Case Name: Skipwith's Ex'or v. Cunningham &c.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1837-04
Citations: 8 Leigh 271
Docket Number: 
Parties: Skipwith's Ex'or v. Cunningham &c.
Judges: (Absent Brooke, J.)
Reporter: Virginia Reports
Volume: 35
Pages: 904–913

Head Matter:
Skipwith's Ex'or v. Cunningham &c.
April, 1837,
Richmond.
(Absent Brooke, J.)
[31 Am. Dec. 642.]
Judgment — Relation—Commencement of Term — Priority between Judgment and Deed of Trust. — It is well settled as a general rule, that the lien of a judgment upon the land of the debtor relates back to the commencement of the term at which the judgment was obtained, and overreaches a deed of trust on the land executed by the debtor on or after the first day of the term. But the term is not considered as necessarily commencing on the day appointed by law for its commencement. A deed admitted to record on the day appointed *for commencing the term, but before the day on which the court actually commences its session, will be unaffected by the lien of the judgment.
Deed of Trust — Execution by Beneficiary. — It is not necessary to the validity of a deed of trust, that it should be executed by the cestui que trust. The deed operates to pass the legal title so soon as executed by the grantor and the trustees, and can only be avoided by the dissent, express or implied, of the cestui que trust.
Same — To Secure Creditors:); — Assent of Creditors. — A deed of trust conveying- land for the benefit of creditors, which is executed by the maker of the deed and the trustees, and duly recorded before a judgment is obtained ag-ainst the maker, will intercept the lien of the judgment, although the creditors may not have given their assent to the deed until after the judgment In such case, even in a court of equity, the equity of the judgment creditor Will generally be considered inferiour to the equity of the creditors claiming under the deed.
Same — Same —Preferences.!—The statute to prevent fraudulent conveyances applies to no conveyance made bona fide for valuable consideration, and does not prevent a debtor in failing circumstances from preferring one class of creditors to another.
Same — Samef—Same—Release Clause. — A d ebtor conveys the whole of his property to trustees, upon trust to sell the same, and out of the net proceeds pay in the first place certain preferred creditors, and then disburse the residue in paying, pro rata, all the just debts due from him to any other creditors who should, within four months, release the debtor from farther claim: Heed, notwithstanding the provision for a release, the deed is valid, and those embraced by its terms will have the benefit of the property in preference to a judgment creditor. •
Same — Same —Bill to Set Aside — Right to an Account. —In such case, however, the judgment creditor has a right to an account of the trust fund, and to the payment of his debts out of the surplus, if any, after satisfying the preferred creditors and those who acceded to the composition.
By deed bearing date the 13th of October 1827, between Richard M. Cunningham of the first part, William H. Brodnax and Charles If. Osborne of the second part, and such creditors of Cunningham as might testify their assent to the terms of the deed in the mode therein prescribed, of the third part, it was recited that Cunningham was -justly indebted to several creditors in different and large amounts, involving, in his judgment, equal legal but different moral and honorary obligation on his part to adjust and secure them: that he was anxiously *solicitous to provide, as far as in his power, a full and ample indemnity for the safety and ultimate discharge of whatever he owed to any person and in any mode, by constituting a fund for that purpose of every article of property which he held or had legal title to, and which he was desirous to convey in such mode and on such principles as would best subserve this desirable object, and prevent his property from being exposed to injurious sacrifices, to the certain injury of some or all of the said creditors, and render it as extensively available as under existing circumstances it might be: and that of those claims which he supposed to possess this superiour moral obligation, there were the following, to wit: (Here were stated the names of certain creditors, the amounts due them, and on what account). In consideration of which premises, Cunningham conveyed to Brodnax and Osborne, certain real estate in Brunswick county, sundry slaves, all his stock of horses, mules, cattle, sheep and hogs, crops of every description, whether growing or severed from the lands, all his household and kitchen furniture, his library, his watch and appurtenances, “together with all debts of every description due to the said Cunningham in any mode or dignity, and from any person or persons whatsoever, with the exception of 350 dollars out of the debts due to said Cunningham for seasons to his stud horse Arab the last season, which he reserves to his individual use and disposition, for the purpose of paj'ing some small claims due from him, of high honorary obligation, which are not now liquidated or specifically ascertained;” upon trust that Brodnax and Osborne, or the survivor, should proceed, so soon as they or the survivor might deem expedient and proper, to sell the whole of the said property, either publicly or privately, in whole or in part, as they'or he might adjudge best, the said lands on three equal annual instalments, and all the other property on a ciedit of 12 months, or such other terms as *they or the survivor might deem more expedient, and collect the proceeds, as well as the debts aforesaid transferred, with all practicable dispatch, and out of the proceeds, after the discharge of the necessary expenses incident to the execution of the trust, pay and satisfj- in the first place all the claims specifically euurated as debts of superiour honorary obligation, and disburse the residue in the payment and satisfaction, pro rata, of all the just debts due from the said Cunningham to any other creditor or creditors who should, within four months after the date of the deed, assent to the terms thereof, by subscribing- a release to be appended thereto; whereby the said creditor or creditors should, in consideration of his or their claim or debt coming in for participation of the said balance pro rata, discharge and forever acquit the said Cunningham, his heirs, executors and administrators, from all responsibility for any portion (if any) of such debt, claim or demand as might remain unpaid in the pro rata distribution of the said balance; excepting however, expressly, from all benefit under the operation of the deed, any creditor or creditors who might within that period issue any writ of capias ad satis-faciendum against the body, or writ of fieri facias against the goods, or other process of execution against the lands, of the said Cunningham. And upon further trust that if any residue should remain in the hands of the said trustees or the survivor, of the avails of the said property and debts, after all the debts specifically or generally provided for were satisfied, the same should be paid to said Cunningham, his executors, administrators or assigns.
The deed was executed by Cunningham and the trustees, and upon Cunningham’s acknowledgment was admitted to record in the office of Brunswick county court on the ISth of October 1827. It was likewise admitted to record in the office of the hustings court of Petersburg on the 1st of November 1827. Afterwards a writing was ^executed by several creditors, reciting that they agreed to accept of the terms of the deed, and giving such a release as the deed required. This release was executed in February, by one creditor on the 8th, by another on the 9th, by another on the 12th, and by the last on the 13th.
At October term 1827 of the superiour court of Petersburg, Humberston Skipwith as executor of lady Jean Skipwith obtained a judgment against Cunningham, by confession, for a debt of 4187 dollars 88 cents, besides interest and costs, upon which an elegit issued the 28th of March 1828. The elegit was returned (informally) . “no effects.”
