself. A subsequent purchaser from a grantor who has before made a fraudulent conveyance of the same subject, with notice of the previous conveyance and the fraud, may, in so purchasing, commit or make himself party to a fraud; but such subsequent purchase with notice is not per se fraudulent. It may be innocent and just: the circumstances must determine the character of the transaction. And, in the present case, all that could be said was, that Settle had succeeded better and earlier, in securing-the debt due to Settle & Co. by diligence out of doors, than Liggat & Matthews by their proceedings in court.
Lastly, he strenuously contested the principle on which Johnson claimed priority of satisfaction for Liggat & Matthews: *that, as they had succeeded in excluding Tate, by shewing that the security provided for him was fraudulent, they obtained the preference to Tate, and by consequence the preference to Settle & Co. also, because as between them and Tate, they could only claim after Tate. The consequence of avoiding Tate’s security as fraudulent, was not, and could not be, that Liggat & Matthews were entitled to rank on the subject in Tate’s place; the just consequence was, that Tate had no place. His fraudulent security was an nulled. The next incumbrancer ranked on the subject, as if the annulled securitj’ had never existed. The question was, who was the next incumbrancer? Settle & Co. whose mortgage was executed in October 1821, or Liggat & Matthews whose decree was obtained in 1823? Suppose several debts se^-cured in the same mortgage, or several debts secured by several successive mortgages, and a creditor of the mortgagor should impeach or avoid one of the intermediate debts or mortgages as fraudulent, he thought it impossible to maintain that this creditor acquired priority over the subsequent mortgagees.
Fraudulent Conveyances —Impeachment by Creditors at Large. — In Wallace v. Treakle, 27 Gratt. 486, it is said: “Previous to this enactment (Code 1849. ch. 179, § 2, p 677; Code 1860, ch. 179. § 2; Code 1887, g 2460: Pol. Suppl. § 2460; Code W. Va. 1899, ch. 133, § 2, p. 889) it was the settled rule of the courts, that a creditor at large could not resort to a court of equity, to-impeach any conveyance made by his debtor, on the ground of fraud. If real estate was the subject of the conveyance, a judgment was regarded as sufficient. If goods and chattels or any equitable interest therein, although incapable of being levied on, were embraced in the conveyance, the creditor was required to take out execution and have it levied or returned, so as to show that his remedy at law had failed. Chamberlayne v. Temple, 2 Rand. 384; Kelso v. Blackburn, 3 Leigh 300; Rhodes v. Cousins, 6 Rand. 189; Tate v. Liggat & Matthews, 2 Leigh 84.” To the same effect, see the principal case cited in McAllister v. Guggenheimer, 91 Va. 319, 320.21 S. E. Rep. 475: Zell Guano Co. v. Heatherly, 38 W. Va. 415, 18 S. E. Rep. 612; foot-note to M'Cullough v. Sommerville, 8 Leigh 415.
For further information on this subject, see monographic note on “Fraudulent and Voluntary Conveyances” (IV, B, 3) appended to Cochran v. Paris, 11 Gratt. 348.
Sarne — Effect of Conveyance Made Expressly Subject Thereto. — In Claflin v. Foley, 22 W. Va. 434, 442, a debtor executed two deeds of trust to secure creditors on the same property. The second deed was expressly made “subject to the rights of the creditors secured” by the first deed. It was held that, by their contract, the creditors secured in the second deed acquired simply the equity of redemption in the property therein conveyed, and that, although the first deed was fraudulent on its face and the creditors therein named were not entitled to its benefits, yet as the trustee and creditors in the second deed expressly excepted the amount secured in the first deed from their security, they were by their contract precluded from taking any benefit therefrom under the trust deed to them: that, the first deed being fraudulent on its face, the law conclusively presumed that the creditors in the second deed knew that fact when they took their deed, and that it was their intention to except the amounts secured in the first deed for the benefit of any persons who should in law show themselves entitled thereto. For this holding the principal case is cited as authority. See the principal case also cited in Schaupp v. Hukill, 34 W. Va. 382, 12 S. E. Rep. 504, where a lease was executed subject to a preceding lease of the same property.
Deed of Trust Creditor — Right to Plead Usury in Previous Deed. — Where a creditor is secured by a second deed of trust on the same property, he has but the equity of redemption, and cannot plead usury against a creditor secured under the first trust deed. Lee v. Feamster, 21 W. Va. 114, citing the principal case. On the subject of usury, see generally, mono-graphic note on “Usury” appended to Coffman v. Miller, 26 Gratt. 698.
