Case Name: Wroten's Ass'nee v. Armat & als.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1879-01
Citations: 31 Gratt. 228
Docket Number: 
Parties: *Wroten’s Ass’nee v. Armat & als.
Judges: 
Reporter: Virginia Reports
Volume: 72
Pages: 395–406

Head Matter:
*Wroten’s Ass’nee v. Armat & als.
January Term, 1879,
Richmond.
The Exchange Hotel Company of Fredericksburg, in order to complete their building, which they had commenced before the war, in June, 1866, borrowed of the National Bank of Fredericksburg $10,000, to be secured by a deed of trust on the property, and by direction of the company the president and secretary of the company, by deed dated the 27th of June, 1866, and duly recorded, conveyed the property in trust to secure the money. The company then employed Wroten, a builder, to complete the building, and contracted to give him a deed of trust upon it, subject to the first lien, to secure any balance due him on its completion. The company, out of the money borrowed, paid Wroten $8,000, and when the work was completed there was due him $5,791.50. He had recorded the contract to secure the mechanics’ lien, and on the 1st of January, 1867, the company conveyed the property, subject to the lien of the first deed, in trust to secure the said balance. In April, 1870, judgment creditors of the hotel company whose debts were due before the first deed was made, filed their bill against the company, the bank, and Wroten, claiming that under the statute the deed to secure the "bank enured to the benefit of all the creditors of the company being such at the time of its execution. And so the court held, and the property being sold under the decree, the proceeds were distributed pro rata among the plaintiffs and the bank. After-wards the assignee in bankruptcy of Wroten filed a bill to review the decrees, and insisted that the deed to seeure the bank was null and void on the ground that under the act of Congress under which the bank was organized it was forbid to lend money on real estate, and also on the ground that as against Wroten’s mechanics’ lien the trust in favor of the bank extended only to the property in the condition it was when the deed was executed —Heed:
1. Statutes — Construction.—The act of Congress of the 3d of June, 1864, Revised Statutes of the United States, §§ 5136-5137, under which This bank was organized, does not imply a negation of the corporate power on the part of the national banks which might be organized under it to make a loan of money on real estate; does not annul any loan made by any such bank; or release or discharge any deed of trust or mortgage on real estate taken by the bank to secure the payment of such loan.
2. Same — Same—Prohibition Clauses. — If the act of Congress plainly prohibited a bank organized under it to take a deed of trust or mortgage to secure a loan in any case, or make it penal to do so, such a provision could only have been intended for the benefit of the government, which might or might not, at its pleasure, enforce the forfeiture; and it could not be avoided by the borrower or his creditors.
3. Same — -Contracts in Contravention of —-Estoppel. —-Wroten having contracted to complete the building with a full knowledge of the means which had been used to raise the money to pay for the work, and having received 88,000 of said money, is equitably estopped from claiming against the deed of trust executed to secure the return of the money loaned.
4. Liens — Priority. —The contract between Wroten and the hotel company having been made and recorded after the deed to secure the loan to the bank, his mechanics’ lien was posterior and subordinate to the lien of the bank under the deed to secure it, and was in fact merged in the lien by deed of trust afterwards taken by him to secure the same debt, in which the prior lien of the bank was expressly recognized.
5. Same — Extent*—The lien of the hank under its deed of trust extended to the whole property as it was at the time of the sale, and was not confined, as against the mechanics’ lien, to the property as it was when the deed was made.
6. Appeal — Review—Time to Objeet. — An objection that the deed of tlie 27th of June, 1866, did not have affixed thereto the seal of the hotel company, nor was said hotel company by name a party to it, never made in any of the pleadings or proceedings in the cause, and only in the petition for an appeal, comes too late, and will not be considered.
This is an appeal from a decree of the circuit court of Spottsylvania county, rendered on the 30th of December, *J874, dismissing a bill of review filed by the appellant, A. B. Botts, assignee in bankruptcy of George W.Wroten, to two decrees of said court, rendered in the case of Armat and others v. The Exchange Hotel Company and others, which was pending in the said court.
On the 2d day of April, 1870, the said Armat and others filed their bill in the said court against the said Exchange Hotel Company and others, in which bill they stated in substance, among other things, that they were judgment creditors of the said hotel company, a joint stock company with its principal office in the corporation of Fredericksburg, and that the debts for which the said judgments were obtained were contracted by said company prior to the 1st of January, 1862, and were due and owing at that time (copies of which said judgments were filed as a part of the bill) ; that upon some of said judgments executions had been issued, but no personalty had been found out of which they could be satisfied, so that no recourse was left to secure the payment of the same but a resort to a court of equity to enforce the liens of the said judgments on the real estate of the said hotel company in the town of Fredericksburg, the said liens having been regularly docketed according to law; said real estate being described in the plat of said town as lot No. 39. That the said hotel company contrived and combined with the National Bank of Fredericksburg to give it a preference over its other creditors, to-wit:. the plaintiffs, and in fulfillment of the intent and purpose to give preference to the said National Bank of Fred-ericksburg, did on the 27th day of June, 1866, execute to Charles Herndon and A. K. Phillips, as trustees, a certain deed of trust (marked F and filed with the bill), whereby the said bank was sought to be preferred and secured to the extent of $10,000 to the injury of *the plaintiffs, who charged that the said bank ought not have such preference, nor indeed any preference at all, but that the said deed ought to be so construed in a court of equity as to enure to the benefit ratably of the plaintiffs as creditors of the said company. That the said hotel company again on the 1st of January, 1867, executed another deed of trust to Charles Hern-don, trustee, to secure to the said George. W. Wroten debts or a debt of that date amounting to $7,528.95, both of which deeds were duly recorded, and if executed as written, would create a preference as against the debts secured by the judgment liens of the plaintiffs, and so defeat their just rights in the premises, (a copy of the last mentioned deed, marked F is filed with the bill). That the aggregate of the rents and profits of the said real estate will not in five years satisfy the said judgments. And the plaintiffs prayed in substance, among other things, that the said Exchange Hotel Company of Fredericksburg, a corporation organized under the laws of Virginia, and the National Bank of Fredericksburg, a corporation organized under the laws of the United States, and George W. Wroten in his own right, and Charles Herndon and A. K. Phillips as joint trustees, and Charles Herndon as the sole trustee, might be made defendants to the said bill; that certain accounts might be taken by a commissioner of the court; that the deed first herein referred to, in which said Herndon and Phillips were trustees, might be so construed and executed as to give no preference to the said National Bank over the said plaintiffs, who were creditors of the said Exchange Hotel Company existing at the time said lien or incumbrance was created, b.ut that the same should be made to enure to the benefit ratably of the said plaintiffs and any and all creditors of the said company existing at the time such lien or incumbrance was *sought to be created; that the said trustees might be restrained from executing the said trust; that the court would take charge of the trust property and dispose of the same, and that the plaintiffs might have general relief.