Afterwards Skipwith filed a bill in the superior court of chancery holden at Richmond, setting forth that the term of the court at which his judgment was obtained commenced on the 15th of October 1827, but that the judge did not attend until the third day of the term, and the judgment was rendered on that or a subsequent day: charging that Cunningham’s deed, though dated on the 13th of October, was in fact written on the 14th, which was Sunday, and conveyed all his property: insisting that the judgment created a lien on the real estate, paramount to that created by the deed: stating, however, that before the elegit was sued out, the trustees had sold the land, for the purchase money of which they still held bonds: and claiming to “have satisfaction of the judgment, out of the proceeds of the sale of the land. The bill further charged that the deed was in fact made for the sole purpose of hindering and obstructing the plaintiff and one other creditor from recovering their debts; and without impeaching or disturbing the provision which had been made for the creditors specificially enumerated (because so far it might be fair, and after satisfying them, the surplus was sufficient for the complainant) the bill particularly insisted that the next provision, made for those only who -would release, was ^fraudulent in law, and void as to the complainant, and that therefore he was entitled to have the same portion of the estate as he would have been entitled to if he had released. Cunningham and his trustees were made defendants, and the bill prayed that they might be required to pay the amount of the judgment; and concluded with a prayer for general relief.
Cunningham answered, that the term at which the judgment was rendered commenced on the 17th of October 1827, and not on the 15th, as it might have done had the judge attended for the purpose; that the deed was executed when it purports to have been, and for the motives and considerations apparent on its face ; that the conveyance was made not for the purpose .of hindering and obstructing the complainant and one other creditor from recovering their debts, but to prevent their obtaining their debts exclusively and to the prejudice of others equally just and meritorious, and for the purpose of placing them on a footing of equality with all the other just creditors of the respondent, except a class of such as, on every principle of honour and moral propriety, he deemed it his duty to prefer in the first instance. The trustees answered also; and their answers supported that of Cunningham.
The chancellor, being of opinion that the rule that judgments should refer to the first day of the term cannot apply till the judge has actually commenced the business thereof; that the deed held priority of the judgment; that it was not shewn to be fraudulent; and that the plaintiff, not being provided for in the deed, could not claim under it, — -decreed that the bill of the plaintiff be dismissed with costs. From which decree the plaintiff appealed.
In this court the cause was argued by John Robertson for the appellant, and Johnson and Macfarland for the appellees, upon the following questions:
*1. Does the judgment by confession in favour of the appellant against Cunningham the debtor, recovered on the 17th of October, the first day of the actual session of the fall term of the superiour court of Petersburg, overreach the deed of trust to Brodnax and Osborne for the benefit of creditors, dated the 13th of October, and recorded in Brunswick the 15th of October 1827, the day on which by law the fall term ought to have commenced? The appellant relied upon the decisions in The Mutual Assurance Society v. Stanard &c., 4 Munf. 539, and Coutts v. Walker, 2 Eeigh 268. And the appellees argued that those cases did not make the judgment relate to the first day of the term appointed by law, but that a relation to the first day of the actual term complied with the rule.
II. Does the deed operate against a judgment creditor, before its acceptance by the creditors embraced by its provisions? The appellant insisted that deeds of trust made for creditors without their assent, are to be regarded as voluntary and revocable as respects creditors who object; and relied upon Walwyn v. Coutts, 3 Meriv. 707; S. C., 3 Simons 14; 5 Cond. Eng. Ch. Rep. 7; Gar-rard v. Eord Lauderdale, 3 Simons 1; 5 Cond. Eng. Ch. Rep. 1; Page v. Broom, 4 Russ. 6; 3 Cond. Eng. Ch. Rep. 543. The appellees argued that a deed would take effect from its delivery to a stranger for the use of the grantee, though made without his knowledge, if he should subsequently assent. 1 Tucker’s Com. 238; Hatch v. Hatch, 9 Hass. Rep. 307; Ruggles v. Lawson &c., 13 Johns. Rep. 285. And they relied upon Marbury v. Brooks, 7 Wheat. 556, and Brooks v. Marbury, 11 Wheat. 78, as full authority to sustain a deed of trust in favour of creditors not consulted nor informed at the time of making the deed, but afterwards assenting to and claiming under it. They also referred to 2 Kent’s Com. 420, and the cases there cited.
*111. Is the deed fraudulent and void? Besides taking the ground that the deed was fraudulent in fact, the appellant argued that it should be deemed fraudulent in law; 1. because the grantor provided for retaining 350 dollars to be applied by himself at his discretion. Burd v. Smith, 4 Dali. 76; 1 Kent’s Com. 422. 2. Because of the condition imposed for a release, and the direction to pay the grantor the surplus. 2 Kent’s Com. 421. To which it was answered, that the right of a debtor in failing circumstances to discriminate among his creditors was unquestionable; and creditors who would have had no right to complain If they had been excluded altogether, could not object tnat the deed was void, because it provided for them less than they desired, or was clogged with provisions objectionable to them. Pearpoint and Lord v. Graham, 4 Wash. C. C. Rep. 232; 1 Kent’s Com. 421; Garland v. Rives, 4 Rand. 282.
Judgments —Relation — Commencement of Term.— At common law, for certain purposes, a term of court was considered but one day, and all judgments and decrees entered during the term, bore date as of.the first day. In Virginia this legal fiction, though at first combated, became firmly established, and has always prevailed, until, as in West Virginia, it has become ingrafted upon the Code of the state (Va. Code 1887, § 3567; W. Va. Code 1899, p. 933). Womer v. Ravenswood, etc., Ry. Co., 37 W. Va. 290, 16 S. E. Rep. 489; Dunn v. Renick, 40 W. Va. 360, 22 S. E. Rep. 70; Hockman v. Hockman, 93 Va. 456, 25 S. E. Rep. 534; foot-note to Jones v. Myrick, 8 Gratt. 179 (containing excerpt from Hockman v. Hockman, 93 Va. 456, 25 S. E. Rep. 534), all citing principal case as authority. Thus, where on the first day of a term of court, a judgment is confessed, and on the last day of the same term, an office judgment is confirmed, both judgments must be treated as judgments rendered on the same day, and at the same time. Neither has precedence over the other in point of time. In such case the law takes no notice of the fractions of the day. Brockenbrough v. Brockenbrough, 31 Gratt. 600, citing principal case, Coutts v. Walker, 2 Leigh 268, and Withers v. Carter, 4 Gratt. 407. But the term of court is not to be considered as necessarily commencing on the day appointed by law for its commencement; and thus a deed admitted to record on a day appointed for commencing a term, but before the day which the court actually commenced its session, is unaffected by the lien of a judgment rendered during the term. Brown v. Hume, 16 Gratt. 465, citing principal case.
See further, monographic note on “Judgments” appended to Smith v. Charlton, 7 Gratt. 425.
Same — Doctrine of Relation — To What Judgments Applicable. — In order for a judgment rendered during the term to relate back and take effect from the first day of a term, the action in which the judgment is rendered must be in such a condition that it might have been tried if it had happened to occupy the first place on the docket. Hockman v. Hockman, 93 Va. 456, 25 S. E. Rep. 534, citing principal case. See also, foot-note to Jones v. Myrick. 8 Gratt. 179; foot-note to Withers v. Carter, 4 Gratt. 407; monographic note on "Judgments” appended to Smith v. Charlton, 7 Gratt. 425.
