Court Opinion

ID: 3885811
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:15:41.079659+00
Date Added: 2024-06-11T14:15:27.678241
License: Public Domain

May 14, 1923. Rehearing refused December 1, 1923.
The opinion of the Court was delivered by
This is an appeal from an order of Hon. W.H. Townsend, Circuit Judge dated July 5, 1922, granting the petitions of the respondents Columbia Savings Bank  Trust Company and Nicholson Bank  Trust Company of Union, S.C. to be made parties defendant in the main cause above stated of James E. Turner against Washington Realty Company *Page 389 
and others, and modifying a previous order of Hon. J.E. Peurifoy in said cause, dated April 7, 1922, to the extent hereinafter explained.
The main cause arose out of the following facts:
On the ____ day of ____, 191 ____, the plaintiff therein, James E. Turner, recovered a judgment against Washington Clark, the balance unpaid upon which, on April 26, 1921, the date of the Special Referee's report, was $32,501.47, with interest from December 1, 1918. The date of the judgment is not given in the record, but it was prior to the death of Washington Clark, which occurred in November, 1918.
On the 10th of June, 1916, Washington Clark conveyed to the defendant Washington Realty Company, a corporation organized and principally owned and controlled by him, a certain piece of property in the city of Columbia, near the County Courthouse, known as the Clark law building; the deed was recorded on June 23, 1916.
On March 24, 1920, the plaintiff, James E. Turner, instituted the main cause against Washington Realty Company, W.A. Clark, J.C. Townsend, Mary Etta C. Clark, individually, and as administratrix and as heir at law of Washington Clark, deceased, Katherine Stuart Clark, individually and as heir at law of Washington Clark, deceased, and certain other parties, hereinafter named, holding mortgages upon the Law building referred to, for the purpose of having the deed from Washington Clark to Washington Realty Company, dated June 10, 1916, hereinafter referred to, declared null and void and set aside as in fraud of the creditors of Washington Clark.
At the date of the institution of the main cause, the following liens, by mortgage and judgment, executed by and recovered against Washington Clark were existing: (1) Directors of Columbia Theological Seminary — mortgage executed December 17, 1909, to J. Caldwell Robertson, and subsequently assigned to the seminary, for $14,000. *Page 390 
(2) Mary Etta C. Clark — mortgage executed December 18, 1909, to Elizabeth C. Melton, and subsequently assigned to Mrs. Clark, for $4,339.95, with interest from April 1, 1922, and 5 per cent. attorney's fees. (3) Mary Etta C. Clark — mortgage dated October 22, 1915, for $7,000. (4) Amy S. Weston — judgment, entered February 7, 1916, in favor of National Loan  Exchange Bank, and subsequently assigned to Mrs. Weston, for $4,306,68, upon which there appears to be due as of April 1, 1922, $1,540.17, with interest from that date. (5) Carolina National Bank — mortgage, dated April 22, 1916, executed to Mary C. Brockman, and subsequently assigned to the bank, for $7,000. (6) Fletcher Brockman — judgment, entered May 30, 1916, in favor of T.B. Stackhouse, and subsequently assigned to Brockman, for $31,081.58, upon which there appears to be due, as of April 1, 1922, $1,344.74, with interest from that date. (7) Columbia Savings Bank 
Trust Company — judgment entered June 30, 1916, for $1,604.83, with interest from July 7, 1916. (8) Nicholson Bank  Trust Company of Union, S.C. — judgment, entered February, 1918, for $5,305.45, with interest from that date. (9) James E. Turner; judgment entered ____, 191 ____, for $ ____, with interest from date, amount unpaid on December 1, 1918, being $32,501.47, bearing interest from that date.