Exhibits A, B, C, and D filed with the bill were copies of the plaintiff’s judgments, respectively, against the Exchange Hotel Company, obtained' in 1866-7-8.
Exhibit E therewith filed is the deed of trust therein mentioned, dated the 27th day of June, 1866, between William T. Hart, president, and Robert W. Adams, secretary and treasurer of the Exchange Hotel Company of Fredericksburg, of the one part, and Alexander K. Phillips, and Charles Herndon of the other part, which deed was executed by the said parties of the first part, acknowledged by and certified as to them and duly recorded in the clerk’s office of the corporation court of Fredericksburg on the 28th of June, 1866. It recites “that whereas the stockholders of the said Exchange Hotel Company, in a general meeting held on the 17th of July, 1865, authorized and empowered the president and directors of the company to negotiate a loan for the purpose of completing the building now on their lots in Freder-icksburg,. and at the same time authorized said president and ¡Erectors to cause a lien or mortgage to be executed on all their property to secure any such loan; and whereas a loan for $10,000 has been negotiated at twelve months time, and the president and directors of said company did, on the 26th day of June, 1866, at a meeting held by them direct the president and secretary to execute a negotiable note for the amount of said loan at twelve months, and also to execute a deed of trust on all the property of said company to secure said note so given for said loan” — The deed, therefore, “witne'sseth *that the said William T. Hart, as president, and the said Robert W. Adams, as secretary of said company, do on behalf of said Exchange Hotel Company grant and convey unto the said Phillips and Herndon all the real estate belonging to the said company, situated in the town of Fredericksburg, that is to say,” &c., describing the said property — “In trust to secure the payment of a negotiable note executed this day by William T. Hart, president of the Exchange Hotel company, endorsed by Robert W. Adams, secretary of said company, payable and negotiable twelve months after date at the National Bank of Fredericksburg for the sum of $10,000, or any note which may be hereafter given for the continuance or renewal of the said note of $10,000, in whole or in part. And should default be made by the said Exchange Hotel Company in the payment of the said note,” &c.; provision is then made in the deed for the sale of the trust subject for the satisfaction of the purposes of the trust. Then follows the concluding , sentence of the deed, “witness the following signatures and seals,” and then said signatures and seals.
“Wm. T. Hart, President, [Seal.]
R. W. Adams, Secretary, [Seal.]”
Exhibit F, .filed with the bill, is the deed of trust therein mentioned, dated the 1st day of January, 1867, between the Exchange Hotel Company of the town of Fredericks-burg, of the one part, and Charles Herndon of the other part, which deed was executed by the said parties of the first part, acknowledged by them and duly recorded in th'e clerk’s office of the said corporation court the 23d of January, 1867. It recites "that whereas the stockholders of the said Exchange Hotel Company, in a general meeting held on the 1st *day of August, 1866, authorized and empowered the president and directors of the company to contract with a competent workman for the completion of the buildings of said company, so as to make the same a first-class hotel, and to carry out this object the president and directors were empowered to execute a deed of trust on the property of the company to secure to the said contractor any balance that might be due him after the said company should have paid him the money which said company had in hand upon the completion of said work; and whereas the said president and directors, acting in accordance with the instructions of said stockholders did, on the 4th day of August, 1866, enter into a contract with one George W. Wroten, a master-workman and contractor, to complete the hotel building in a proper manner, which he agreed to do on or before the 1st day of December, 1866, for which the said hotel company were to pay to the said contractor the sum of $12,379 as agreed on in said contract; and whereas it was afterwards found necessary to make another and further contract with said George W. Wroten for sundry other work on said hotel building, not embraced in said first contract, which other and further work was to cost the said hotel company an additional sum of $1,512.50; and whereas the said George W. Wroten has fully completed his part of the contract, and the said company are now justly indebted to him.in the sum of $5,791.50, which, according to. said contract, is payable in instalments with interest thereon at ten per cent, per annum; all of which will more fully appear by the following statement which has been duly examined by the president and secretary of said company and found to be correct, viz:” Here follows the statement, after which it is further recited in the deed: “And whereas the said hotel company has this day executed *its notes to the said George W. Wroten for the balance due him under said contracts, payable one, two, three, four and five years from this date, and in accordance with said contracts said hotel company is to secure said notes.” Then the deed thus proceeds: “Now this deed wit-nesseth that the said Exchange Hotel Company, by its president and secretary, for and in consideration of the premises, doth grant with general warranty unto the said Charles Herndon all the real estate belonging to the said company, which said real estate is subject to a lien heretofore executed by said company to A. K. Phillips and Charles Herndon on the 27th day of June, 1866, situated in the town of Eredericksburg, that is to say,” &c.. describing the said property, “in trust to secure the payment of five several notes, executed this day by the Exchange Hotel Company, payable respectively at one, two, three, four and five years after date, to George W. Wroten or his order, payable and negotiable at the National Bank of Eredericksburg,” &c., “or any note or notes which may be hereafter given for the continuance or renewal of the said notes in whole or in part, and should default be made by. the said hotel company in the payment of any of said notes six months after the same may be due,” &c. Provision is then made for the sale of the trust subject and the disposition of the proceeds of sale in the manner prescribed by the deed. Then follows the concluding sentence of the deed and the signatures and seals thereto, as follows:
“In witness whereof, William T. Hart, the president of said hotel company, and R. W. Adams, the secretary thereof, have hereunto affixed their signatures and the seal of the company.
“Wm. T. Hart,
President Exchange Hotel Company, [Seal.] R. W. Adams,
Secretary Exchange Hotel Company,
[Seal.]”
*On the 1st day of June, 1870, the defendants, G. W. Wroten, A. K. Phillips, the National Bank of Eredericks-burg, and the Exchange Hotel Company filed their answers, by leave of the court before granted them.