[Deed of Trust — Consideration—Execution by Beneficiaries. — A pre-existing debt is, of itself, a valuable consideration for a deed of trust executed for its security; which deed, if it be duly recorded, and was not executed with af raudulent intent, known to the trustee or the beneficiaries therein, will be valid against all prior secret liens and equities and all subsequent alienations and incumbrances. Itis not necessary to the validity of the deed, that it should be executed by the trustee or the beneficiaries, or even that they should know of its existence before the intervention of subsequent claims. The deed being apparently for the benefit of the creditors thereby secured, their acceptance of it will be presumed until the contrary appears. If any of them refuse it, their refusal will relate back to the date of the deed, and avoid it ab initio as to them. These principles are now well settled in this state, as the following cases sufficiently show; Garland v. Rives, 4 Rand. 282; Skipwith v. Cunningham, 8 Leigh 271; McCullough v. Sommerville, 8 Leigh 415; Lewis v. Caperton, 8 Gratt. 148; Phippen v. Durham, 8 Gratt. 457; Dance v. Seaman, 11 Gratt. 778, and Wickham v. Martin, 13 Gratt 1427, — Moncuke, J., delivering the opinion of the court in Evans v. Greenhow, 15 Gratt. 157.
Deeds — Acceptance of Grantee. — The acceptance of grantee in a deed for his benefit is always implied in the delivery of the deed, and the law presumes that every estate is beneficial to the party to whom it is devised or conveyed until he renounces it. Bowden v. Parrish, 86 Va. 69, 9 S. E. Rep. 616, citing principal case as its authority.
And in Guggenheimer v. Lockridge, 39 W. Va. 461, 19 S. E. Rep. 875, it is said: “In all conveyances beneficial to the grantee the assent of the grantee Is presumed until his dissent be shown, and this because it is for his benefit, and it is not likely one will disclaim a benefit; and also it is unreasonable that when the grantor has made a deed the estate should still remain in him, and also it is to prevent uncertainty as to where the freehold is. Skipwith v. Cunningham, 8 Leigh 272, 281, 285; Zell Guano Co. v. Heatherly, 38 W. Va. 410, points, 18 S. E. Rep. 611; 2 Greenl. Ev. 297 ; 2 Bl. Comm. 309; Halluck v. Bush, 1 Am. Dec. 60; Peavey v. Tilton, 45 Am. Dec. 365; Lady Superior v. McNamara. 49 Am. Dec. 184; 5 Wait, Act. & Def. 3814. As to delivery of deed, see Lang v. Smith, 37 W. Va. 725, 17 S. E. Rep. 213; Newlin v. Beard, 6 W. Va. 110.” See principal case also cited in Calwell v. Prindle, 19 W. Va. 651.
See generally, monographic note on “Deeds” appended to Fiott v. Com., 12 Gratt. 564.
Same — Delivery.—Delivery is absolutely necessary to a deed. It is the final act, the formal declaration of the grantor’s determination to complete the conveyance or enter into the contract. Pirst, there is a determination of the mind, when a man designs to pass a thing by deed, and upon that the party causes it to be written, which is one part of the deliberation; sealing is another, and delivery is the consummation of his resolution. Lang v. Smith, 37 W. Va. 734, 17 S. E. Rep. 216, quoting from Skipwith v. Cunningham, 8 Leigh 271.
In Hunt v. Brent, 1 Va. Dec. 261, it is said: “Neither a date nor, at common law, even the signature of the party is essential to the validity of an instrument as a deed; but there cannot be a deed without writing, sealing and delivery. There may, however, be a sufficient delivery without words or by words only, without any act of delivery; as where a party to an instrument sealed it and declared in the presence of a witness that he ■delivered it as his deed and yet kept it in his own possession; but nothing further transpired to qualify the declaration, or to show that he did not intend it to operate immediately; and so it has been decided that a delivery to a third person for the use of the covenantee is sufficient if the grantor parts with all control over the instrument; although the person to whom the deed is so delivered be not the agent of the covenantee. Chitty on Contracts, p. 3; Skipwith v. Cunningham, 8 Leigh 281; Garrams v. Knight, 5 Barn. & Cres. 671, 12 Eng. Com. Law Reports 357.”
If an obligation, complete and perfect, be delivered by the obligor to a third person for the use of the obligee, it is the deed of the obligor immediately. The deed only becomes inoperative by the refusal of the obligee to receive it. In such case the delivery is the act of the principal or obligor and not of the third person or agent. Preston v. Hull, 23 Gratt. 606.
See further, monographic note on “Deeds” appended to Fiott v. Com. 12 Gratt. 564.
Assignment for Benefit of Creditors. — Upon this subject, see foot-note, to Gordon v. Cannon, 18 Gratt. 387; foot-note to Marks v. Hill, 15 Gratt. 400; mono-graphic note on Assignments for the Ben efit o f Creditors” appended to French v. Townes, 10 Gratt. 513. These notes discuss the subject at length and collect the Virginia and West Virginia cases in point. The principal case is a leading one on the subject, and the principals laid down therein have had great weight in determining future decisions. No attempt has been made to collect below all the cases authorizing the propositions there laid down, but only those cases citing the principal case as their authority.
§5ame — Preferences.—A debtor in failing circumstances may make a valid, assignment for the benefit of his creditors, and he may make preferences as between them. Paul v. Baugh, 85 Va. 958, 9 S. E. Rep. 329; Evans v. Greenhow, 15 Gratt. 156; Williams v. Lord, 75 Va. 402; Lucas v. Clafflin, 76 Va. 277; Dance v. Seaman, 11 Gratt. 781; Wolf v. McGugin. 37 W. Va. 556. 16 S. E. Rep. 798. And it is not necessary to the validity of such a deed, that the creditors should have been consulted beforehand. Dance v. Seaman, 11 Gratt. 781.
Same — Same—Release Clause — Surplus.—Whatever may be the law and course of judicial decision in other states on the subject, there can now be no doubt that in this state, a debtor in failing circumstances may make a valid assignment of his whole estate (subject, however, to existing liens thereon), for the benefit of his creditors, in such order of priority as he may choose to prescribe in the assignment ; and though his estate be insufficient for the payment of all of his debts, he may lawfully subject it, in the first place, to the payment iri full of such of his debts as he may choose to prefer, then to the payment pro rata of the claims of such of his other creditors as may, in a limited period (which should be reasonable), accept the terms of the assignment, and release him from all further or other liability on account of said claims. And such an assignment may be valid, even though it do not’direct any surplus which may remain after satisfying the claims of the accepting and releasing creditors to be applied to the payment of his other debts, or any of them ; or even though it direct any such surplus to be paid to the debtor himself. That such is the doctrine in this state is abundantly shown by the cases of Skipwith v. Cunningham, 8 Leigh 271; Kevan v. Branch, 1 Gratt. 274; and Phippen v. Durham, 8 Gratt. 457. Whether the doctrine be sound in its origin or not, it ought to govern our courts until otherwise provided by the legislature. Moncure, P., in Gordon v. Cannon, 18 Gratt. 395. To the point that a deed of assignment preferring creditors is valid notwithstanding the fact that it contains a provision for a release, see principal case also cited in Long v. Meriden Britannia Co., 94 Va. 596, 27 S. E. Rep. 499; Clarke v. Figgins, 27 W. Va. 669.
