Court Opinion

ID: 8175250
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:20:20.9796+00
Date Added: 2024-06-11T16:39:55.232192
License: Public Domain

McWhoRTER, Pbesident,

(dissenting) :

Powers Taylor Drug Co., and Owen# Minor Drug Co., corporations who sued on behalf of themselves and such other creditors of E. H. Faulconer, as should come in and contribute to the costs of the suit, filed their bill in equity in the circuit court *593of Summers County against E. FT. Faul'eoncr and John H. Jor-don in his own right and as cashier of the Bank of Summers, the Bank of Summers a corporation and Harrison Gwinn and Wade Gwinn, partners as the Gwinn Drug Store; setting up their respective claims, which had been reduced to judgments, against defendant Faulconer, alleging that he had been engaged in the drug business at Hinton and having become involved to the extent of hopeless insolvency and being in debt to the Bank of Summers in the sum of seven hundred and fifty dollars; that said Faulconer was the owner of a stoek of drugs, fixtures, etc., then in his store in the city of Hinton,'of the value of one thousand five hundred dollars, and also was the owner of certain book accounts, notes, claims and demands due and owing to him of the value of $-; that on the 26th day of February, 1900, said Faulconer attempted to sell and transfer the said stock of goods, accounts, claims, etc., to the defendant, John II. Jordon, cashier of the Bank of Summers; that the only consideration paid for said stock of drugs, fixtures, book accounts, claims, etc., by the said Jordon cashier was the payment of a note of .about seven hundred and fifty dollars due the defendant Bank of Summers by said Faul-coner; that the sale of said stock of goods, etc., was made by the said defendant, Faulconer for the purpose and .with the intent to hinder, delay and defraud his creditors, and that the said sale and transfer did delay and defraud said creditors, and especially plaintiffs, and that said defendant, John II. Jordon and John II. Jordon, cashier, of the Bank of Summers and the said bank had notice of th’e fraudulent intent and purpose of the said Faulconer in making said sale and transfer, and' participated in the said fraud by aiding and abetting him; and that said sale and transfer were attempted on the part of the said Faulconer who was then insolvent and whoso insolvency was known to said Jordon and to the bank, • to give preference and priority to the said bank by securing the bank said note of seven hundred and fifty dollars and by such sale and transfer did give the said bank a preference to the exclusion and prejudice of the other creditors; and that the sale and transfer were null and void as to said preference, even if there was no actual fraud in the transaction; that said goods, fixtures, accounts, etc., shall be taken for the benefit of *594all the creditors of Faulconer and applied and paid pro rata upon all his debts or such as should come in and contribute to the cost of the suit; that said stock of drugs, fixtures, etc., were attempted to be sold and transferred without any invoice or any steps being taken to ascertain their true value, and that no consideration, whatever was taken of the value of the said stock, but that the sale and transfer were made solely for the purpose of saving the debt due to the Bank of Summers, to the exclusion and prejudice and in fraud of the rights of the other creditors of said Faulconer, and alleging that said bank and Jordon should be held for the full amount of the value of said stock of drugs, fixtures, book, accounts, claims, notes, demands, etc., that went into .the hands of said Jordon and said Bank of Summers by reason of the attempted sale and transfer. They further alleged that some days after the said sale and transfer the defendants, Jordon and the Bank made sale of the said stock of goods and fixtures to the defendants, Harrison Gwinn and Wade Gwinn, partners as the Gwinn Drug Store, in whose possession said drugs, goods, fixtures, etc., were, and being sold my them; and that said Gwinn Drug Store became the purchaser thereof with full knowledge of the facts and circumstances of the attempted sale and transfer by Faulconer to the defendants Jordan and the Bank of Summers, and prajdng that the attempted sale and transfer be set aside and held for naught as to plaintiffs debts, that the preference given to the Bank of Summers in order to exclude and prejudice the other creditors of said Faulconer be set aside; that the proceeds of1 said sale be proportioned pro rata among all the creditors of said Faulconer, who will contribute to the cost of the suit; that a decree be entered against said Jordon, and the bank for the full amount of the goods, fixtures, accounts, etc., that was received by them by reason of said attempted sale and transfer; that all proper inquiries be made and accounts taken, and for