In the said Wroten’s answer he states in substance, among other things, that the said judgments in favor of the plaintiffs were docketed about the 13th of March, 1868. “But he states that he is a mechanic by trade, and that under an order of said hotel company he was duly employed as such by a contract in writing, duly executed on the 4th day of August, 1866, and 2d October, 1866, to repair and rebuild said hotel, which had not been completed ante bellum; and the said hotel being situated in the town of Eredericksburg said contract, when placed upon record, became entitled to all the protection of the laws of Virginia in regard to the liens of mechanics, (see Code of Virginia, p. 568), and was thus a lien upon all the said hotel and land upon which it was erected, from said date until six months after maturity of the notes executed in payment of said contract, which event has not yet happened. So that your respondent’s lien upon said property for said balances, some $5,791.50, with interest accrued, is clear under his said recorded contract, from the 2d of October, 1866, when it was placed upon record (see Exhibit No. 1) and is prior in time and supreme in. equity to any and all the judgments of the said plaintiffs. Your respondent-further answering states that in pursuance of said contract, and as one of its provisions, the said hotel company was bound to execute the further security to your respondent, of a deed of trust on the said property to secure to him the deferred payments upon his said contract, the object being to save the necessity, in case of their failure to pay said amounts as they became *due, of a resort to a court of equity to enforce his said mechanics’ lien against said property, but to provide the easy and speedy method of enforcement by deed of trust for the same, and accordingly the deed of trust of the 1st of January, 1867, was executed for said purpose. You respondent believes' that the 8th sec. of ch. 65 of the Code of Virginia, p. 380, does forbid a hotel company to execute a deed to create preferences among its creditors, and that such deed may have to be construed in favor of all the creditors existing at the time. But if this be so there is a manifest equity enuring to your respondent’s claim in this that said lien of the- deed of 37th June, 1866, was a lien upon an unfinished, dilapidated and useless building, and should be confined to such security upon the ascertained value of said property on the 27th day of June, 1866, t.he date of said deed, while the work and labor and materials furnished by your respondent under his said contract for construction and repairs of this property evolved order out of this chaos,” &c.
Exhibit No. 1, filed with said answer, is a certificate of the clerk of the corporation court of Fredericksburg “that certain articles of agreement, bearing date on the 14th of August, 1866, between George W. Wroten, contractor of the first part, and the president, directors and company of the Exchange Hotel Company, of Fredericksburg, of the second part, together with certain specifications thereto annexed, were received in the office and admitted to record on the 3d day of October, 1866.”
In the said Phillips’ answer he declines to accept or execute the trusts confided to him, jointly, with Charles Herndon, by the said deed dated the 37th of June, 1866, and says that he has executed a deed releasing all interest under the said deed to the said C. Herndon, who is willing to execute the trust.
*In the answer of the National Bank of Fredericksburg, or the paper which was filed as such, it being contended by the counsel for the appellees that said paper was not in fact such answer, it was, among other things, in substance, said “that the Exchange Hotel Company is justly indebted to this respondent in the hm of $11,397.90 as of the 13th July, 1870. Said hotel company desiring to rebuild and finish its hotel property in Fredericksburg, then in a ruinous and dilapidated condition, borrowed of your respondent the sum of $10,000 for twelve months at 9 per centum per annum. Your respondent being advised by counsel that under the statute law of Virginia it wás legal and right for your respondent to lend to said company and for said company to borrow at that, rate, it was made a, condition of said loan that a deed of trust should be given on the hotel property to secure said amount, and that the amount so lent should be expended on the property in work and material. Neither this respondent nor any of its officers had knowledge that the Exchange Hotel Company owed one cent at the date of said loan, to-wit: on the 37th June, 1866. Even if the complainant’s debts were all due before the 37th June, 1866, it is submitted that the law in reference to a deed from a joint stock company only prevented a preference among creditors existing, and did not prevent the contracting of a new debt for the purpose of adding to the value of the property.” The manifest intention of the legislature was to prevent joint stock companies in failing circumstances from preferring one creditor or class of creditors to another. The subscription to the said answer is: “National Bank of Fredericksburg, by A. K. Phillips, President”; and it was sworn to by him. No seal was attached to the said answer.
In the answer of the Exchange Hotel Company they *say “that they had partially built in Fredericksburg, before the late war broke out, a large and commodious building as a hotel; that owing to the war they were obliged to abandon said property in a half finished state; that the building, so partially completed, was occupied alternately by the Confederate and Federal forces, and was used for some time by the Freedman’s Bureau as a receptacle for the colored people who flocked to town. After the termination of the war the property, thus in a ruinous condition, was scarc'ely of any value; it would not, in its then condition, bring enough yearly to pay insurance and taxes, and the character of the property was such that it was of no use as it stood to any one, and it required so large an outlay of money to put any value on it that no person was willing to have anything to do with it. In this dilemma the board of directors; after much inquiry, did the only thing that was feasible, to-wit: they endeavored to negotiate a loan in order to rebuild and repair the property, for no builder or contractor would agree to undertake the work unless a good part of the contract price was paid in money. Under these circumstances, and for the sole purpose of giving value to the property, the said company effected the loan of $10,000, to secure which the deed of trust of the 37th June, 1866, was executed. This loan was contracted by the authority of the stockholders of said company in general meeting; and after the loan was effected and the deed of trust given a general meeting of the stockholders of said company was called,” and ratified what had been done. “The parties lending the money refused to do so unless they were secured by first lien on the property; and respondent could get the necessary money from no one who did not demand and require such first lien. This money, so borrowed, was expended almost entirely on the property, thus enuring *to the benefit of all concerned. Most of said money was paid to contractor G. W. Wroten, but the cost of rebuilding and refitting said property, so as to make it what it was designed to be — a first-class hotel— was very large, and respondent had to give, and did give, the said deed in pursuance of their agreement to secure to said contractor the residue of his contract price. For a year or so after the completion of the building on said property respondent rented it out for a price that justified them in believing that they would be able to pay off all their indebtedness in a few years. They paid all taxes and insurance and the interest on the said $10,000, and they paid off entirely to the said G. W. Wroten the first of his debt secured in the said deed of trust, some $1,400, and they have also paid some $500 on the second debt of said G. W. Wroten, so secured as aforesaid, which said second debt is held by Messrs. Thomas & Son, of Baltimore, to whom it had been assigned by said G. W. Wroten.” The said answer was signed, but not sealed, by “W. R. Mason, Pres’t Exchange Hotel Co.,” and “R. W. Adams, Sect’y & Tres. Exchange Hotel Co.,” and sworn to by said Adams.
On the 9th day of May, 1870, shortly after the institution of the above-mentioned suit, another suit was instituted in the same court, beween the same parties, involving nearly the same subject of controversy, the style of which was “Armat v. Phillips & Herndon, trustees,” which was afterwards, to-wit on the 23d of July, 1870, ordered to be heard together with the before mentioned cause of “Armat v. Exchange Hotel Co.,” áte. It is unnecessary to state all the proceedings had in the said case of “Armat v. Phillips & Herndon, trustees,” before it was heard with the other case, though it may be proper to state some of them; at least the purport of some of the *evidence of Robert W. Adams, whose deposition was taken in the case. He was secretary and treasurer of the said Exchange Hotel Company when his deposition was taken, on the 15th of July, 1870, and had been for about four years previously, and was in the said office when the said hotel company negotiated a loan with the National Bank of Virginia for $10,000. The note was at twelve months, and the rate of interest was nine per cent. He was in office when the contract was made with Wroten for repairing the hotel. The deferred payments to him were to bear ten per cent, interest, which was included in the notes. When the repairs of the property were first completed it rented for $2,000 for the first year and $2,500 per annum for the next four years; but before the lease expired the tenant failed, and the property was afterwards rented for a much smaller sum. The contract with the said national bank for the said loan of $10,000 was ratified by a meeting of the stockholders of the said hotel company as of 1st August, 1866. Of the said loan the sum of $8.000 was paid to Wroten, the contractor, as the work progressed. The balance went towards paying taxes, insurance, and other incidental expenses of the company.