The following mortgage creditors were made parties to the main cause:

1. Theological Seminary _____________________ $14,000.00
2. Mary Etta C. Clark _______________________   4,339.95
3. Mary Etta C. Clark _______________________   7,000.00
5. Carolina National Bank ___________________   7,000.00
                                            ____________
                                              $32,339.95

The "case" contains this statement:
"The interest (upon these mortgages) having been practically paid up (i. e. up to the date of the referee's report)." The parentheses are added. *Page 391 
For some reason the other lien creditors (judgment creditors), were not made parties to the suit:
4. Amy S. Weston ___________________________  $1,540.17
6. Fletcher Brockman _______________________   1,344.74
7. Columbia Savings Bank  Trust Co ________   1,604.83
8. Nicholson Bank  Trust Co _______________   5,305.45

The complaint alleges, in substance, that Washington Clark, being then heavily indebted, and with a view to hinder and delay his creditors, made the conveyance in question in fraud of his creditors. The defendant Mary Etta C. Clark answered, denying the allegations of fraud, and setting up the several amounts due to her. The other defendants, it is assumed, answered setting up their liens. The case was referred to Hon. R.O. Purdy, as Special Referee. He held a number of references, took the testimony, and made a report dated April 26, 1921, in which he held that the conveyance was voluntary, in legal fraud of the rights of creditors, and should be set aside. He also reported upon the mortgages of the defendant mortgagees, as above indicated, and recommended that Amy S. Weston and Fletcher Brockman, assignees of the judgments numbered 4 and 6 above, be made parties and allowed to prove their claims. It does not appear in the "case" upon what authority they did so, but the statement appears that they "were duly made parties, appeared and proved their debts"; and the same appears in the decree of Judge Peurifoy.
Upon exceptions to the report of the Special Referee, the matter was heard by his Honor, Judge Peurifoy, who on April 7, 1922, filed a decree, confirming the report of the referee, directing the cancellation of the deed in question, settling the priorities of the lien creditors who were before him, and ordering a sale of the property and a distribution of the proceeds as follows: 1. Costs and expenses. 2. The Seminary mortgage (No. 1). 3. The Melton mortgage (No. 2). 4. Mary Etta C. Clark mortgage (No. 3). 5. The Brockman mortgage (No. 5). 6. The homestead of *Page 392 
Mrs. Clark, $1,000. 7. The Weston claim, judgment of National Loan  Exchange Bank (No. 4). (It is not clear why the Brockman mortgage, No. 5, dated April 22, 1916, was allowed priority over this judgment dated February 7, 1916.) 8. The Brockman claim, judgment of Stackhouse (No. 6). 9. The remainder to the plaintiff, James E. Turner, upon his judgment. From this decree no appeal has been taken by any of the parties.
The property was duly advertised, and a sale had at public auction, on the first Monday in May, 1922, at which time it was bid off by the plaintiff, J.E. Turner, at $65,000. He made the $5,000 deposit as required, but failing to comply with his bid, the property was readvertised and resold in June, at which time it was again bid off by Turner, at $60,000. He made the $5,000 deposit as required for this sale, but no further steps have been taken; his bid remains uncomplied with on account of the subsequent proceedings to be noted.
On June 28, 1922, Columbia Savings Bank  Trust Company, in whose favor, as stated above, a judgment was entered against Washington Clark on June 30, 1916, for $1,604.83 (No. 7), filed a petition in the main cause, setting forth the various proceedings above detailed, alleging that it had not been made a party to said cause, that by virtue of said judgment it had a lien upon the property sold, and praying that it be made a party to the cause, that it be permitted to set up and establish its judgment lien, and that the administrative portion of the decree of sale be modified so as to provide for the payment of said judgment, next after the Brockman claim, and before the plaintiff's judgment.
Thereupon, on June 28, 1922, the Honorable W.H. Townsend, Circuit Judge, passed an order requiring the parties to show cause before him in open Court on July 3, 1922, why the petition should not be granted, and enjoining the distribution of the proceeds of sale pending the hearing *Page 393 
of the petition. The order and petition were served upon the plaintiff on the following day. The plaintiff served a lengthy answer to the rule, containing 23 grounds of objection. Let the return be reported.