Same — Double Character of Purchaser and Creditor.— In Watts v. Kinney, 3 Leigh 272, 284, 292, 297, a judgment was recovered against a principal and his sureties. The sureties discharged the judgment arid took a deed of trust from the principal debtor for the amount of the judgment. It was argued that by the taking of a deed of trust, the sureties changed their character of creditors into the less advantageous character of purchasers, and the principal case was cited to uphold this argument. But Tucker, P., who delivered the opinion of the court said: “As to the position, that by taking the deed of trust, the sureties put off their character of creditors and assumed that of purchasers, I cannot understand that the opinion in Tate v. Liggat, referred to, designed to go so far as to say, that a creditor by judgment, who takes a mere collateral security for the paymentof his debt, thereby loses entirely the benefit of his j udgment lien; and unless the principle be extended thus far, it can have no influence upon this case. Be this as it may, I understand that the principle is not considered as settled by that case. I am of opinion, therefore, that there is no validity in this objection.”
And, in Runkle v. Runkle, 98 Va. 665, 666, 37 S. E. Rep. 279, a debtor conveyed to a trustee certain real and personal property to secure three classes of creditors. One of the creditors secured in the third class, while claiming under the deed, assailed the validity of other debts secured in the same deed. It was contended that a creditor, while asserting his rights as a beneficiary under a deed of trust given by his debtor to secure him and others, could not at the same time, attack the validity of another debt secured in the same deed; that the rights of a beneficiary under a deed of trust to secure debts are not the rights of creditors, but of purchasers, and that, when the creditor accepts the benefit of a trust deed, given by his debtor to secure the payment of his debt, he thereby voluntarily lays down and surrenders all his rights as creditor, and takes iu lieu of them his rights as purchaser. But the court held that the attitude of purchaser did not impair his right as creditor to assail other debts m the deed of trust as fraudulent or otherwise void. In delivering the opinion of the court, Judge Harrison said: “It is true that the Virginia decisions speak of creditors as purchasers, and for many purposes, they are so treated. Generally, the question is whether they are affected with notice of the fraud alleged, or their rights are affected by prior equities, but we have never understood that this doctrine had gone to the extent of holding that, where a creditor took a deed of trust to secure his debt, it changed his character of creditor into the less advantageous attitude of purchaser. This theory is not consistent with the course of the Virginia decisions. It seems to find some countenance in Tate v. Liggat, 2 Leigh 84, though it is not clear that the question was necessarily involved in that case. However that may be, the, view therein expressed was emphatically discountenanced by Judge Tucker in Watts v. Kinney, 3 Leigh 293, wherein he speaks of it ‘as an argument which rests upon a supposed decision of this court in Tate v. Liggat", and again, referring to the same subject, says, ‘the principle is not settled by that case.’ At all events, that principle does not appear to have been followed by any subsequent case. On the contrary, the uniform practice in Virginia, as shown by the decisions, has been an unquestioned recognition of the right of one creditor in a deed of trust to attack and have eliminated any debt thereby secured which could be shown to be fraudulent or void.”
But in Cox v. Wayt, 26 W. Va. 807, 817, a debtor conveyed certain real estate to a 'trustee to secure a certain creditor, which deed was never recorded. Later, the same debtor conveyed the same property in trust to secure other creditors, three of whom had notice of the unrecorded deed above mentioned. It was held that the three creditors secured in the second deed having notice of the existence of the prior unrecorded deed were purchasers with notice, and were bound by the unrecorded deed in the same manner as if it had been duly recorded; but that the other creditors secured in the second deed were subsequent purchasers for valuable consideration toithout notice and that therefore the unrecorded deed was void as to them. Judge Woods, in delivering the opinion of the court, said: “It is well settled that a creditor obtaining a mortgage or deed of trust upon the property of his debtor, must claim the same as a purchaser, and cannot claim it in the double character of creditor and purchaser. 2 Leigh 84. In asserting this principle, Judge Lomax says: -In regard to purchasers it would seem reasonable also, that purchasers, within the act relating to registration of conveyances, should be understood to mean the same description, as purchasers within the act relating to fraudulent conveyances. And as under the latter, creditors acquiring in any way, a lien upon their debtor’s property by contract with him, are regarded as purchasers, they would be, in like manner regarded under the former. 2 Lomax Dig. 489; Tate v. Liggat, 2 Leigh 104; Evans v. Greenhow, 15 Gratt. 153; Bird v. Wilkinson, 4 Leigh 266; Beck v. De Baptists, Id. 349; McClanachan v. Siter, 2 Gratt. 309.”