Same — Release Clause — Effect.—In Virginia, since the decision of Skip'wiih v. Cunningham, the principle has been established that a deed of trust made by a debtor conveyiug his property for security of creditors, which is in all other respects fair and bona fide, is not to be treated as fraudulent because it imposes upon the creditors intended to be secured the condition of releasing to the grantor so much of their respective demands as may remain unsatisfied after the application thereto of the proceeds of the trust subject, and requires of them their acceptance of the provisions of the deed within a given time. Phippen v. Durham, 8 Gratt. 464, 475. 478; Wickham v. Lewis Martin & Co.,13 Gratt. 444; Gordon v. Cannon, 18 Gratt. 410; Hurst v. Leckie, 97 Va. 560, 34 S. E. Rep. 464; Clarke v Figgins, 27 W. Va. 669.
Same — Same — All the Debtor’s Property Must Be Conveyed.™But, in order to maintain the validity of such a deed, all the debtor’s property must be conveyed ; any omission of property for the purpose of securing a substantial benefit to the debtor (except such property as may be exempt by law from, distress or levy) conclusively shows an intention ’to hinder and defraud creditors. Paul v. Baugh, 85 Va. 961, 9 S. E. Rep. 329; Phippen v. Durham, 8 Gratt. 465; Gordon v. Cannon, 18 Gratt. 396; Quarles v. Kerr, 14 Gratt. 55; Williams v. Lord, 75 Va. 400; Robinson v. Mays, 76 Va. 716. But the omission of a comparatively small amount, where all is substantially conveyed, does not avoid the deed in the absence of a fraudulent intent ; for, in such case, “the deed essentially complies with the requirements of the law.” Paul v. Baugh, 85 Va. 961, 9 S. E. Rep. 329; Phippen v. Durham, 8 Gratt. 465; Long v. Britannia Co., 94 Va. 605, 27 S. E. Rep. 503. Thus the law does not forbid the retention of a few hundred dollars by an insolvent debtor for paying small debts, when circumstances warrant the measure, but the deed ought not to conceal the fact from creditors whom it requires to release. Shufeldt v. Jenkins (Cir. Ct. E. D. Va.), 22 Fed. 368.
But an assignment by an insolvent debtor of a part only of his estate made in good faith for the purpose of raising money for existing creditors, and reserving the surplus to himself will not be set aside as fraudulent and void ; for the law, even without the provision, would imply such reservation. Didier v. Patterson, 93 Va. 540, 25 S. E. Rep. 661.
Same — Execution Pendente Lite — Effect,—And the execution of a deed pending a suit against the grantor by a creditor not secured by it, and a short time before the term at which it was probable judgment would be rendered against him, does not vitiate the deed. Paul v. Baugh, 85 Va. 958, 9 S. E. Rep. 329; Sipe v. Earman, 26 Gratt. 569; Williams v. Lord, 75 Va. 402; Lucas v. Clafflin, 76 Va. 277.
Same — Reservations—Postponement oí Sale — Credit Sale. — In Virginia and West Virginia, the express power to sell on credit on the face of an assignment for the benefit of creditors, does not render the assignment fraudulent on its face. Kyle v. Harveys, 25 W. Va. 728; 729. “That the reservation, of an interest in the property, by postponing the time of sale, or directing a sale on credit, or providing for the payment of the surplus after satisfying the creditors secured, do not of themselves furnish evidence of fraudulent intent, has been affirmed by the repeated decisions of this court.” Dance v. Seaman, 11 Gratt. 781; Gardner v. Johnston, 9 W. Va. 407. See also, Landeman v. Wilson, 29 W. Va. 723, 2 S. E. Rep. 214; Young v. Willis. 82 Va. 299. See also, foot-note to Janney v. Barnes, 11 Leigh 100.
Same — Retention of Possession by Grantor until Sale. —The provision in a deed of trust to secure creditors that the grantor shall retain possession, use, and enjoyment of the property until the sale provided for is made, where the property is not perishable in its nature, nor consumable in its use. as household and kitchen goods, is not even a badge of fraud unless made so by other provisions orthesurroundingcircumstances. Klee v. Reitzenberger, 23 W. Va. 755; Shattuck v. Knight. 25 W. Va. 597; Landeman v. Wilson, 29 W. Va. 723, 2 S. E. Rep. 214.
Same — Private Sale. — Nor does a provision authorizing a private sale by the trustee make the deed fraudulent. Kyle v. Harveys, 25 W. Va. 730; Landeman v. Wilson, 29 W. Va. 709, 2 S. E. Rep. 206.
Same — Failure to Annex Schedule Referred to — Effect. —A deed conveys a stock of goods of the grantors, and refers to a schedule of the goods which when made out is to be considered as annexed to the deed, and to be taken as a part of it. Though the schedule is not annexed before the recording of the deed, the deed is valid without it. Gordon v. Cannon, 18 Gratt. 398.
Same — Some Debts Secured Illegal — Effect.—In a deed of trust to secure various creditors, whose claims are distinct, although one or more of the debts secured may be tainted with fraud or may for some cause be held illegal and invalid, the other debts therein secured shall not be thereby affected, if they are based upon a good and valid consideration, and the parties to whom they are payable have not participated in the fraud which renders the said claims invalid, or had notice of the same. Ruffner v. Welton, etc., Co., 36 W. Va. 258, 15 S. E. Rep. 52, 53; Rixey v. Deitrick, 85 Va. 45, 6 S. E. Rep. 615; Craig v. Hoge, 95 Va. 283, 28 S. E. Rep. 317. See, also, Gordon v. Cannon, 18 Gratt. 423, 424 (dissenting opinion of Rives. J.).
Same — When Binding. — In Zell Guano Co. v. Heatherly, 38 W. Va. 434, 18 S. E. Rep. 618, it is said; "If it (i. e. a deed of trust to secure debts generally) has been sanctioned by previous assent or subsequent ratification, although by subsequent assent or ratification, by act in pais, by trustee or cestui que trust, before the rights of other parties attach, it becomes irrevocably binding. Skipwith v. Cunningham (1837), 8 Leigh 271, since followed. See Spencer v. Ford (1843), 1 Rob. (Va.) 648.”
See (‡) on p. 905.
Same — Bill to Set Aside — Right to an Account. — In a bill by a lien creditor to set aside a deed of trust for payment of debts on the ground that it is fraudulent of its face, the bill does not ask for an account. but there is a prayer for general relief. Though the deed is sustained as valid, the plaintiff is entitled to an account of the trust fund, and to the payment of his debt out of the surplus if any after satisfying the debts secured by the deed of trust. Marks v. Hill. 15 Gratt. 419; Sipe v. Earman, 26 Gratt. 571, both citing principal case.