The matter then coming on to be heard, the Presiding Judge passed an order, dated July 5, 1922, allowing the petitioner to be made a party defendant and further provided:
"That so much of the judgment rendered by this Court, in the above-entitled action at the past April term, as provided for the distribution of the surplus proceeds of sale of the real estate ordered sold in this action, after the payment of the amounts therein found to be due to the mortgage creditors therein mentioned be vacated and set aside, and the cause recommited and referred to the Honorable R.O. Purdy as Special Master, with directions to take the testimony and report the same with his findings of fact and conclusions of law with reference to claims of petitioners stated in their petitions heretofore filed, and as to the priority of the various judgment creditors who may prove their rights to participate in the distribution of said proceeds of sale; and also to take testimony and report what would be a proper fee to be allowed the plaintiff's attorneys as a part of the costs and expenses of this action (and to be paid them prior to the application of any part of such proceeds to payment of the amounts due the judgment creditors) for their services rendered in the prosecution of this action, as far as was necessary to obtain the decree and judgment vacating and setting aside said deed of conveyance and for the sale of said property."
On June 30, 1922, Nicholson Bank  Trust Company, in whose favor, as stated above, a judgment was entered against Washington Clark on February ____, 1918, for $5,305.45 (No. 8), filed a similar petition in the main cause, and asked for a similar order and rule. Judge Townsend, before whom the application was made, stated that — *Page 394 
"He had already issued a rule to show cause upon the petition of the Columbia Savings Bank  Trust Company, and that one rule would suffice; that he would hear both petitions together upon the one rule, since both petitions raised identical questions."
Both petitions were accordingly heard at the same time, and the order which Judge Townsend passed included the Nicholson Bank  Trust Company as well as the Columbia Savings Bank  Trust Company.
At the hearing, the attorneys for the plaintiff entered an objection to the hearing of the Nicholson Bank  Trust Company's petition and the affidavit in support of it, upon the ground that the petition had not been served upon the plaintiff, and no order had been passed in reference to it. The Circuit Judge overruled the objection, and proceeded to hear the matter along with the other petition. The plaintiff has appealed from the order of July 5, 1922, upon numerous grounds, which will be reported.
Considering first the appeal from so much of the order as affects the Columbia Savings Bank  Trust Company alone, reserving for the time consideration of so much of it as affects the Nicholson Bank  Trust Company.
That the plaintiff intended that the Court should take the property in hand, sell it, distribute the proceeds of sale, among the lien creditors according to their priorities appears beyond a doubt. He made the four mortgage creditors parties defendant, and asked that they be required to present and prove their claims in that proceeding. In his action as a judgment creditor to set aside the deed as fraudulent, he was not required to make any lien creditors parties. The fact that he made some of them parties, asked that they be required to prove their claims in that suit, and allowed, without exception, two other judgment creditors to be made parties and prove their judgments, indicates a purpose on his part to treat the complaint as a bill to marshal *Page 395 
assets, and shows that the failure to include all the lien creditors, was an inadvertent omission.
The report of the Referee, confirmed in all particulars by the decree, demonstrates very clearly that he so understood the complaint and the purpose of the plaintiff. Speaking of the Weston and Brockman judgment claims, the Referee says:
"It seems to me that it would not be wise to permit it (the property) to be offered for sale subject to these outstanding liens, and leave the case open for further litigation."
He then recommended that the property be sold at public auction, for cash, "freed from all liens." It does not appear that the plaintiff took any exception to these recommendations. Certain it is that the decree of Judge Peurifoy "confirmed in all particulars" the report, and that no notice of appeal was filed by any of the parties thereto.
The plaintiff had any one of three remedies: (1) To levy his execution, sell the property, bid it in, and sue for the recovery of possession. (2) To bring an action to set aside the conveyance, and, if successful, to levy his execution and sell. (To such an action creditors by liens antedating the attacked conveyance would not have been necessary parties.) (3) To bring a creditors' bill to set aside the conveyance and to sell the property under order of Court, distributing the proceeds of sale according to priorities of liens.