general relief. The defendants, John H. Jordan and Wade Gwinn filed their demurrers; the defendants, Jf H. Jordon, E. N. Faulconer and J. H. Jordon, cashier of the Bank of Summers, filed their separate demurrers and answers in all of which demurrers plaintiffs joined and replied generally to the answer. The demurrers being considered were overruled. John H. Jordon filed his answer as cashier, *595averring that the Bank of Summers was a corporation doing a hanking business in the city of Hinton; that they were then informed that defendant Faulconer was not solvent on February 26, 1900, but that they were not aware of the fact at that time, that the bank was the holder and owner of a note for seven hundred and fifty dollars made by defendant Faulconer, and payable to John AT. Flannagan, J. M. Ayers. AY. H. Sawyers, II. Ewart and James II. Miller and endorsed by them to the bank; that said note was one of a series of renewals of a note given more than a year before and had been curtailed from one thousand dollars to seven hundred and fifty dollars; that said endorsers on said note were perfectly and absolutely solvent on the 26th day of February, 1900, and were still solvent; that said bank did not desire the collection or payment of said note; and that the solvency or insolvency of the defendant Faulconer could not in any way affect said bank and denying that either he as cashier or the bank had any transaction with said Faulconer with respect to the sale or purchase of said property of Faulconer or of any part of it; that after said sale‘was made Faulconer paid said note as they were informed out of the proceeds of said sale; that the said bank nor said Jordon, cashier, had any interest in said sale or any connection therewith or with the application of the proceeds; but admitted that a sale was made to Jordon on his own individual account, but neither said bank nor its officers had any interest or transaction with said Faulconer, and denied emphatically that the only consideration for the property sold was the payment of said note of seven hundred and fifty dollars, but averred that the actual consideration paid, by Jordon in his own name; was one thousand two hundred dollars in cash and the assumption by him of a lien recorded of James AY. Tufts against the soda fountain including the said sale of about one hundred and fifty dollars, and also.of the payment of twenty dollars on account of rents, and denied all fraud or knowledge of fraud in any transaction or .that there was any action or transaction on their part to give preference to any creditor of said Faulconer by which any preference or priority might be secured or the rights of any creditor be prejudiced, or that they were liable in any way for the transaction of said Faulconer or any other person or that said sale and transfer *596were made for tlie purpose of saving tlie debt due by Faulconer to the bank or that the stock of merchandise, drugs, etc., went into the hands of either Jordon, cashier, or the hank, or that either of them sold -or transferred the property to defendants, Gwinns or either of them or to any person. J. H. Jordon in his separate answer denied all allegations of fraud or fraudulent intent or knowledge of fraud and denied all material allegations of the bill; alleged that he bought the goods for one .thousand two hundred dollars cash and assumed the trust debt lien upon the soda fountain due James W. Tufts for one hundred and fifty-six dollars and ten cents; that he borrowed the one thousand two hundred dollars from the Bank of Summers, making his note therefor, which was endorsed by James II. Miller; that out of the one thousand two hundred dollars so borrowed and paid to Faulconer, seven hundred and fifty dollars was paid to the bank at Faulconer’s direction to pay the note for that amount and he also paid execution liens in the hands of constable on said property amounting to about four hundred dollars, which were paid by direction of said Faul-coner, and the residue paid to Faulconer in cash; that said bank had no interest in securing a preference of in buying or attempting to consummate said sale as its debt represented by said note’ was perfectly and absolutely safe and secure as each endorser was solvent and good for the amount thereof; that respondent did not know the financial condition of Faulconer and had no knowledge thereof except to the extent of said liens and debts due to the bank, and when he decided to purchase said stock he examined all of the records to see what if any liens were against the property; that the payment to the bank was not made at the suggestion of respondent as it was not a lien against the property; that after his purchase was made respondent informed II. Gwinn, who acceded thereto, and he and his son Wade came to Ilinton and Gwinn immediately repaid respondent the amount of his cash payment and he turned the business property