On the 23d of July, 1870, the matters in controversy in the said two causes being the same, it was ordered that they be heard together. Whereupon they accordingly came on to be heard together, when the court, without then deciding anything but what followed, decreed, among other things, that one of the commissioners of the court should ascertain and report what amount was originally borrowed from the National Bank of Fredericksburg by the Exchange Hotel Company, and how that amount wais expended, and the amount then due, of principal and interest, on said debt, specifying in the account the rate of interest received *by said bank; also, the time of the creation of the debts due the complainants, and a full statement of the amounts then due on all the debts of the Exchange Hotel Company, &c. And the court, among other things, further decreed that Charles Herndon should sell the property of the Exchange Hotel Company in the proceedings mentioned in the manner and on the terms mentioned in said decree, and report his proceedings to the court.
On the 11th day of October, 1870, Commissioner A. W, Wallace made his report, in pursuance of the last-mentioned decree, showing, among other things, that the amount originally borrowed from the National Bank of Fredericksburg by the Exchange Hotel Company was $10,000, and that the said amount was to bear interest at the rate of nine per cent, per annum; .that the first year’s interest was deducted by the bank at the time of the loan, so that the company received only $9,100. The commissioner returned with his report a statement, marked B, furnished by the secretary of the Exchange Hotel Company, showing how the amount borrowed from the bank was expended. Also, the deposition of G. W. Wroten, to the effect that $8,00® was all that was spent in repairing the hotel property.
On the 30th day of November, 1870, Charles Herndon, who had been decreed to sell the said property, as trustee, reported that he had offered it for sale at public auction, when it was cried out to George W. Wroten at $13,000 upon the terms mentioned in said decree, but that said Wroten had failed to comply with the terms of the sale, and the trustee did not, therefore, recommend a confirmation of the said sale.
The said Wroten also presented a petition to the court, insisting, for the reasons therein stated, that the said sale should be confirmed, and that he might be permitted to comply with the terms thereof upon its confirmation.
*On the 17th day of December, 1870, the said causes came on to be further heard on the papers formerly read, &c. On consideration whereof the court, being of opinion that the lien created by the deed of trust of the 27th June, 3866, upon the real property of the Exchange Hotel Company in the bill and proceedings mentioned, enured ratably to the benefit of all the creditors of said company existing at said date, and, therefore, that the complainants were entitled to participate ratably with the National Bank of Fredericksburg in the proceeds of the sale of the said real property; and the court being of opinion that the debt due by said company to G. W. Wroten must be postponed until the debts before mentioned are satisfied out of said trust subject; and the court being of opinion that the said decree of the 23d July, 1870, so far as it undertook then to order a sale to be made of said real estate, was inadvertently entered, declined to confirm the sale thereunder reported by the trustee, Charles Herndon; the court accordingly decreed that the said Herndon, who was thereby appointed a commissioner for that purpose, should sell the said real property at public auction in the manner and on the terms prescribed by the said decree.
On the 27th day of April, 3 871, Commissioner Herndon reported a sale made by him, in pursuance of the last-mentioned decree, to Jacob Eorne, as agent and trustee for the preferred creditors, he being the highest bidder at public auction, at the price of $10,000, and recommended a confirmation of the said sale.
On the 19th day of May, 1871, the court decreed a confirmation of the said sale and the application of the proceeds of sale according to the rights of the parties under the previous adjudications of the court in the said causes.
On the 11th day of November, 1871, the causes came on to be heard upon the papers formerly read and the *fiaal report of Commissioner Herndon; and it appearing from said report that a final distribution of the funds in the said causes had been made in accordance with the de-erees theretofore rendered therein, the said causes were ordered to be discontinued.
On the 9th day of June, 1873, on the motion of A. B. Botts, assignee in bankruptcy of George W. Wroten, leave was granted him to file a bill of review in said causes; whereupon he filed the same.
In the said bill of review the complainant, after setting out the proceedings in the said causes, or such of them as he deemed material to be set out, insisted that the said decrees of ¡Qecember 17, 1870, and May 19, 1871, are erroneous and ought to be reviewed and reversed for errors of law and fact apparent on tlje face of said decrees, in this, that the said loan of $10,000 was made by the said bank [o the said hotel company in consideration of the security given by the said company contemporaneously with the said loan by the deed of trust of June 27th, 1866, on the real property of the said company, whereas the act of congress of the United States commonly called the National Bank Act, approved June 3, 1864, under which act and the acts amendatory thereof the said National Bank of Fredericksburg was transacting its business and received all its powers, prohibited said bank from lending money on the security of real estate, so that the said deed of June 27th, 1866, was illegal and void, and notwithstanding the complainant was entitled to satisfaction of the balance due by said hotel company to said Wroten out of the real property of said company by virtue of the mechanics’ lien of said Wroten and the deed of trust executed for his benefit, in the proceedings mentioned. And the complainant prayed that the National Bank of Fred-dricksburg, the Exchange Hotel Company of Frederickshnrg, and others might be made defendants to the said bill of review; *that the said decrees of December 17, 1870, and May 19, 1871, might be. reviewed and reversed, and that he might have such other relief, special or general, as to the said court might seem proper.
Process having been issued, executed, and returned on said bill of review, the National Bank of Fredericksburg filed a demurrer, plea and answer thereto. The substance of the plea and answer was that the said defendant never filed, nor authorized any one to file, any answer in said cause; and it denied that the answer filed in said cause, purporting to be its answer, and sworn to by A. K. Phillips, was its answer; that respondent had no notice of said answer and had never ratified the same; that he repudiated it as an unauthorized act; and that respondent’s seal was never attached thereto, which was necessary to make it respondent’s answer. And said respondent denied “that said deed of trust of the 27th June, 1866, was an illegal act. but the same was executed in good faith and in strict accordance with law to secure a note executed by said Exchange Hotel Company; and that the conduct of this respondent touching said loan was in no way in violation of its charter or ultra vires, as is claimed by complainant.; but said loan was made on personal. security, and said deed of trust was the independent act of the grantor.’’