Opinion:
TUCKER, P.
The counsel in this case have very laboriously discussed a question which appears to me to have been completely closed by the well considered decisions of this court. In The Mutual Assurance Society v. Stanard, 4 Munf. 539, the court were of opinion that the lien of a judgment upon the lands of the party relates back to the commencement of the term at which it is obtained, and overreaches a deed of trust or other incumbrance on the land executed on or after the first day of the term. In the case of Coutts v. Walker, 2 Leigh 268, the counsel for the appellant suggesting that the point had not been argued in the case of The Mutual Assurance Society v. Stanard, and that it ought not therefore to be considered as settled by that adjudication, they were permitted to argue it at length; which was done with much ability. The opinion of the court, consisting of four judges, was unanimous, and was delivered by judge Green, who, with his accustomed ability, investigated the doctrines of the common *law on the subject very fully, and concluded with declaring that the former decision was right and ought to be adhered to. After this deliberate judgment of the court affirming the principle which had been settled in a former case, I think the question should not have been suffered to be again stirred; for it must be remembered that this is not a mere question of practice. The principle is in effect a canon of property, and directly involves, in various instances, the title to real estate. It is unnecessary, then, that we should enter into this investigation anew, or follow the counsel through all their learned arguments, though I am- well satisfied, if we did so, we. should arrive at the same result that our predecessors have done. The ver3' enactment of the statute 29, Cha. 2, ch. 3, § 14, 15, is proof of the fact that by the common law the judgment of the court related back to the first day of the term; and the judgments of the courts, both before and since, shew that this common law principle was without question, and was not even altered by the statute, '.xcept for the protection of purchasers. See Odes v. Woodward, 2 Ld. Raym. 849; 2 Bac. Abr. 731; Bragner v. Langmead, 7 T. R. 20.
But admitting that the judgment relates back to the first da}' of the term, I cannot persuade myself that we ought to consider the term as commencing on the day appointed by law for its commencement, although in point of fact the court was not held until the third day afterwards. There is no analogy between such a case, and the essoin days of the term in the english courts; and the extension of the fiction of relation,- to embrace a period when the court was to no intent whatever in session, would be unreasonable and without precedent. I should certainly be averse to any such extension, having in fact very great doubt of the wisdom of the fiction at best; and as there is no precedent to bind me, I shall not be the first to make one. I shall consider the judgment as relating back to the first day of the term, *and the first moment of that day; but I look upon the day on which the court commenced its session as being the first day of the term.
This brings us to consider the deed; for it was executed the day before the commencement of the court; and indeed it was acknowledged by Cunningham, and delivered to the clerk to be recorded, before the term began. It was not therefore overreached by the judgment. It has, however, been assailed on various grounds; all of which it will be proper to examine.
First it is alleged that it was executed with intent to delay, hinder and defraud the plaintiff and other creditors, and so was void under the act for prevention of fraudulent conveyances. I see no evidence of this whatever. A merchant in failing circumstances may, it is admitted, prefer one class of creditors to another, and in doing so he must, in a degree, impede, hinder and even injure other creditors. But the case is not within the statute, which, having excepted conveyances made bona fide and upon valuable consideration, has always been held to permit this preference. The illegality of such an arrangement 'is too well settled to be now called in question. Hendricks v. Robinson, 2 Johns. Ch. Rep. 283, 306; Hopkins v. Grey, 7 Mod. 139; Estwick v. Caillaud, 5 T. R. 420; Nunn v. Wilsmore, 8 T. R. 521; Meux v. Howell, 4 East 1; M'Menomy v. Murray, 3 Johns. Ch. Rep. 435; M'Menomy v. Roosevelt, Id. 446; Williams v. Brown, 4 Id. 682; Brashear v. West &c., 7 Peters 614. In this last case chief justice Marshall said, "Such preference, though liable to abuse and to serious objections, is the exercise of a power resulting from the ownership of property, which the law has not yet restrained. It cannot be treated as a fraud."*
Next it is alleged that the deed is of no binding validity, because it was not assented to by those for whose benefit it was executed, before the lien of the judgment attached; that it was therefore to be considered as a voluntary deed, and, as such, void as to the plaintiff and the other creditors of the grantor. My impressions are otherwise.
Blackstone, following the footsteps of those who went before him, enumerates the various requisites to a valid deed, and among them he places delivery. It is observable, however, that acceptance is not enumerated as one of the essentials. Delivery indeed to the grantee himself implies acceptance by him; but as such delivery is not always to him in person, the necessity of immediate acceptance is not implied in the necessity of a delivery. Delivery is indeed absolutely necessary' to a deed. It is the final act, the formal declaration of the grantor's determination to complete the conveyance or enter into the contract. See Sharrington v. Shotton, Plowd. 308. 1 'First there is a determination of the mind when a man designs to pass a thing by deed, and upon that the party causes it to be written, which is one part of deliberation ; sealing is another, and delivery is the consummation of his resolution." There is no particular form essential to constitute a good delivery, but any act, I conceive, which conveys the evidence of this consummation of the grantor's resolution will suffice. On principle, then, it would seem a solecism to say that this last act or consummation of the grantor's resolution should depend upon the act of another person, — the grantee. That act indeed cannot compel the grantee to take against his will, but it is, as to the grantor, a complete and consummate act before that will is declared, although it may be avoided by the dissent of the grantee. No man indeed can be forced to take an estate against his will; but the law on the other hand presumes that every estate, given by will or otherwise, is beneficial to the party to whom it is given, until he renounces it. Townson v. Tickell, 3 Barn. & Ald. 31; Wilt v. Franklin, 1 Binney 502, 518. And hence the assent of the grantee is implied in all conveyances; first, because of the supposed benefit; secondly, because it is incongruous and absurd that when a conveyance is completely executed on the grantor's part, the estate should continue in him; thirdly, to prevent the uncertainty of the freehold. 4 Cruise's Dig. 11. In Thompson v. Leach, 2 Vent. 198, three of the judges held that an estate did not pass by surrender, till the surren-deree accepted it. Ventris differed, and held that it passed immediately, liable to be divested by dissent; and his opinion was followed by the house of lords. Accordingly, while, on the one hand, acceptance is not essential to give validity to a deed, on the other, dissent is one of the modes of avoiding it, laid down in the books. 2 Black. Com. 309; 4 Cruise's Dig. 494. Now this implies its validity and effect, until avoided by dissent; and hence it is laid down that deeds, immediately upon the execution by the grantors, divest the estate out of them, and put it in the party to whom the conveyance is made, though in his absence and without his notice, till some disagreement to such estate appears. 4 Cruise's Dig. 11. Of this, indeed, we have many familiar instances. If an estate be conveyed, either by common law or statutory assurance, to A. for life, remainder to B. in fee, the remainder passes at once to B. and upon A.'s death the franktenement will be adjudged in him until he disagrees or disclaims; and by waiving thereof it vests in the donor or his heir. In like manner a devise vests the title in the dev-isee until disagreement, and then tne dissent has the effect of defeating the devise by relation to the testator's death. 3 Barn. & Aid. 31. So if an obligation be delivered by A. to C. for the use of B. it is the deed of A. immediately; but B. may refuse, and thereby the bond will, lose its force. Dyer 49, a. ; 3 Co. Rep. 26, b. cited 1 Salk. 301. And yet it seems the obligor cannot plead non est factum (Tawe's case, Dyer 167, b.; Butler v. Baker, 3 Co. Rep. 26, b.) which clearly shews that the bond was his deed and only avoided by the refusal. So if a deed of gift of goods and chattels be delivered to the use of the donee, the goods and chattels are in him presently, without notice or agreement; but the donee may make refusal in pais, and by that the property and interest will be divested. 3 Co. Rep. 26, b.