Same — Purchasers.—To the point that a creditor taking a deed of trust on real estate to secure his debt is a purchaser within the purview of the act relating to registration of conveyances, the principal case was cited in Johnston v. Slater, 11 Gratt. 325, 326; Weinberg v. Rempe, 15 W. Va. 858. See also, foot-note to Evans v. Greenhow, 15 Gratt. 153.
Appeal — Parties Standing on Distinct Grounds— Parties Standing on Same Ground — Effect. —When parties stand upon distinct and unconnected grounds, where their rights are separate and not equally affected by the same decree or judgment, then the appeal of one will not bring up for adjudication the rights or claims of the other; but where the parties appealing, and the parties not appealing. stand upon the same ground, and their rights are involved in the same question, and equally affected by the same decree or judgment, the appellate court will consider the whole case, and settle the rights of the parties not appealing, as well as those who bring up their cases by appeal. To this effect, the principal case was cited with approval in Walker v. Page, 21 Gratt. 652, 653 (see also, foot-note to this case); Saunders v. Griggs, 81 Va. 517; Morgan v. Ohio River R. Co., 39 W. Va. 25, 19 S. E. Rep. 591; foot-note to Purcell v. McCleary, 10 Gratt. 246; Garrett v. Carr, 3 Leigh 418; Blackwell v. Bragg, 78 Va. 541. See also, Lenows v. Lenow, 8 Gratt. 349, and foot-note.

Opinion:
GRBEvN, J.
It is admitted to be well settled, as a general rule, that a creditor at large (one who has not in some way acquired a right to have satisfaction out of his debtor's property, specifically), cannot come into a court of equity to impeach any conveyance made by his debtor on the ground of fraud; and, consequently, that the court of chancery had no jurisdiction in the first of these suits, unless, as it was insisted by the counsel for the appellees in that suit, the rule is liable to exceptions, within one of which this case falls.
The rule is founded upon the principle of the common law, essential to the enjoyment and circulation of property, that every debtor, until his property is specifically bound to the satisfaction of his debt, by his own agreement or by some judicial proceeding, has an absolute right to dispose of it at pleasure, to prefer one creditor to another, or even to waste or destroy it; a power which no tribunal whatever x'has authority to controul or limit. The obligation of a debtor is purely personal, and in no way affects his property or any portion of it; and so long as his person is amesnable to the process of the courts of justice, there are no means of reaching or affecting his property, but through that medium, and after judgment or decree against him personally. At common law, even when his person was withdrawn from the jurisdiction of the courts, so that process could not be served upon him, there were no means of reaching his property, but by outlawry, which forfeited it, and enabled the creditor in that indirect way to charge it. Our statutes have in such cases (those of absent and absconding debtors) allowed a remedy, which affects the property in the first instance: and these statutory exceptions prove the rule; for if, upon the general principles of equitable jurisdiction, a court of equity could in the first instance act upon the debtor's property, in favour of a creditor at large, these statutory provisions would have been superfluous, since no stronger cases than those provided for by the statutes, could have occurred to justify its interposition.
To this rule no solitary exception can be found, nor can one exist, until the principles of our law are so changed as to au-thorise courts of equity to administer the estates of living debtors, as if they were dead. The supposed exceptions to the rule, suggested in the argument, are susceptible of ready explanation. In Smithier v. Lewis, Vernon does not state that a fi. fa. upon the judgment, had been delivered to the proper officer: it was sufficient to state, that the bill was by a judgment creditor, leaving it to be inferred, from the known general rule, asserted in the very next case reported, that the creditor had proceeded so far upon his judgment at law, as to entitle him under that rule to resort to a court of equity; and in Madd. Chan. 169, this case is referred to, as one in which there had been a return of nulla bona. In cases in which lands are sought to be subjected, it is sufficient, that the creditor has obtained his judgment, without taking out an elegit, or, in case of the death of the *debtor after judgment, without reviving it against his heirs or terre-tenants, as in the case cited from Ambler, of Stileman v. Ashdown; because the judgment binds all the lands of which the defendant was seized at its date, or at any time thereafter, and the capacity to enforce it and overreach all intermediate alienations and incumbrances, gives the creditor a right to satisfaction out of that specific property, in preference to all others whose rights have not attached upon it before the judgment. Nor is the right of a creditor to, resort originally to a court of equity, against his debtor's property in the hands of his heirs or personal representatives, an exception to the rule: for, in those cases, there is no longer any one personally responsible to the creditor, or any one who has a right to dispose of the property at pleasure. The creditor has a right to satisfaction out of the specific property in the hands of the heir or executor, who is liable only in respect to such property; which, though not strictly a lien, is so far in the nature of one, that the creditor can follow the property into the hands of a fraudulent alienee of the debtor, or of his heir or executor. Of this class was the case of Cham-berlayne v. Temple, which was relied upon as an exception to the rule. There, the defendants were responsible as executors in their own wrong; and the jurisdiction of the court was founded on the right of a creditor to a discovery of assets, which is, universal, and strengthened in that case by the ingredient of fraud.