On the 30th day of December, 1874, the cause came on to be heard upon the said bill of review and the said answer of the National Bank of Fredericksburg thereto, and . was argued by counsel. Upon consideration whereof the court being of opinion that there was no error in the decrees sought to be reviewed, and that the said bill of review ought to be dismissed, decreed its dismission accordingly, and that the complainant pay the costs out of any assets of George W. Wroten in his hands.
From the said decree dismissing the said bill of review *the complainant therein applied to a judge of this court for an appeal; which was accordingly allowed.
Goodrich, Tittle and Wallace, for the appellant.
Marve and Fitzhugh, for the appellees.
Statutes — Contracts in Contravention of —Validity.—The piincipal case was cited in Niemeyer v. Wright, 75 Va. 239, to support the decision that the mere imposition of a penalty by statute for doing or omitting to do an act, does not of itself, in every case, necessarily imply an intention by the legislature, that every such contract in contravention of statute shall be void in the sense that it is not to be enforced in a court of justice. Principal case was also cited approvingly in Fayette Land Co. v. R. Co., 93 Va. 289.
Mechanics’ Lien. — Priority.—See 2 Min. Inst. (4th Ed.) 327.
Appeal — Review.—On a bill of review, the court will not only correct errors of law apparent in the decrees in the cause, but will look into all “the pleadings and proceedings,” and correct whatever error of law there may be in the record. Pracht & Co. v. Range, 81 Va. 711, citing principal case. Daingerfield v. Smith, 83 Va. 81.

Opinion:
MONCURE, P.,
delivered the opinion of the court. After stating the case he proceeded:
Three questions are presented to us for our decision in this case, either one of which seems to be conclusive of it. They are: first, that upon general principles the National Bank of Fredericksburg is entitled to priority of payment of the debt due to it by the Exchange Hotel Company of Fredericksburg over the debt due by the said company , to the appellant, A. B. Botts, as assignee in bankruptcy of. George W. Wroten, which said debts are in the proceedings mentioned and described; secondly, that upon the principle of equitable estoppel, such right of priority certainly exists; and, thirdly, that the appellant was certainly entitled to no relief by bill of review. We will consider these questions in the order in which they are above stated, and,
First. That upon general principles the National Bank of Fredericksburg is entitled to priority of payment of the debt due to it by the Exchange Hotel Company of Freder-icksburg over the debt due by the said company to the appellant, A. B. Botts, as assignee in bankruptcy of George W. Wroten.
The deed of trust under which the said bank claims, bearing date on the 27th day of June, 1866, having been duly recorded on the 28th of June, 1866, while the deed of trust under which the said assignee of Wroten claims bears date on the 1st day of January, 1867, and was recorded on the 23d of January, 1867, the maxim of *law, prior in tempore potior in jure, would plainly show the right of priority of the said bank, unless there be some provision of the charter of the bank which disables it from claiming under the deed of trust executed for its security by the hotel company as aforesaid.
Accordingly it is contended by the learned counsel for the appellant that there is some such provision of the said charter. Let us now enquire and determine whether there is or not.
There can be no question but that a corporation is the creature of its charter, from which it derives not only all its powers, but its very existence. It certainly has no power which its charter denies to it. But in the absence of such denial it has certain implied powers which are as complete as if they were expressly given or affirmed in the charter. One of these powers is the power to acquire estate, real or personal. Another is the power to acquire a credit by bond, bill of exchange or other chose in action, and to obtain security for the payment of such credit by mortgage, deed of trust, or other security. That a bank, the main object of whose creation is to loan out money, may acquire such a credit and obtain such security, would be a plainly implied power in the absence of a plainly expressed negation of such a power on the face of the charter of the bank. And if the charter could be fairly construed so as to make it consistent with the existence of such a power, it would accordingly be so construed.
Now let us examine the charter in this case and see if there be anything, and if anything what, which negatives the power of the bank to acquire such a credit or obtain such a security.
The National Bank of Fredericksburg was organized very soon after the war between the Confederate States and United States, under the act of the 3d of June, 1864, (see Revised Statutes of the United States, title 62, p. 998, *§ 5136,) which declares that "upon duly making and filing articles of association and an organization certificate, the association shall become, as from the date of the execution of its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power," &c. The seventh enumeration of express powers is in these words:
"Seventh. To exercise by its board of directors, or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, or bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of this title.
Section 5337 declares that "a national banking association may purchase, hold, and convey real estate for the following purposes, and for no others:
"First. Such as shall be necessary for its immediate accommodation in the transaction of its business.
"Second. Such as shall be mortgaged to it in good faith by way of security for debts previously contracted.
"Third. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings.
"Fourth. Such as it shall purchase at sales under judgments, decrees, or mortgages held by the association, or shall purchase to secure debts due to it.
"But no such association shall hold the possession of_any real estate under mortgage, or the title or possession of any real estate purchased to secure any debts due to it, for a longer period than five years."
These are the only provisions of the said act of congress which can have any effect to imply a negation of Corporate power on the part of the national banks which might be organized under it to make a loan of money on real security. Can they have any such effect? Can their effect be to annul any loan made by any such bank? to release and discharge any deed of trust or mortgage on real estate taken by the bank to secure the payment of any such loan?
We are of opinion that they cannot have any such effect.
It will be observed that none of these provisions. prohibit the banks organized under the said act of congress to loan money on real estate, nor impose any penalty on the act of any such bank in so doing. The most they do is to declare that such banks shall have power to loan money "on personal security." . Does this exclude, by necessary implication, the common-law power of such a corporation to loan money on real security, or any other security which would be satisfactory to the bank or might be desired by any persons bound as endorsers for said loan, for their indemnity? And that in the enumeration of the purposes for which, and no others, such an association may purchase, hold, and convey real estate are embraced the following, viz: "Second. Such as shall be mortgaged to it in good faith by way of security for debts previously contracted." See, also, the third and fourth specifications. How long previously contracted? A year, a month, a week, a day? There is no specification of time which must elapse between the loan and mortgage or deed of trust to make the latter valid. Was it not the object of the specification to indicate that the banks organized under the said act were not to engage in the business of speculating in lands, but in the business of making loans on bills of exchange and other negotiable securities, as incidental, however, to which latter business they were to have the oower to take mortgages and deeds of trust on real estate for the better *security of said loans, and any persons bound as endorsers for said loans were to have the power to take such mortgages and deeds of trust for their indemnity. Indeed, the third and fourth specifications expressly legalize conveyances of real estate made to any such bank in satisfaction of debts previously contracted in the course of its dealings, or such as it shall purchase at sales under judgments, decrees, or mortgages held by the association, or shall purchase to secure debts due to it.