These principles, we see, are drawn from the very fountains of the law. They have been recently recognized and very fully stated in a case in the king's bench, which goes the whole length on this subject. Doe e. d. Garnons v. Knight, 5 Barn. & Cres. 671; 12 Eng. Com. Law Rep. 351. There it was decided that where a party to an instrument seals it, and declares in the presence of a witness that he delivers it as his deed, it is a valid and effectual deed though he keeps it in his own possession, there being nothing in the transaction, except the act of retention, to shew that the grantor did not intend it to operate immediately ; and delivery to the party who is to take by the deed, or to any person for his use, is not essential. It is also decided in the same case, that delivery to a third person for the grantee's use makes the deed effectual from the instant of delivery, although such person be not the agent of the grantee.
These positions appear to me to be peculiarly applicable to deeds which have their effect from the statute of uses. For if the grantor seals, acknowledges and delivers (though not to the grantee personally, or to his agent) a deed setting forth a bargain and sale for valuable consideration, that consideration instantly raises a use, and the statute as instantly executes the possession to that use, and vests the estate in the bargainee, with or without his assent, leaving to him, indeed, the capacity to avoid it as his pleasure by renouncing it, either by reason of the consideration being fictitious, or the *duties it imposes onerous and full of danger, as in the case of a deed of trust. Such too I take to be the received and constant practice of the country. Thousands of deeds have been executed by debtors for security of their creditors, and have been carried into effect, without being executed by the trustee. Innumerable deeds of conveyance in the form of indenture have been made, and are now on record in our courts, which have never been signed by the grantees, their acceptance being evinced only by taking possession and other acts in pais. There is no instance in which our courts have decided such deeds to be incomplete and ineffectual, for such a decision would shake every title in the commonwealth. Still less has it ever been deemed necessary that a deed of trust should be executed by the cestui que trust, in order to give validity to its provisions. The instant the legal title becomes vested in the trustee, a trust ai'ises in behalf of those in whose favour it is declared, provided there be a sufficient consideration to sustain it; and from that moment it is beyond the power of the grantor. He cannot revoke it, nor can he even extinguish it by getting a re-conveyance ; for no act of the trustee can affect the rights of the cestui que trust. If indeed one cestui que trust renounces the trust, then it either enures solely to the benefit of the rest, or, if there be no others, it results to the grantor. But until the renunciation is made, or implied from circumstances to be made, the trust continues. It arises without any act on the part of the cestui que trust, and in many instances he knows nothing of it until a period remote from the date of its creation. Years indeed may intervene (as in the case of shifting and contingent limitations by way of trust) before it is ascertained who is to be the cestui que trust. Who is to execute the deed in such a case? What would become of trusts in behalf of foreign debtors, or infant wards, or femes covert, or infants yet unborn, if trusts were revocable at any time before ^actual acceptance by the cestui que trust? They would be futile and nugatory. We must therefore hold that the execution of the deed by the cestui que trust is not necessary. We must hold that the deed is good and available on the instant of its execution, and that it can only be avoided by the dissent, express or implied, of the ces-tui que trust. -In what manner that dissent may be declared, or how implied, it is not necessary here to say; though I presume nothing more would be requisite than simple evidence of the fact of disclaimer.
If we apply another test to this question, it would seem equally decisive. The trustee is invested with the legal title. That'title is a barrier to the execution upon the judgment at law. The creditor cannot sue out his elegit with effect: " he is driven to equity for relief. He has then but an equity. But the creditor for whose benefit the trust is created has an equitjr also, and it is prior to that of the judgment creditor. He therefore has a preferable right to demand that the legal title shall be made available for his relief. Eor a court of equity would never permit the debtor to retract the declaration of trust in favour of his creditor, until it was renounced by the creditor himself; nor would it refuse to compel the execution of the trust in his favour, whenever he should choose to assert his rights. He must therefore have an equity; an equity arising out of and coeval with the deed, and therefore prior to the subsequently acquired judgment of his adversary.
The American authorities upon this subject are somewhat variant, but the great majority of them concur in principles fatal to the pretensions of the appellant. Some hold, that where a deed is beneficial to the grantee, his assent will be presumed until the contrary appears. 2 Conn. Rep. 633; North v. Turner, 9 Serg. & Rawle 244; Grey v. Hill, 10 Id. 436; Smith v. The Bank of Washington, 5 Id. 318; Wilt v. Franklin, 1 Binney 502. Some declare that the subsequent assent of *the grantee renders the deed good by relation. 7 Peters 609; 2 Gallison 557. And this would seem conformable with the doctrine as to an" escrow, where the second delivery relates back to the first and avoids all mesne acts. It seems to have very generally prevailed in relation to assignments for the benefit of creditors, whose subsequent assent has been deemed sufficient to give effect to the deed ab initio. 9 Mass. Rep. 307; 13 Johns. Rep. 285; Marbury v. Brooks, 7 Wheat. 556; Brooks v. Marbury, 11 Wheat. 78; Nicoll v. Mumford, 4 Johns. Ch. Rep. 529.