The last remedy mentioned is that which he practically adopted, and which he allowed, by the recommendations of the Referee, confirmed by the decree, to stand as the legal interpretation of his action. He is therefore not in a position to contest that interpretation.
The petitioner was not compelled to intervene in the cause, but, it appearing so clearly that the Court had assumed control of the res for the purpose of selling it, "freed from all liens," and that notice of lis pendens
had been filed, the petitioner acted with proper caution and *Page 396 
great propriety in assisting the Court in carrying out its purpose and "not to leave the case open for further litigation."
In the case of In re Spragins, 44 S.C. 65; 21 S.E., 543, Chief Justice McIver, delivering the opinion of the Court, says:
"The case of Wiswall v. Sampson, 14 How., 52, which seems to be relied upon by the Circuit Judge, is not in point, for the only point decided in that case, so far as the question we are considering is concerned, was that a judgment creditor having a lien upon the land of an insolvent debtor, which is in the possession of a receiver, appointed by the Court of Chancery, under a bill by a creditor against the debtor and a third person, to set aside a conveyance to the latter for fraud, cannot levy his execution upon such land, if he have notice of the fact that the property is in the custody of the law, but his remedy is to apply to the Court of Chancery, which will take care to protect his interest in making a sale or in distributing the proceeds. This is exactly in accordance with the principle laid down in Gracey v. Davis,supra, to wit: That if the Court takes charge of the fund it will direct that it be paid out to the creditors according to their legal priorities. So that, if the judgment creditors standing in the second class had undertaken to levy their executions upon the land of Poole, after the Court had taken charge of his assets and placed them in the hands of a receiver, then the case of Wiswall v. Sampson would have been precisely in point. But these creditors have not undertaken to do anything of the kind. On the contrary, they are pursuing the same course indicated as the proper course in the case of Wiswall v. Sampson — that is, asking the Court to respect and provide for their legal priorities."
By the action of the plaintiff, by the recommendation of the Referee, by the confirmation of the report in the decree, unexpected to by the plaintiff, by the order of sale and distribution, the Court was in as complete possession of the fund *Page 397 
as if the property had been put into the hands of a receiver; the petitioner has pursued the very course outlined above.
In the case of French v. Gapen, 105 U.S. 509;26 L.Ed., 951, the plaintiff. Gapen was the holder of certain certificates of stock in a canal company, which had been issued by authority of the state, contained in a conveyance of the canal property to trustees; he filed a bill in equity against the trustees alone, asking that the property be sold in such manner and on such terms as would best protect the interests of those entitled to share in the proceeds, and so as to bring the highest price and to vest title in the purchaser. While the trustees were in control of the property they leased certain water power made available by their work, to Spears 
Case, contractors. These contractors were not made parties to the suit; the trustees being the only defendants. The cause proceeded to judgment, and a decree was signed directing a sale of the property. The portion in which the contractors were interested was sold for a certain price, and the sale confirmed. Thereafter, and "before any final distribution of the proceeds of sale had been made," the contractors filed a petition of intervention setting up a claim of $24,000, which they insisted was a lien upon the property.
It is true that in this case there was no objection to the intervention of the contractors, but the remarks of the Court are pertinent in reference to the propriety of the intervention:
"They were not originally parties to the suit. No sale of the trust property could be made in their absence which would dispose of their rights. All that could pass under such a sale would be that which was conveyed by the State to the trustees, to wit, the canal, and subject to the prior rights of the petitioners. No decree binding on the petitioners could be rendered, defining what their rights actually were. A purchaser would take only what the trustees held, and be left to settle with the petitioners as best he could," — precisely the situation that confronts the purchaser of the property in the case at bar. The Court further says: *Page 398 
"The decree, as entered, is broad enough on its face to authorize a sale of the property free of all incumbrances. * * * It seems to us eminently proper that before the money paid under the sale is put beyond the control of the Court it should be determined what, under the new developments, the rights of the several parties in respect to the property in question really are. From what appears, it is clear that the Court expected to sell, and the purchasers supposed they were buying, the whole property free of all encumbrances. If that be so, the money in the hands of the Court may not, perhaps, improperly be treated as representing what it was supposed would pass by the sale, rather than what actually did pass as the parties stood when the decree was entered. The petitioners, in their intervening petitions, state in terms their willingness to treat the sale as binding on them, if they can be paid from the proceeds what in equity represents the value of their interest in the property sold. As the case now stands, we see no reason why this may not be done."