But suppose the act of congress plainly prohibited a bank organized under it to take a deed of trust or mortgage to secure a loan in any case, or made it penal to do so. Would it follow that the deed or mortgage in spch case would be void, and that the borrower would be entitled to have the money loaned and at the same time to hold on to the property which he stipulated to give or to pledge for its security? For whose benefit could any such prohibition-have been made, or such penalty imposed? Certainly not for the benefit of the borrower or his sureties, contrary to his or their express contract, the benefit of which he or they had received. But such a provision could only have been intended for the benefit of the government, which might or might not, at its pleasure, enforce the forfeiture.
• Let us now examine some of the authorities referred to on the subject, and see how far they tend to sustain these views.
In a case decided by this court, The Banks v. Poitiaux, 3 Rand. 136, it was held that under an act of assembly authorizing a bank to hold so much real property as may be requisite for its immediate accommodation, in relation to the convenient transaction of its business, and no more; the bank may purchase more ground than is necessary for the erection of a banking-house, build fireproof houses on the vacant land, for the greater security of the banking-house, and sell them out to third persons. And that, *even if the bank violated its charter in so doing, the only proceeding against it would be by quo warranto; and the purchasers of the houses cannot resist a specific performance of their contracts by alleging that the bank had exceeded its powers in erecting and selling the houses.
In another case decided by this court, Rivanna Nav. Co. v. Dawsons, 3 Gratt. 19, only three judges were present — Baldwin, Stanard, and Brooke. Baldwin, J., delivered an opinion, and the only one that was delivered in the case, in which he said: "But a general prohibition (to purchase real estate) would not be inferred from a mere partial enactment of the incidental common law power; as, for example, from a clause authorizing a bank, or insurance or manufacturing company, to purchase land for its necessary buildings. Such a clause, whether with or without limitation as to quantity or value, would not exclude the incidental power to take mortgages or other securities on real or personal estate for debts due the corporation, or assignments or conveyances of chattels or lands in commutation therefor." "To avoid altogether the contract of a corporation made in reference to the objects of its institution is a measure of extreme rigor, and may be productive of great injustice to the corporation on the one hand, or to the other contracting party on the other. An incapacity to take will not even be inferred from an inhibition to hold, though the policy o-f the latter be to prevent the accumulation by the corporation of a specified description of property, if the purpose of the conveyance be a sale of the property by the corporation and the application of its proceeds to the objects contemplated by the charter. This proposition, reasonable in itself, may be fairly deduced from the cases of The Banks v. Poitiaux, 3 Rand. 136; Leazure v. Hillegas, 7 Serg. & Raw. 313; and Baird v. The Bank of Washington, 11 Id. 411." "At most, the act is only voidable on the ground of misuser or abuse of *the franchise, and cannot be drawn in question collaterally, especially by those having no longer any interest in the subject. The Banks v. Poitiaux, supra; Silver Lake Bank v. North, 4 John Ch. R. 370." Standard, J., concurred in the results of Baldwin's opinion. Brooke, J., dissented.
The cases of Silver Lake Bank v. North, 4 John Ch. R. 370; Leazure v. Hillegas, 7 Serg. & Raw. 313; and Baird v. The Bank of Washington, 11 Id. 411, above referred to, were cited and much relied upon by the learned counsel for the appellees in this case, and have an important bearing upon it.
In The Silver Lake Bank v. North, which was decided by that great judge Chancellor Kent, he said: "Another objection is, that the plaintiff had no right to take a mortgage concurrently with the loan, in order to secure it; and that their charter only authorized them to take mortgages for debts previously contracted. If this .objection was strictly true in point of fact, I should not readily be disposed to listen to it. Perhaps it would be sufficient for this case that the plaintiffs are a duly incorporated body, with authority to contract and take mortgages and judgments ; and if they should pass the exact line of their power, it would rather belong to the government of Pennsylvania to exact a forfeiture of their charter than for this court, in this collateral way, to decide a question of misuser by setting aside a just and bona fide contract. But if we were driven to that necessity we might, on colorable grounds, consider this to be a mortgage to secure a debt previously contracted, for it is in proof that previous to the date and execution of the mortgage the plaintiff had agreed to loan the money; and it was loaned and paid when the mortgage was delivered. The debt may be said to have been contracted for at the time of the. agreement, and the mortgage taken for its security. But I do not rest on any verbal criticism *of the kind. If the loan and the mortgage were concurrent acts, and intended so to be, it was not a case within the reason and spirit of the restraining clause of the statute, which only meant to prohibit the banking company from vesting their capital in real property and engaging in land speculations. A mortgage taken to secure a loan, advanced bona fide as a loan, in the course and according to the usage of banking operations, was not, surely, within the prohibition."
In Leazure v. Hillegas. supra, the act of 17th March, 1787, enabled the Bank of North America to have, hold, purchase, &c., lands, &c., and also to sell, &c., the same lands, &c., provided that such lands, &c., which the said corporation was thereby enabled to purchase and hold, should only extend to such lots of ground and convenient buildings, &c.. as they might find necessary for carrying on the business of said bank, &c., and should actually occupy; and to such lands and tenements as were or might be bona fide mortgaged to them as securities for their debts. It was held that the bank might purchase absolutely lands in a distant county which they did not occupy, though their title, like that of an alien, is defeasible by the commonwealth; and if they convey to a third person without claim by the commonwealth, such third person holds the same estate defeasible in like manner. The unanimous opinion of the court in the case was delivered by Tilghman, C. J.
In Baird v. The Bank of Washington, supra, it was held, that where, by the act of incorporation, a bank is empowered to hold "such lands as are bona fide mortgaged or conveyed to it in satisfaction of debts previously contracted in the course of its dealing," it has a general power to commute debts really due for real estate; and this power does not depend upon whether, in the opinion of the jury, the debt was in danger and prudence required that the real estate should be taken in satisfaction *of it. But it seems that even if the bank could not hold such real estate the acquittance of the debt would not be void and the parties remitted to their original rights; for the bank may take for the benefit of the state, which alone can take advantage of the defect of the title. It seems, too, that if the conveyance was not directly to the bank, but to trustees with a view not to permanent ownership, but to raise money by a sale of the property, it would be forbidden neither by the spirit nor the letter of the act of incorporation.
Several cases have very recently been decided by the supreme court of the United States, construing the National Bank Act in question, which are entitled to great weight in the decision of the question now under consideration, as well because of the recency of their decision as because of their being adjudication of the highest, or, at least, one of the highest, tribunals in the land, construing an act of congress (the very act we have under consideration) which bears the same relation to that tribunal which an act of a state legislature bears to the highest appellate court of that state.