and stock over to them, tho Gwinns to taire it as of the date of respondent’s purchase of February 26, and of the one thousand two hundred dollars paid by them to him he paid off his note in bank and the business had since the 6th of March, 1900, the date, when Gwinns refunded to him his money been run in the name of Gwinn Drug *597Store; and filed with, his answer the original contract of purchase, and alleged that the purchase was made in the utmost good faith and without any intention of affecting the creditors of said Faulconer by preference or prejudicing in the least any one, and denied that any sale or transfer was made by any person to the Gwinns, except himself. The defendant, Faul-coner in his answer admitted his liability for the claims of the plaintiffs and averred that he intended to pay them as soon as he could; that he had been unfortunate in business and was not able to pay, denied all allegations of fraud or knowledge of fraud contained in said bill; that he became involved with his creditors and was unable to pay them as fast as their claims became due; that a number of judgments were procured against him and executions issued prior to the 26th of February, 1900, and not being able to- meet all his liabilities decided to sell his stock of drugs, went to see Jordon and after considerable negotiation they agreed on the sale and the property was turned over to him, the price paid by Jordon was one thousand two hundred dollars and the assumption of the Tufts debt of one hundred and fifty-six dollars and ten cents secured by lien, which was, as respondent believed, a fair price and considerably more than could have been realized out of the property at forced sale. The sale was made only in the interest, as he conceived, of his creditors; that the debt owing to the bank was not mentioned between them until after the sale was made, then at the instance of respondent tire debt was paid to the bank; that he. desired the bank debt first paid; because when he first went into business he borrowed one thousand dollars, all of which was applied in the payment of the purchase money for the stock and his friends, the endorsers, had endorsed the note to give him a start, and it had been renewed from time to time and curtailed until the balance due on last renewal was seven hundred and fifty dollars; that after the payment of said sum and four hundred dollars to pay off,the liens and executions against said stock, of the one thousand two hundred dollars, there was a balance of twenty-five dollars and ninety-two cents,. all of which he paid out on other debts due by him; denied that Jordon, as cashier, or the bank had anything to do with the said sale so far as he knew; that the sale was made in absolute good faith and without fraud, or fraudulent intention and *598neither Jordon, nor either of the Gwinns had any information of the insolvency or the extent of the indebtedness of respondent ; that there was no contract express or implied between any of the parties to said sale except that contained in the written agreement between Jordon and himself of the 26th of February, and the consideration as therein stated; and denied that the sale was made with the intent to hinder or delay creditors or that said sale and transfer did so hinder and delay and defraud his creditors or either of them; and denied that Jordon or any other person had knowledge of any such intention, as none such existed, or that Jordon or any one else aided or abetted in such transaction or that any one knew that respondent was insolvent at the date of the sale and denied that such sale and transfer was an attempt to give preference and priority to any person or that the sale was made in order to give said bank preference on account of its debt or to save the said- debt to the bank, and alleged that said property was sold to Jordon at a reasonable and fair price and for much more than it would have brought at forced sale under legal process; that after said sale to Jordon the property was turned over to the defendants Gwinns, but of that transfer and the terms thereof respondent was not advised; that he was employed to assist said Wade Gwinn at a salary of fifty dollars per month and the salary was all the interest he had in the business. • The depositions of defendant, H. Gwinn and of R. E. Dunlap, attorney for plaintiffs were taken and filed on behalf of plaintiffs and the depositions of defendants, Faul-coner and Jordon were taken on behalf of defendants and filed in the cause. On the 14th of February, 1901, the defendant, E. E. Faulconer, tendered his petition showing that after the sale of his drug business he had filed his petition in bankruptcy in the District Court of tire United States for the District of West Virginia, and that on the 10th day of September, 1900, he was adjudged a bankrupt; that plaintiffs were included in his petition and scheduled and.had actual