Case Name: Gwathmeys v. Ragland
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1823-06-02
Citations: 1 Rand. 466
Docket Number: 
Parties: *Gwathmeys v. Ragland.
Judges: 
Reporter: Virginia Reports
Volume: 22
Pages: 182–183

Head Matter:
*Gwathmeys v. Ragland.
June, 1823.
Deeds of Trust — Assignment of Notes Secured Thereby —Priorities. —A debtor executes several notes to-bis creditor, and gives a deed of trust to secure their payment. The first note is duly paid. The creditor assigns the second note to a third person, without assigning the deed of trust. The third note is assigned to another person, together with the deed of trust. The assignee of the second note is entitled to the first satisfaction out of the trust fund.
A deed of trust was executed by William and Francis Sutton to trustees, to secure the payment of three notes to a certain Anderson Barrett. The first not’e was paid; the second transferred by endorsement to Nathaniel Ragland, without any .assignment to him, of the deed of trust; the third note was endorsed to Robert and Temple Gwathmey, who took an assignment of the deed of trust, for their security.
The trustees having advertised the land for sale, to satisfy Ragland’s claim, Robert and Temple Gwathmey filed a bill, in the superior court of chancery of Richmond, against Ragland and the trustees, to injoin them from selling the trust property, to satisfy Ragland’s claim; alleging, that, as they had taken an assignment of the deed of trust, and Ragland had not, they were entitled to a preference over him, in satisfaction of their claim out of the trust property.
The injunction was granted.
Ragland answered, that he was induced to take an assignment of the note in question, by the equitable right which he acquired thereby, to the deed of trust; without which lie would not have taken the said note.
On motion of Ragland, the injunction was dissolved; from which order the plaintiffs obtained an appeal, from a judge of the court of appeals.
*Wickham and Leigh, for the appellants.
W. Hay, junr., for the appellee.
Deeds of Trust — Assignment of Notes Secured Thereby — Priorities.—Where there are several notes secured by a deed of trust, and there are successive assignments of the notes, the first note assigned carries with it the assignment of so much of the lien as is necessary to pay it; unless it is expressly provided otherwise. McClintic v. Wise. 25 Gratt. 449. In this case, the bond that matured first was retained by the assignor and he insisted that, by the terms of the contract, he should be paid first, and therefore he should have precedence of satisfaction out of the fund provided as security for the debt. In support of this pretension, the principal case was cited. Judge Staples, who delivered the opinion of the court, after stating the facts and decision in the principal case, said that he did not understand the court in that case as deciding that the maturity of the notes gave priority but that the first assignee had, by the act of assignment, acquired rights which could not be defeated by any act of the assignor; and that one of these rights was to subject the proceeds of sale of the land to the satisfaction of his debt in themanner directed by thedeed; and that the first assignee being the holder of the note first due had the preference, as well by priority of assignment as by the express directions of the deed.
See principal case also cited and quoted from in Tingle v. Fisher, 20 W. Va. 508. See further, mono-graphic note on “Deeds of Trust" appended to Cadwallader v. Mason, Wythe 188.
Same — Same—Effect,—To the point that the assignment of^a secured debt carries with it the security by operation of law as an incident, the principal case is cited in Tingle v. Fisher, 20 W. Va. 506; footnote to McClintic v. Wise, 25 Gratt. 449; Schofield v. Cox, 8 Gratt. 536; James v. Burbridge, 33 W. Va. 276, 10 S. E. Rep. 397.
See further, monographic note on “Deeds of Trust’" appended to Cadwallader v. Mason, Wythe 88.

Opinion:
JUDGE BROOKE,
June 2. — delivered the opinion of the court:
The court is of opinion, that the deed of trust from the Sultons, being intended by the parties to it, as additional security for the payment of the note to Barrett or his assigns, in the order in which they fell due, it followed the notes into the hands of the several holders thereof; and that it was not competent to Barrett, by an assignment of the deed to the appellants, (without the assent of the appellee, to whom the second note had been assigned) to deprive him of his priority of right, to demand a sale of the trust property in the deed, if necessary to the payment of the note so assigned, in the order of payment expressly directed by the deed. No misrepresentation or fraud being imputed to the appellee by the bill, he stands on as equitable ground as the appellant; with this difference, that by 'the directions of the deed, as assignee of the second note, he has priority of right to be paid out of the trust fund. The deed being assigned to the appellants, gave them full notice of the order, in which the notes were to be paid to Barrett or his assigns, and at least put them on the enquiry, whether the first and second notes had been paid at the time they took the assignment of the third note, and of the deed of trust. By not making that inquiry, if they relied on the trust fund as security for the payment of the note assigned to1 them, they may have lost their money. However that may be, as against the appellee, to whom no negligence or fraud is imputable, the court is of opinion that he has no claim to be preferred. The decree is therefore affirmed.