It would be difficult to put the case of the present intervening judgment creditor more strongly.
In Heath v. Bishop, 4 Rich Eq., 58; 55 Am. Dec., 654, it is said:
"Whenever this Court takes hold of an equity for the purpose of giving relief to a creditor, it will do so in behalf of all the creditors, and will marshal the fund among them according to their respective rights. It is a wholesome rule of practice and will be insisted on."
In Gracey v. Davis, 3 Strob. Eq., 55; 51 Am. Dec., 663, the Court says:
"The effect of setting aside the deeds is to leave the creditors to enforce their claims and obtain satisfaction according to their legal priorities; or, if this Court takes charge of the fund, to direct them to be paid according to their legal rank."
"It is also a familiar principle that, in order for the process of the Court to convey lands free from incumbrances, *Page 399 
the incumbrancers must be parties to the proceedings; otherwise the purchaser takes subject to the right of the incumbrancers."Marion County Lumber Co., v. Tilghman Lumber Co.,84 S.C. 505; 66 S.E., 124, 877.
The policy of the law favors a complete determination of the rights of all parties concerned in a litigation. This policy should not be thwarted by technical objections; particularly when, as in the case at bar, the rights of parties will be advanced rather than prejudiced.
Section 171 of the Code provides:
"The Court may determine any controversy between the parties before it, when it can be done without prejudice to the rights of others, or by saving their rights; but when a complete determination of the controversy cannot be had without the presence of other parties, the Court must cause them to be brought in."
That the petitioner under the circumstances was entitled to intervene in the main cause, is settled by the authorities beyond controversy:
"As we understand the modern practice, any person feeling that he has an interest in the litigation may apply to the Court, and be permitted to intervene and become a party, and have his rights passed upon on the hearing; and the Court will permit him to become such party on a proper showing." Marsh v. Green, 79 Ill., 385.
Parties having an interest in the subject matter of the suit in equity, and who are either necessary or proper parties to such suit, if not made so by the plaintiff, may come in by way of application to intervene and be made parties complainant or defendant, to the end that their interests may be adjudicated and protected. Shannahan v. Stevens,139 Ill., 428; 28 N.E., 804.
"In the absence of statutes to the contrary, it has been said that an intervention may be permitted at any stage of the proceedings. * * * If it does not relate to the merits of the question, * * * the intervention need *Page 400 
not delay the main action nor necessarily unsettle any judgment entered therein. Hence in such case there is no reason why an intervention may not be after, as well as before, final judgment." Note, 123 Am. St. Rep., 295.
"Persons who have liens on the property affected by the suit or whose liens may be impaired by the judgment are entitled to intervene." Note, 123 Am. St. Rep., 302, citingMcCarthy v. Kirksley, 70 Ark. 444; 69 S.W. 53, and numerous other cases.
"Persons who, while not parties to the record, are parties in interest really affected by the judgment, stand in such relation to the judgment that they are entitled to move to set aside or vacate it." 15 Enc. P.  P., 251.
The fact that Turner, the junior judgment creditor, has become the purchaser at the sale, instead of a third person, an outsider, cannot possibly affect the case. If such outsider had purchased, expecting to get what the Court was endeavoring, with the assistance of the plaintiff, to give, a title "freed from all liens." he certainly would not object that the Court should pause until "it should be determined, what, under the new developments, the rights of the several parties in respect to the property in question really are," and that, if the intervening petitioners should establish their liens, that the purchase price be applied to them, rather than to the Turner judgment.