notice of the proceedings ; that the debts of plaintiffs were 'such as would be released by a discharge in bankruptcy, and that this suit was founded upon a claim from which a discharge would be a release; and averred that no adjudication or decree could be entered in said chancery cause against him or in any wise affect *599Ms interest until said matters were .adjudicated by the bankruptcy court; and that said suit could not be finally heard and the matters therein determined at that time, and praying that the plaintiffs be made parties to the petition; and that the suit be stayed as provided by the bankruptcy laws and for general relief, to the filing of which petition plaintiffs objected, the objection was overruled and the petition filed and process thereon was waived by the plaintiffs as well as by defendants, Jordon and the bank, and plaintiffs replied generally to the petition and on the same day the cause came on to be heard on the bill and exhibits filed, and the said answers and exhibits and general replication to all the answers, upon the depositions and upon the petition of Faulconer, which was treated as his amended answer, and general replication thereto, and all the proceeding theretofore had and papers read, and the court being of opinion that the sale of the stock of drugs, etc., was made by Faulconer to Jordon with the intent and for the purpose of hindering, delaying and defrauding the creditors of Faul-coner, and that Jordon the purchaser had notice of such fraudulent intent on the part of Faulconer and the sale was for a grossly inadequate consideration, and that the sale and transfer was for the benefit of all of Faulconer’s creditors and that the said Jordon was liable to the creditors of said Faulconer for two thousand five hundred dollars, the full value of said stock of drugs, etc., shown by the invoice made in the sale to H. Gwinn, said Jordon having disposed of the stock of drugs, etc., and decreed that Jordon be held liable to the creditors of Faulconer for the said sum of two thousand five hundred dollars; and that plaintiffs, The Powers Taylor Drug Co., and Owens Minor Drug Co., by reason of the institution of this suit and being the only creditors up to the time who had united in the suit and contributed to the expenses thereof were entitled to the payment of their debts in full and decreed to said Powers Taylor Drug Co., two hundred and four dollars and forty-five cents; to the Owens Minor Drug Co., three hundred and forty-one dollars and seventy-two cents, against said John H. Jordon, with interest from the date of the decree on said siims and the costs of their suits, and execution awarded against Jordon, in favor of the plaintiffs, respectively for said sums and costs, and the cause was referred to a commissioner to *600ascertain the further indebtedness of the said Eaulconer which existed at the time of sale; from which decree the defendants, J. Ii. Jordon, E. N. Eaulconer, H. Gwinn and W. Gwinn appealed. The first assignment of error is in overruling the demurrer to plaintiffs’ bill'; it is claimed by appellants that all lien creditors of Eaulconer were proper and necessary parties 'to the bill. In Hogg’s Eq. Pr., sec. 184, it is said, “In a suit to set aside a conveyance as fraudulent and subject the property embraced therein or so much thereof as is necessary to the plaintiff’s debt, it is not necessary to convene the other creditors of the debtor and ascertain the liens; but the parties directly concerned and connected with the conveyance or interested as grantees or assignees must be before the court in order that full determination of the matter binding all' parties interested may be had in the cause, but further than this the rule does not extend.” State v. Bowen, 38 W. Va. 91; Core v. Cunningham, 27 W. Va. 206; Blubaugh v. Loomis, 48 W. Va. 666; (37 S. E. 794); Pethtel v. McCullough, 49 W. Va. 520; (39 S. E. 199). Appellants cite Hill v. Proctor, 10 W. Va., and Livesay v. Feamsler, 21 W. Va. (pt. 5 Syl). In the first of said causes it is held that “All persons materially interested in the subject of controversy ought to be made parties in equity, and if they are not the defect may be taken advantage of, either by demurrer or by the court at the hearing.” ■ This was a suit to enforce the specific performance of a contract of sale of real estate against the heirs of Joseph C. Kendall, when parties who claimed an interest in the land were not made parties and who were necessary parties to the suit in order that the rights of all might be adjudicated therein. The ease of Livesay v. Feamster was a suit brought by a judgment creditor to enforce his judgment lien, where it was held that he should have made formal defendants to his suit all creditors who had obtained judgments against the debtor in the courts in the county wherein the lands were situated,' which he sought to subject to his judgment.