The learned counsel however has cited some cases from the decisions in Westminster hall, which seem contra, and must therefore be examined. The first of them, and that which has served as the authority for the others, is that of Walwyn v. Coutts, which is briefly stated in 3 Merivale 707, and is to be found fully reported in 3 Simons 14; 5 Cond. Eng. Ch. Rep. 7. In that case the duke of Marlborough conveyed his estates to trustees, for the purpose o'f paying off the debts of his son the marquis of Bland-ford, and certain annuities granted by the son, but no debts of his own. The annuitants were no parties to the deed; and the duke and his son afterwards joined in executing other deeds varying the former trusts. The motion was on the part of the annuitants, for an injunction to the proceeding under the subsequent deeds. It was refused; but the reasons of the court are not given. Certain it is that much difficulty exists in reconciling this case with those of Ellison v. Ellison, 6 Ves. 656, and Pulvertoft v. Pulvertoft, 18 Ves. 84. In the first of these cases lord chancellor Eldon said that even if the parties had been pure volunteers, and not a wife and children, they might have filed their bill on the ground of their interest in the instrument in question, making the trustees and the grantor parties. He took the distinction to be, "that if you want the assistance of the court to constitute you a cestui que trust, *and the instrument is voluntary, you shall have no aid; as upon a covenant to transfer stock, if it rests in covenant, and is purely voluntary, the court will not execute that voluntary covenant: but if the party has completely transferred the stock, though it is voluntary, yet the legal conveyance being effectually made, the equitable interest -will be enforced by the court. The actual transfer constitutes the relation between trustee and cestui que trust, though voluntary and without good or meritorious consideration; and the court would execute it against the trustee and author of the trust." The case of Pulvertoft v. Pulvertoft, 18 Ves. 84, 98, proceeds upon a concessum of the same principles. Now I cannot perceive how the case of Walwyn v. Coutts can be reconciled with these cases: for in that case there was a trust created which, upon the principle of the other cases, could not be retracted or defeated, except by a sale to a purchaser for valuable consideration; which, according to the english decisions, avoids a previous voluntary conveyance. In Garrard v. Lord Lauderdale indeed (3 Simons 1; 5 Cond. Eng. Ch. Rep. 1), the vice chancellor attempts to reconcile them, but to my mind not satisfactoria. We shall presently see in what manner he does it. At present it may be remarked that the order in Walwyn v. Coutts seems to have been made without having been much considered, or the reasons of lord Eldon would have appeared in the report of the case. Whether he reviewed the cases of Ellison v. Ellison and Pulvertoft v. Pulvertoft. does not appear.
This case of Walwyn v. Coutts, however, is the foundation on which the other cases rest. The first of them is Garrard v. Lord Lauderdale, 3 Simons 1. There it was decided, upon the authority of Walwyn v. Coutts, that a conveyance by a debtor to trustees for payment of scheduled creditors, who do not execute the deed or conform to its terms, cannot be enforced by the creditors. Now Walwyn v. Coutts decides no such principle. The *'grantor in that case (the duke of Marlborough) did not make the conveyance for the payment of his own debts, but to pay the debts of his son. It was therefore strictly a voluntary conveyance on his part, in behalf of his son and his son's creditors, from whom no consideration moved to him. Admitting therefore his power to revoke that voluntary conveyance, shall it be inferred that he would have had the power of revocation, if the deed had been in favour of his own creditors for the payment of his own debts, and therefore founded on a most meritorious and valuable consideration? It would seem not; for on the first supposition, he was only resuming what he had imperfectly given ; whereas, on the second, he was at-, tempting to resume what he had in fact paid away to bona fide creditors. The decision of lord Eldon does not therefore, in this view, justify that of vice chancellor Shadwell. But the vice chancellor seems to think that the marquis of Blandford was, in the second deed, dealing with his own property, and had a right to pay his own creditors as he thought proper. This appears to me. first, to be a mistake of the fact; for the trustees, after paying the debts, were to stand seized to the use of the father for life, with only a remainder to the son in fee. But suppose the whole estate in him, subject to the trusts; what power could he have over trusts created not by himself but by another, and not out of his own property but the property of that other? Taking as he did under that deed, he must have taken subject to its provisions and to the trusts which it declared. He could have no right to revoke those trusts, whatever might be the rights of his father. Revocation can never be predicated of one who did not himself make the grant. Lord Eldon, then, could have proceeded on no such solecism, but must have acted on the supposed power of revocation iti the father, because the trust being voluntary he might vary it as he pleased. This, however inconsistent with Ellison v. Ellison, is at *least intelligible; while, on the other hand, it is not comprehensible upon what principle the son could revoke a deed made by the father for the benefit of the son's creditors.
The next case is that of Acton v. Woodgate, 2 Mylne & Keene 492; 8 Cond. Eng. Ch. Rep. 97, which was decided upon the authority of Walwyn v. Coutts, and Garrard v. Lord Lauderdale; and if they are overthrown, it is without any just foundation.
The case of Page v. Broom, 4 Russ. 6, is the last to be considered. It is stated in the abstract of the case that where a debtor, by deed poll, directs (inter alia) the receiver of the rents of his estate to keep down the interest of a debt, the direction does not create a trust in favour of the creditor, if it be without consideration and without the privity of the creditor. Upon looking into the case, I can find nothing to justify this report of its principles. It is exceedingly complicated in its facts, and docs not seem to me to be very clearly stated. Erom what appears, I should take it that the deed poll was not held inefficient at all. Nothing is said of its being without consideration or privity of the creditor; but because it was inferiour to the lien of another creditor's mortgage, it was postponed to that lien. Admitting however that the case was decided according to the abstract, yet it can have no influence upon this case. The estate being already in trustees, and the legal title out of the grantor, the deed poll may have been considered in the light of a power of attorney revocable at the will of the maker, or of an order upon a particular fund not passed into the hands of the drawee, and therefore not operating an equitable assignment of the fund. The deed appears to have been a mere direction to the trustees to apply the surplus to that particular debt. It did not pass the legal title, for that was already in the trustees. Nor did it pass an equitable interest, for there was no decisive ^evidence upon its face of its intending to do so. It was, at most, equivocal. It might have been designed either as matter of contract, in which case there would, upon the principles I have advanced, have been an irrevocable trust; or it might have been intended as a mere arrangement of the maker's funds, and of course subject to be changed at pleasure. Which was it? Its features strongly indicated the latter. Ror the instrument was a deed poll for the direction of the trustees, to which the creditor was not party or even privy, and in its form it was a mere direction to the receivers to pay surpluses towards the discharge of the particular debt, instead of being an authority to the creditor to demand them. Such an instrument may well have been regarded as no contract with the creditor, but a mere direction to the trustees. In this view of the subject, it is clear that the case of Page v. Broom does not decide our case. Ror here there was an express trust in behalf of the creditors.
Upon the whole, therefore, I am of opinion that the trust deed in this case (unless it was fraudulent in fact or in law) was valid; that it passed the legal title to the trustees, thereby intercepting the. lien of the judgment; that the judgment lien thus became a mere equity, and that it was subsequent and therefore inferí our to the equity of the creditors, which attached upon the execution of the deed. Bet us next enquire whether there was any thing fraudulent in the deed itself.
I have already said, lean see no evidence of actual fraud in this case. Is there 'any thing in the deed which renders it fraudulent in contemplation of law?