It is difficult to see how the plaintiff is in the slightest degree prejudiced by the intervention of the petitioner. It was not a party to the main cause, and was not therefore concluded by any provision in the decree. Its judgment still stood as a lien upon the property, and if the sale was confirmed in the absence of the petitioner, the plaintiff who bought the property at sale would have to reckon with the petitioner. What difference can it make to the plaintiff, if he should be compelled to allow the judgment out of the purchase price, instead of having to pay the judgment after he had received title for the property? To illustrate: *Page 401 

The purchase price was __________                 $60,000.00
The mortgages ___________________    $32,339.95
The Weston claim ________________      1,540.17
The Brockman claim ______________      1,344.74    35,224.86
                                    ____________  __________
                                                  $24,775.14

As the decree originally stood, the plaintiff would have to pay in $35,224.86, in addition to interest, attorneys' fees, and costs, and would apply $24,775.14, less such interest, attorneys' fees, and costs, to his judgment, and then would hold the property subject to the judgments of $1,604.83 and $5,305.45, besides interest, attorneys' fees, and costs, a total of $6,910.28, which he would have to pay to clear his title. By allowing the intervention of these judgments, amounting to $6,910.28, he would have to increase the payment upon his bid correspondingly, making it $35,224.86 plus $6,910.28, a total of $42,135.14. In other words, he would pay the $6,910.28 to the Master instead of to the Sheriff enforcing the execution upon the two judgments afterwards.
The case of Ex parte Union Mfg.  P. Co., 81 S.C. 265;62 S.E., 259; 128 Am. St. Rep., 908, fully answers the objection of the plaintiff that the petitioner is not entitled to relief under Section 225, and that the Circuit Court has no power to modify a previous judgment of the Court, and is ample authority to sustain the order of Judge Townsend.
In that case certain land upon which the company desired to acquire the right of flowage, was owned by three tenants in common; two of them executed a grant of the desired easement to the company; the third one, who had not signed the paper, brought suit against the company for damages to her undivided interest. The company answered, claiming the equity to have that portion of the land affected by the flowage, allotted to the tenants in common who had granted the easement. Pending this action the two granting tenants in common instituted partition proceedings against the third. *Page 402 
without notice to the company, and secured a decree in partition allotting the portion affected by the flowage to the tenant in common who had not executed the easement; the evident effect and purpose being to enable her to collect the full damages. After the decree had been signed, which was a final judgment, the company filed a petition that the decree be opened, and that it be permitted to be made a party and allowed to set up its equity. The Circuit Judge refused the petition, but upon appeal his order was reversed, and the petition granted. The Court held that Section 225 (then 195) was full warrant for opening the decree.
In Bank v. Havird, 99 S.C. 110; 82 S.E., 1006, the Court allowed the vacation of a judgment, independently of Section 225 of the Code, upon the ground of mistake on the part of the adverse party; and that is just what is sought here, the omission of the plaintiff, in practically a creditor's bill, to make provisions for judgment creditors.
That the Court, as a necessary incident to allowing the petitioner to intervene, had the power to modify the decree of Judge Peurifoy, is perfectly clear.
In Brenan v. Burke, 6 Rich. Eq., 200, the Court says:
"It was said by Lord Eldon, 16 Ves. 327, that `the Court must be always open to questions upon the carriage of the cause.' And this remark was in reference to the subject of protecting the rights of creditors not specially included in the pleadings, and as to the mode of doing so."
See also the opinion of the Court, recently filed, in the case of Outlaw v. Barnes, 117 S.E., 363.
The plaintiff, by his action to set aside the deed for fraud, could acquire no priority over the legal liens which existed upon the property.