One of these is the case of Gold Mining Co. v. National Bank, decided in October, 1877, and reported in 6 Otto, p. 640, in which it was, among other things, held, that a defendant, sued by a national bank for moneys it loaned him, cannot set up as a bar that they exceeded in amount one-tenth part of its capital stock actually paid in. The court in its opinion said: "The first objection to the recovery arises from the amount of the debt. The plaintiff is a national bank organized under the act of congress of June 3, 1864, with a capital stock of $50,000. By the twenty-ninth section of that act it is provided as follows: The total liabilities to any association of any person or of any company, &c., for money borrowed, &c., shall at no time exceed one-tenth part of the amount of *the capital stock of such association actually paid in. Rev. St. § 5200.
"After obtaining and holding to its own use the money, can the mining company be allowed to interpose the plea that the bank had no right to loan the money? In Harris v. Runnels, 12 How. U. S. R. 79, where the defendant sued upon a note, set up the illegality of its consideration, it was held that the whole statute then in question must be examined to discover whether it is intended to prevent courts of justice from enforcing contracts in relation to the act prohibited; and that when a statute prohibits an act, or annexes a penalty -for its commission, it does not follow that the unlawfulness of the act was meant to avoid a contract made in contravention of it. A statute provided that slaves should not be brought into the state without a previous certificate signed by two freeholders. Slaves were brought in without such certificate and sold, and the purchaser was held liable for the purchase money. Mr. Justice Swayne said that the rule was allowed, not for the benefit of either party to the illegal contract, but altogether upon grounds of public policy.
"In O'Hare v. The Second National Bank of Titusville, 77 Pa. St. 96, the question was made on the statute we are considering, and it was objected that the bank could not recover the amount of the loans in excess of the proportion specified. The court held that the section of the statute referred to was intended as a rule for the government of the bank, and that the loan was not void. See also Pangborn v. Westlake & al., 36 Iowa R. 546; Vining & al. v. Bricker, 14 Ohio State R. 331.
"We do not think that public policy requires, or that congress intended, that an excess of loans beyond the proportion specified should enable the borrower to avoid the payment of the money actually received by him. This would be to injure the interests of creditors, stockholders, *and all who have an interest in the safety and prosperity of the bank."
The opinion of the court was delivered by Mr. Justice Hunt, and the judgment of the court below was unanimously affirmed.
In a still more recent case, decided by the same court during the present year (1878), and reported in the February number of The Reporter, vol. 5, p. 225, Union Gold Hill Mining Co. v. Rocky Mountain National Bank, the construction of the same provision of the same act of congress was involved, and the same decision was made, the same Justice delivering the opinion of the court, affirming the judgment of the court below.
See also Hayward v. National Bank, 6 Otto, 611.
Several cases apparently to the contrary of the foregoing were cited in the argument of the learned counsel for the appellant, and especially the case of Fowler v. Scully, 72 Penn. St. (22 P. F. Smith) 456; also reported in 13 American Reports, 699. In that case the judgment of the court below was reversed by a divided court, Agnew, J., delivering the opinion of the majority, and two of the judges, Sharswood and Williams, dissenting.
Without further commenting, however, upon this and some other like cases referred to on the same side, it is sufficient to say that, in our opinion, if they be in conflict with this case, they are outweighed by the cases referred to on the other side, which we have already commented upon.
In the case under consideration the Exchange Hotel Company was incorporated just before the late war between the Confederate States and the United States to erect a first-class hotel in the city of Fredericksburg, which was deemed to be very important to the convenience and prosperity of that city. When the war came on, the hotel, about the erection of which a great deal of money had been expended, was *still unfinished, and was of little or no value in that unfinished state for any purpose. It was occupied during the war by Confederate and Federal forces alternately and during and after the war by colored, people who flocked to the said city. When the war was over and efforts were being used to improve the city, which had sustained great and almost irreparable damage, it was considered all-important to its prosperity that the Exchange hotel should be completed if possible, and as soon as possible. But it would require at least ten thousand dollars to complete it. And where to obtain that large amount in those trying times was a question very hard to be solved. It could not be obtained of an individual, and could only be obtained of the National Bank of Fredericks-burg, whose stockholders, directors and officers were deeply interested in the prosperity of the city, and deeply anxious concerning it. It was their duty, of course, to do all they legally could to promote the prosperity of the city, and with that view, to aid in the completion of the Exchange hotel. They, therefore, agreed to loan $10,000 to the company for twelve months, upon being well secured. But the difficulty was in procuring satisfactory security for so large a sum during the period and under the circumstances ' which then existed. To depend alone on personal security for so large a loan and so ' long a period, of credit, would have been extremely hazardous, however good the apparent credit of the parties may then have been. It seemed to be absolutely necessary to the success of the object in view 'that security should be obtained by a lien on real estate, either directly by the bank itself, or indirectly by the maker and endorser of the note. Had such security been obtained by the maker and 'endorser of the note by a deed of trust executed on the Exchange *hotel for their indemnity, no question would have been raised as to the validity of the deed or of the note, to secure the payment of which it would have been executed. What difference can it make that the deed of trust was executed to secure the payment of the note without expressly and literally providing for the indemnity of the maker and endorser? Is not the effect precisely the same.
Then again, the money was not invested in the purchase of real estate. Nor was it borrowed upon the security of real estate for the purpose of being expended otherwise than upon that estate. On the contrary, it was borrowed to be expended upon that estate, in making it, from being an expensive and unproductive building, a first-class hotel, so necessary to the prosperity of the city, in which all its citizens were deeply interested, as was also the state at large. At that time no expenditure was considered more important for the city, or more prudent and.proper, looking to the interest of the owners of the hotel. Property in and about Fredericksburg soon after the war took a rise, and it was hoped and believed would continue to rise, so that the completion of the hotel would be beneficial alike to its owners and the public. For several years after the hotel was completed it was leased out for a large sum, as much as $2,500 per annum, which, if it had continued for a few years, would have enabled the company to have paid off all its debts. Had that reasonable and expected result followed, all would have commended the propriety and prudence of what was done in regard to the completion of the work. But instead of such a result there was a sudden and unexpected change in the times, and in the value of real estate in and about Fredericksburg. The tenants of the Exchange hotel became bankrupt, the property became of little value, and could not be ^rented out for little if any more than enough to pay the amount of taxes and insurance annually due thereon, and the sale of the property became necessary to pay the amount which had been borrowed to complete the hotel.
Is it reasonable or right that such an improbable and unexpected result should produce a radical and complete change in the rights of the parties?
We think not, and we are therefore of opinion that, upon general principles, the National Bank of Fredericksburg is entitled to priority of payment of the debt due to it by the Exchange Hotel Company of Fred-ericksburg over the debts due by the said company to the appellant, A. B. Botts, as assignee in bankruptcy of G. W. Wroten.