The first objection is to the preference of creditors; which has been already examined and overruled,
Next it is said that the deed was a fraud upon the.creditors generally, because it demanded a general release of the whole debt of each creditor, upon payment of a part. On this subject a distinction has been made *in the cases, between the conveyance of the whole, and the conveyance of part only of the debtor's property, upon condition that the creditors should compound, and accept a part of their debts, and give a release for the residue. The former is considered admissible and valid, the latter as oppressive upon the creditors, and as fraudulent and pernicious in its tendencies. Seaving v. Brinkerhoff, 5 Johns. Ch. Rep. 332. The english cases are all founded upon the concessum of the principle that such compositions are lawful, where the party has conveyed the whole of his propert}', and there is no concealment or underhand agreement with particular creditors. Cockshott v. Bennett, 2 T. R. 763; Jackson v. Lomas, 4 T. R. 166. Such compositions are in the spirit of the bankrupt laws, and cannot therefore be branded with the imputation of fraud. "Humanity and policy,'' says the chief justice of the United States, "plead so strongly in favour of leaving the product of his future labour to the debtor who has surrendered all his property, that in every commercial country known to us, except our own, the principle is established by law." (He means that the principle is established by statute law, and compulsory.) "This furnishes a very imposing argument against its being a fraud." Brashear v. West &c., 7 Peters 615. It is difficult indeed to imagine on what principle the right of composition, by the assent of the creditors, can be contested, if the right of preference be conceded. He who gives up his all, and who, in doing so, has a right to pay one in exclusion of others, cannot justly be charged with fraud, because he prefers those who-humanely surrender all claim to his future labours. To set aside such preference as fraudulent, is to deny the right to prefer, which on all hands is conceded. Accordingly such agreements,, if executed, are acknowledged to be valid and binding. Heathcote v. Crookshanks, 2 T. R. 24; Lynn v. Bruce, 2 H. Black. 317, But is not less true, that if they are of only part of *the debtor's property, the transaction is oppressive upon the creditors and fraudulent. A debtor is bound by duty to devote the whole of his property to the^ satisfaction of his creditors' demands. 7' Peters 614. He can have no right, while he is full handed, to extort from them a release of part of their just claims. "Such release is not voluntary on their part, and it is without any other consideration, than the apprehension that by noncompliance they may lose their whole demands. It is induced by the necessity arising from the certainty of being postponed to all those creditors who accept the terms by giving a release. It is not therefore voluntary." 7 Peters 615. It is a contrivance on the debtor's part to protect and secure a part of his property from his creditors, and is therefore distinctly in conflict with that statute which avoids every contract or conveyance of a debtor, contrived of purpose to hinder, delay or defraud his just creditors. He may protect his person indeed by a fair composition, and a surrender of all his property, but he cannot protect a part of that property by giving up another part. Such an attempt is fraudulent and void. 5 Johns. Ch. Rep. 332.
In this case, however, I think the deed essentially complies with the requirements of the law. The bill itself states that it conveyed the whole property of the debtor, and the character of the instrument confirms the statement. It is therefore unassailable on the ground just examined.
Next it is said that the deed is fraudulent because of the reservation, out of the trust fund, of the small sum of 350 dollars, for the purpose of paying some "small debts of high honorary obligation, not then liquidated or ascertained." This reservation, for so laudable a purpose, out of the avails of a very large and valuable estate, cannot, I tliink, be void in itself; but I feel assured that it cannot render the deed void as to the creditors who are secured by it. So too with respect to *the shares of those who should refuse the composition. It is provided indeed that the surplus, if any, after paying off those who accept the deed, shall be repaid to the grantor; but until all who accept are fully paid, he is to get nothing. In this respect the case differs, I think, from Hyslop v. Clarke, 14 Johns. Rep. 458, and Austin v. Bell, 20 Id. 442. Ror here the pro rata shares of those who come into the composition are to be increased, whereas in those cases it was otherwise. In the first, the refusal of any vacated the trust as to all; and in the last the shares or proportions of those refusing- were to be paid to the grantor himself, and were not to go to increase the dividend of those who should come into the composition; and this is a material ground of the court's opinion. See page 448. Such also was the case of Burd v. Smith, 4 Dall. 76. But be this as it may, I cannot agree that all the creditors are to lose the benefit of this security for the payment of their debts, because an improper provision, deemed fraudulent by construction of law, has been inserted in the deed. 1 am aware that a distinction has been taken and sustained in some cases, between a deed avoided by statute, and one which is only constructively fraudulent upon equitable principles. 14 Johns. Rep. 458; 20 M. 442. Bull think there is another distinction. Where a deed is made for the security of various creditors, whose claims are distinct and unmingled with each other, and where part are illegal and fraudulent, and another part are fair and untainted with fraud, the security shall not be avoided as to the latter, provided they have given no aid, in any way, to the concoction of the fraud. A deed of that character ought to be considered distributively, and while it is avoided in part, it should be effectuated as far as it is good. If it were otherwise, then a deed of trust to secure the payment of 99 just debts would be avoided by the fact that the hundredth was for usury or gaming; for the statute has "'declared all gambling or usurious securities to be void. This cannot be: and accordingly this court in the case of Kemper v. Kemper &c., 3 Rand. 8, decided that where the transaction is of such a nature that the good consideration can be separated from the bad, the court will separate them, and consider the deed valid so far as it is entirely distinct from and unaffected by the illegal consideration. So in Skipwith v. Strother &c., 3 Rand. 214, where part of a bond was for gaming: and so in Fleetwood v. Jansen, 2 Atk. 467, there cited, a mortgage, in part of money lost at play, was avoided as to that, but held as security for what was justly due. I am aware indeed that in Garland v. Rives the deed was avoided in tolo; but there a gross fraud was committed upon the creditor, and the case affords no precedent for the case at bar. But even in that case judge Green admits that a deed may be good as to part of the grantees, and void as to others. 4 Rand. 309. As where a deed is made to secure a just debt, and the equity of redemption is reserved to a stranger or to the family of the debtor; such a deed would be valid as to the creditor, but void, in respect to other creditors, as to the reservation of the equity of redemption. Ibid. So here, the deed is truly of no effect as to other creditors in so far as the surplus goes, but it is valid and available as a security to the creditors specified, and those assenting to the composition.
Next it is said that the creditors are delayed by this deed. This objection admits of a like answer with the last. But it may be added that a like objection was made and overruled in the case in the supreme court of the United States, already cited. 7 Peters 615. It was carefully considered by the court, who felt its force. But the-chief justice observed that "the property is not entirely locked up. A court of equity will compel the execution of the trust, and decree what may remain to those creditors. who have not acceded to the deed." *He then proceeds to examine the Pennsylvania decisions upon the-point, and though he obviously felt a difficulty, yet he followed them in affirming the validity of the deed. I am not aware of any material difference bet-ween the law of Pennsylvania and that of Virginia on this subject, and I therefore incline to think the cases are entitled to some respect. But I acknowledged that, independent of them, I cannot believe that a mortgage or deed of trust is void because the mortgagor or debtor, after providing for the payment of the debt, declares the residue to be for his own use. Such is the ordinary course of all transactions of that kind, and to impeach them would be to avoid every mortgage or security given by an embarrassed debtor.
I have now waded through all the questions in the case, save one; and in that only do I find error. I think it very clear that the appellant had a right to an account of the trust fund, and to the payment of his debt out of the surplus, if any, after satisfying the scheduled creditors and those who acceded to the composition. I am of opinion, therefore, to reverse the decree, and send the cause back for an account and further proceedings.
Decree reversed, and cause remanded for further proceedings.
Note by the president. A case to the same effect M'Cullough v. Sommerville. reported post.l was decided in the court of appeals at Lewisburgt in July 1836.