Speaking of a deed declared by the Court to be fraudulent, it is said in Du Rant v. Du Rant, 36 S.C. 49; 14 S.E., 929:
"The very act itself, * * * is made by the law a fraud, and vitiates the deed as to existing creditors. * * * If it was a fraudulent deed, it was void at its execution and ever since that time." *Page 403 
In Curlee v. Rembert, 37 S.C. 214; 15 S.E., 954, a deed was attacked for fraud by a junior judgment creditor, not by creditors' bill or bill to marshal assets, but for the benefit of the plaintiff alone, just as the plaintiff in the case at bar, erroneously contends the nature of his suit to be. The deed was adjudged fraudulent, and the plaintiff contended that, as there was sufficient other property to satisfy a senior judgment, the deed should be declared void only so far as the attacking creditor was concerned; but the Court held otherwise, saying:
"Whether the voluntary conveyance of a debtor is void as to existing creditors, must depend, with inconsiderable exception, upon the event — the ultimate insolvency of the debtor. `A voluntary settlement is void as to existing creditors, if the donor afterwards proves to be insolvent.' * * * The decree in the case (Judge Aldrich's) pronounced the conveyance to Mrs. Rembert void, without limitation or qualification, and called in the creditors of the debtor. There was no appeal, and it is not plain how we can consider the conveyance void as to the plaintiff's judgment, and not as to the judgment confessed to Mrs. Jones. * * * It seems to me that, being void as to one, it was void as to all existing creditors without discrimination."
In Curlee v. Rembert, 37 S.C. 214; 15 S.E., 954, it is said:
"A fraudulent conveyance is no conveyance at all, but a mere nullity, the title remaining all the while in the debtor, and subject to all legal liens, as if the fraudulent deed never existed."
In Gracey v. Davis, 3 Strob. Eq., 58; 51 Am. Dec., 663, the Court said:
"Where a deed is set aside as interfering with the rights of creditors, it is, as to those creditors, as if it had never existed."
In Ex parte Spragins, 44 S.C. 65; 21 S.E., 543, a creditors' bill had been filed for the purpose of setting aside *Page 404 
certain conveyances claimed to have constituted an assignment in violation of law. Certain creditors who had not been enjoined, or required to participate in the action by coming in and proving their demands, recovered judgments against the debtor after the creditors' bill had been instituted. The Court held that they were entitled to claim the liens of their judgments, saying:
"For it is well settled that, when a deed is set aside, it is, as to the creditors, as if it never had existed (Gracey v.Davis, 3 Strob. Eq., 55, Claflin v. Iseman, 23 S.C. 416, and Younger v. Massey, 41 Id., 50); for when these judgments were obtained, they at once became a legal lien upon all of the real property of the judgment debtor, except the homestead, situate in the county where the judgments were entered, or in a county where transcripts thereof were filed, from the time of such filing, notwithstanding the fact that the judgment debtor had made what proved to be an abortive attempt to convey away his real estate previous to the recovery of such judgments."
In the case of Ex parte Spragins, 44 S.C. 65;21 S.E., 543, the following from the case of Codwise v. Gelston, 10 Johns. (N.Y.), 522, (opinion by Chancellor Kent) is quoted with approval:
"That if a fund for the payment of debts be created under an order or decree in chancery, and the creditors come in to avail themselves of it, the rule of equity then is that they shall be paid in pari passu, or upon a footing of equality. But when the law gives a priority, equity will not destroy it, and especially where the legal assets are created by statute, as in case of a judgment lien, they remain so, though the creditors be obliged to go into equity for assistance. The legal priority will be protected and preserved in chancery."
The exceptions raising other questions that may not be covered by the foregoing observations have been considered and are without merit. *Page 405 
In reference to the petition of the Nicholson Bank Trust Company it is evident that the order of Judge Townsend allowing it to intervene along with the other petitioner, was made without due notice to the plaintiff. The order, so far as it affects this petitioner, must be reversed without prejudice to a renewal of the petition.
The judgment of the Court is that the order appealed from, except as herein indicated, be affirmed.
MR. CHIEF JUSTICE GARY, and MESSRS. JUSTICES WATTS and MARION concur.