The circumstance also, that, with us, any execution wfiich may be taken upon a judgment, may be taken on a decree, was relied on as affecting the rule in question. I cannot perceive how that can possibly have such effect, or enlarge the jurisdiction of the court of equity in any respect whatever. It is only substituted as a more simple and direct means of enforcing decrees, than the original remedy by sequestration, which, in effect, bound all the debtor's property, real and personal, to a greater extent than any common law execution ; the rents and profits of all his lands instead of a moiety, asunder an elegit; the personalty from *'the time of awarding the commission, instead of the time of delivering the process to the officer, as in the case of a fi. fa. ; and it extended to subjects, which cannot be reached by any common law execution, such as the dividends of bank stock. Hyde v. Greenhill, 1 Dick. 106; Burdett v. Rockley, 1 Vern. 58; Hamline v. Lee, and Fawcet v. Fothergill, cited 4 Ves. 747.
Nor is there any thing in the idea suggested, thac, in case of a fraudulent deed, especially a deed of trust, the court can take jurisdiction upon the assumption, that the donees may be considered in equity, as trustees for all the creditors of the donor. If the deed be wholly fraudulent, then such a claim to hold the donee a trustee, would contradict the very foundation of the creditor's suit, who comes for relief upon the ground that the deed' is as to him utterly void; or if fraudulent and void, in part only, then the holder of the legal estate is in equity a quasi trustee, only as to such creditors as have otherwise acquired a right to satisfaction specifically out of the trust fund.
In the first case, therefore, the court had no jurisdiction as to the question of fraud, nor as to that of debt, taken separately,'nor when considered together, unless the addition of two negatives can make an affirmative; and the bill in that case should have been wholly dismissed. But as Deison has not appealed from that part of it decreeing the debt against him, the decree cannot be reviewed as to that point. It can only be reviewed, as it affects the appellant Tate, by setting aside the deeds or far as it provides for his claim, and giving costs against him.
The decree against Deison, and the proceedings under it, afforded a proper foundation for thé second of these suits, which brought fairly into discussion, the. claims of Biggat & Matthews, Tate and Morgan respectively, to satisfaction out of the trust fund. If the deeds in question were fraudulent and void so far as they purported to secure a debt to Tate (a question to be decided de novo in this cause) and Morgan had the priority over Biggat & Matthews, the ^injunction was properly dissolved. If, on the other hand, Biggat & Matthews were entitled in preference to Morgan, it should have been continued, and the fund secured to answer the final decree of the court. And the case presented this question, Whether a debtor making a fraudulent conveyance of personal property, and afterwards giving a deed of trust upon it to secure a debt to a creditor, who has full notice of the fraudulent deed, and afterwards another creditor recovers a judgment and delivers to the sheriffs a writ of fi. fa. or a ca. sa. which is executed, the creditor claiming under the deed of trust, or that under the judgment, is entitled to the preference? Unless, indeed, this question was anticipated by the circumstance, that in the agreement of the 9th July, as well as in the subsequent deed of trust under which Morgan claims, the alleged fraudulent deed is recited, and referred to as a valid deed; and nothing was assigned and conveyed by the deed of trust, but all Deison's right, title and interest in and to the propérty conveyed by the fraudulent deed; so that, in truth, the parties contracted only for Deison's equity of redemption, subject in the first instance to the payment of both the debts secured by the original deed, one of which is alleged to be fictitious: an inference, which is fortified by the circumstance, that in the first agreement Settle treated with Tate as entitled to a preference under the deed, and procured from him a transfer of his right in the surplus of the real property after satisfying the bank debt. And this I think is the true effect of the transaction, and that Morgan is estopped from impeaching the deed on the ground of fraud, even if in a case, where a debtor having made a fraudulent conveyance of personal property, af-terwards gives a deed of trust to a creditor who has notice, professing to convey, not his right only in the property fraudulently conveyed, but the property itself without any reserve, could impeach it for fraud. And without going any farther, I think Biggat & Matthews might be safely declared, on this ground, to have the preference over Morgan, if the original deed was fraudulent as to Tate.