But even if we can be wrong in that conclusion, we think, secondly, that upon the principle of equitable estoppel such right of priority certainly exists.
The money was borrowed by the said company for the special and only purpose of completing the hotel, and was secured by a deed of trust upon the hotel. These facts were "known to George W. Wroten, the mechanic employed by the company to complete the hotel, who was to receive payment out oí the money so borrowed, to the extent to which it could be spared for that purpose, and the balance which might remain due and unpaid to him, after receiving such payment, was to be secured to him by a lien on the hotel, subject expressly to a prior lien to the holder of the note for the money borrowed as aforesaid. Of that money the sum of eight thousand dollars was paid at once to George W. Wroten, and the balance was paid for insurance, taxes and other necessary expenses of the property. And more than six months after the date and recordation of the deed of trust executed to secure the return of the money borrowed as aforesaid, *the said Wroten received a deed of trust executed by the hotel company on their said property to secure the payment of the balance due to him, but expressly subject to the prior lien for the balance due of the money borrowed as aforesaid. Now is it not plain and clear that George W. Wroten, having contracted to complete the Exchange hotel with a full knowledge of the means which had been used to raise the money to pay for the work, and having received eight thousand dollars of the said money, is equitably estopped from claiming against the deed of trust executed to secure the return of the money loaned as aforesaid, the priority of which deed over that under which he claims is expressly admitted on the face of the latter? We certainly think so, and we consider it unnecessary to cite any cases on the subject. See Insurance Co. v. Wilkinson, 13 Wall. U. S. R. 222.
But even if we can be wrong in that conclusion also, we think, thirdly and lastly, that the appellant was certainly entitled to no relief by bill of review.
A bill of review can only be brought upon two grounds: First, error in law apparent upon the face of the decree; second, the discovery of new matter which could not have been used at the time of making the decree. Story's Eq. § 403, et seq.; 2 Rob. Pr. 414, old ed. The bill in this case was brought upon the former ground only — error in law apparent upon the face of the decree. Error in fact in a final decree can be corrected only on appeal to an appellate court, and not on a bill of review in the same court. What may be said to be "the face of the decree," within the meaning of the rule, is different in England and in this country. In England Ihe decree embodies the substance of the bill, pleadings and answers. In the courts of the United States the decree usually contains a mere reference to the antecedent proceedings ^without embodying them. But for the purpose of examining all errors of law. the bill, answers and other proceedings are, in our practice, as much a part of the record before the court as the decree itself; for it is only by a comparison with the former that the correctness of the latter can be ascertained. Story's Eq. PL § 407; Putnam v. Day, 22 Wall. U. S. R. 60.
In this case we have endeavored to show that there is no error in the decree complained of, and if we be right in that respect there can of course be no good ground for a bill of review. The only ground for relief relied on in the bill of review which we have not already disposed of is the claim to a mechanics' lien under the statute, by virtue of which priority seems to be claimed for Wroten, not only over Armat and the other judgment creditors of the hotel company, but also over the national bank. The articles of agreement between Wroten and the hotel company bore date on the 14th of August, 1866, and was recorded in the corporation court of Fred-ericksburg on the 2d day of October, 1866, from which latter date he was, no doubt, entitled to a mechanics' lien on the said property under the statute. But that lien was posterior and subordinate to the lien of the said bank under the said deed of trust in their favor, recorded on the 27th of June, 1866, and was in fact merged in the lien by deed of trust afterwards taken by Wroten as aforesaid to secure the same debt, in which deed it was expressly declared that the property conveyed was subject to the prior lien in favor of the bank as aforesaid. There is in the record 'no copy of the said articles of agreement; no doubt because the lien acquired by having them recorded was considered by Wroten as merged in the lien of the deed of trust as aforesaid. The effect of the said deed of trust of the 27th of June. 1866, was to enure to the benefit of all *the then existing creditors of the hotel company pro rata, which effect was not denied by Wroten, though he was not one of the existing creditors, but was a subsequent creditor of the hotel company, and was thus postponed to all of the said existing creditors. But he contended that this right of the said existing creditors ought to be confined to the property in the condition in which it was on the 27th day of June, 1866, when the said deed of trust for the benefit of the bank was recorded. In this, however, he was clearly wrong, and the court below accordingly decided that the said existing creditors had priority over Wroten in regard to the property in the condition it was in at the time of the sale thereof under the decree. The property was first cried'out to Wroten as the highest bidder therefor, and he claimed to be entitled to the property as such highest bidder, though he did not comply with the terms of sale. The court, however, held that the said sale was not valid, declined to confirm it, and decreed a resale, which was accordingly made. Thus the only apparent grounds of complaint which Wroten had to the final decree when rendered were the two before referred to, viz: that the prior lien of the existing creditors should be confined to the property in the condition it was in when that decree was rendered; and, secondly, that, he ought to have been confirmed as purchaser. But he took no appeal and apparently acquiesced in the final decree until more than two years thereafter, when he had become a bankrupt, and when his assignee in bankruptcy filed the said bill of review. But did not therein rely on either of the said two grounds.
We think the court below did not err in dismissing the said bill.
It may be proper, before concluding our opinion in this case, to notice an objection taken, for the first *time, in the petition for an appeal in this case, that the deed of trust of the 27th day of June, 1866, before referred to, "did not have affixed thereto the seal of the said hotel company, nor was the said hotel company by name a party to the same." To the said objection a short but all-sufficient answer is, that it comes "too late." It was not made in the appellant's answer to the original bill, nor in the progress of the original suit, nor in the bill of review, nor in the proceedings on that bill. But, on the contrary, the validity of that deed, as a deed duly executed by the said corporation, was admitted by the appellant, either expressly or by plain implication, throughout the proceedings in the cause in the court below. Had such an objection been made in the court below while the cause was pending therein, all foundation for it, if any such in fact existed, might have been completely removed by the most conclusive proof exhibited by the National Bank of Freder-icksburg. Instead of making the objection, if there was any foundation for it, at the proper time, the validity of the deed was, tacitly at least, admitted. There was a decree for a sale in pursuance of it, all the creditors of the hotel company, except the appellant, united in becoming purchasers of the property at said sale in proportion to their claims, credit was given by them on their said claims for their ratable proportions of the purchase money, the property was conveyed to them, a final decree was entered in the cause, and not until after a decree was made dismissing the bill of review filed by the appellant several years after the final decree was rendered in the original suit, was the objection aforesaid made. It would doubtless not be a difficult matter, even now, to show that the objection is unfounded; but as it is wholly unnecessary to do so, this opinion will, therefore, here be ended.
*We are of opinion that there is no error in the decree appealed from, and that the same ought to be affirmed; which is decreed accordingly.
Decree affirmed.