*But supposing it otherwise, the question first stated occurs: for Tate did not relinquish his rights under the original deed, to any portion of the property, except the surplus of the real property after paying the bank debt; and all the real property has been disposed of, and proved insufficient to pay that debt. As to the personal property the case stands, as if Tate had not been party to the agreement of the 9th July.
A fraudulent conveyance binds the parties, and the donor has no right which he can transfer to another by his own act, except in cases provided for by statute. Our statute of frauds, pursuing in effect the provisions of the english statutes of the 13th and 27th Elizabeth, avoids fraudulent conveyances of real and personal property as to creditors, but only of real property as to subsequent purchasers. A subsequent purchaser of personal property, cannot impeach such a conveyance, otherwise than upon principles of the common law; according to which no such conveyance can be a fraud upon a subsequent purchaser with notice.
Creditors acquiring, in any way, a lien upon their debtor's property by contract with him, have uniformly been held to be entitled as purchasers, and in no case that I have met with in the english books, as creditors entitled to the benefit of the statute of the 13 Eliz. The seeming exceptions to *this rule, in the case of the assignees of a bankrupt, and the sheriff in case of an insolvent debtor, are not so in reality. They do not claim as purchasers from the bankrupt or insolvent debtor, and so bound, as he was, by his former conveyances, whether fair or fraudulent ; but, as standing' in the shoes of the creditors, and representing their rights; and in case of bankrupts and of insolvent debtors discharged under the statute, the creditors acquire a lien on the debtor's property, not by force of his assignment, but by operation of law, the legislative provisions in these cases operating as statutory executions. These subjects were fully examined in the case of Shirley v. Long, 6 Rand. 735, and need not be discussed here in detail. If a creditor taking a lien, by contract with his debtor, upon his personal property before fraudulently conveyed, could unite to his character of a purchaser, that also of a creditor entitled to claim under the statute of the 13 Eliz. we should probably find many cases to that effect in the english boobs; but we find none. And the settled rule, that no creditor is entitled to avail himself of that statute, who has not in fact been impeded by the fraudulent conveyance, in his proceeding in a due course of law to procure satisfaction of his debt, seems to negative the proposition. Nor is there any equity as between the creditors in such a case; the preference being due to him who has acquired the advantage by greater diligence in the pursuit of his legal remedies. Nor can the debtor complain, that he has lost the right to prefer one creditor to another by his mere volition, in consequence of his own fraud, although that preference might be incidentally given by confessing a judgment.
The only case conflicting with these views, is that of Bayard v. Hoffman, 4 Johns. Ch. Rep. 450, in which a debtor, having conveyed a quantity of public stock to trustees, for the benefit of his wife and children, afterwards assigned all his effects to trustees for the payment of all his debts, and this with the concurrence of many of his creditors, from whom, however, the existence of the prior conveyance of the *stock was concealed. And chancellor Kent held, that the voluntary conveyance was void under the statute, but assigned no reason for this judgment, except to assimilate an assignment by a debtor, of all his effects for the satisfaction of all his creditors, to the case of the assignees of a bankrupt in England ; the striking difference between which has been before alluded to, and was more fully examined in Shirley v. Long, to which I refer.
Upon the whole, I think the order, in the case of Liggat & Matthews v. Morgan and others, dissolving the injunction should be reversed, and the cause remanded, that it may be further proceeded in, and that the marshal of the court, in whom the rights of Deison vested, by operation of law, upon his surrender of his effects as an insolvent debtor, may be made a party.
The words of the Virginia statute, are: "Every gift, grant or conveyance of lands, tenements, hereditaments, goods or chattels, or of any rent, common or profit out of the same, by writing or otherwise, and every bond, suit, judgment or execution, had or made, and contrived of malice, fraud, or covin, collusion or guile, to the intent or purpose to delay, hinder or defraud creditors of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures, or to defraud or deceive those who shall purchase the same lands, tenements or hereditaments, or any rent, profit or commodity out of them, shall be from henceforth deemed and taken (only as against the person or persons, his, her or their heirs, successors, executors, administrators or assigns, and every of them, whose debts, suits, demands, estates, interests, by such guileful and covinous devices and practices, as is aforesaid, shall or might be in any wise disturbed, hindered, delayed or defrauded), to be clearly and utterly void, any pretence, colour, feigned consideration, expressing of use, or any other matter or thing, to the contrary notwithstanding." — Note in Original Edition. -