James W. Tufts who had the trust deed on the soda fountain, it is claimed was a necessary party; but his interest could not be affected by anything done in the suit, and Jordon, the purchaser of the goods had assumed the payment of his claim and the list of execution lien creditors filed with the demurrer *601of the Gwinns, had been paid off by Jordon at the direction of Daulconer and they had no interest in the suit. The second assignment is that after overruling the demurrer of the Gwinns it was error to decree on the merits of the cause; that a rule should have been awarded against them to answer the bill. The decree is simply a personal decree against John H. Jordon who had answered the bill and the rights and interests of the Gwinns were in no way affected by the decree, see. 30, ch. 125, Code, 1899, requiring'a rule against the defendant to answer the bill after his demurrer is overruled, can only apply to a defendant whose interest will be affected by the decree. The defendant Jordon is the only party whose interests are in any way affected by the decree, and he was in no wise prejudiced by failure to award a rule against the Gwinns to answer, hence he can not complain; and it is insisted by the appellees that the Gwinns not in any manner being affected by the decree thp same being in no wise prejudicial to their interest or rights the appeal should be dismissed as to them. Moran v. Clark, 30 W. Va. 358, (Syl.upt. 7), “The Appellate Court will not reverse a decree unless it is to the prejudice of the appellant” and if a failure to award the rule against the Gwinns was error, not being prejudicial to any of the appellants it would not be cause for reversal of the decree. Clark v. Johnson, 15 W. Va. 804 (Syl.), “It is not sufficient to reverse a decree that there is error in it, the .error must be prejudicial to the appellant or it will not be reversed on his application.” The appeal should be dismissed as to the defendants, Gwinns.
The third assignment of error is in holding the sale to Jor-don by Faulconer to have been with intent to hinder, delay and defraud the creditors of Fanlconer. It is true defendant Jordon in his answer denies all the allegations of fraud; but he knew of the failing financial condition of defendant Daul-coner, he knew that he was largely in debt; Daulconer had gone to him and told him his circumstances; that there were judgments against him up tlic-re in court, “That these people were pushing me and if it was about to be sold that the price would not amount to anything and that if I could sell I would rather do it. And Mr. Jordon said he was authorized to invest one thousand two hundred dollars by Mr. Gwinn, and T knew that would be more than I could get if it was sold.” *602It is difficult to determine from the answer of Jordon whether he bought the property for himself or for Gwinn. He says that when ho learned that Fauleoner desired to sell he communicated with Gwinn by telephone, who was absent, sick, and Gwinn directed him to go ahead and make the purchase; that after a careful inspection of the property he purchased the entire stock and property for one thousand two hundred dollars, cash, and assumed the Tufts lien for one hundred and fifty-six dollars and ten cents; he says Gwinn not being able to be present respondent made the purchase in his own name; that after the purchase was made he informed H. Gwinn who acceded thereto' and immediately thereafter Gwinn repaid respondent the amount of his cash payment and he turned the business, property and stock over to the Gwinns who took it as of the date of his purchase. In his deposition he states that after making an investigation and figuring on what Fauleoner actually had there he made the purchase without airy actual inventory; says he never had any experience in the drug business before this transaction; that he tookn business man’s precaution in looking after the debts and liens against the stock and had an inventory taken of the stock after the purchase and before he sold, but did not remember exactly what the invoice amounted to nor the definite value that was placed on the stock as to the invoice. The Gwinns gave him their note for one thousand two hundred and fifty dollars, and asked him to remain or retain an interest in the business for a while. While Jordon claims that he did not know the extent of the indebtedness of Fanlconer he must have known that he was at the time insolvent. Fauleoner admits that at the time he was insolvent, and Jordon 'says that he looked after the debts and liens against the stock. Positive proof to establish a fraud is not required. In Richardson v. Ralphsnyder, 40 W. Va. 15 (Syl. pt. 1), it is held: “Tn showing the fraud necessary to impeach a conveyance, the fraudulent intent of the parties may be shown by the-circumstances attending the transaction. Circumstantial evidence is not only sufficient, but is often the only evidence that can be adduced.” Goshorn v. Snodgrass, 17 W. Va. 717; and Bump on Fraild. Con., sec. 184. “It is not necessary that the grantee shall have actual knowledge of the debtor’s intent to delay, hinder, or defraud his creditors in *603order to render the transfer void. A knowledge of facts sufficient to excite the suspicion of a prudent man and to put bim on the inquiry, or to lead a person of ordinary perception to infer fraud, or the means of knowing by tlic use of ordinary diligence, amounts to notice and is equivalent to' actual knowledge in contemplation of law. The nature and circumstances of the transaction may sometimes be such as must apprise the grantee of its character and object. Things speak for themselves. If he has notice of facts sufficient to put him on the inquiry, he can not be deemed a bona fide purchaser;” and in section -19-1-, “The notice of the fraud need only be sufficient to put a man of ordinary prudence and experience in business transactions upon the inquiry;” and section 379, Wait on Fraud. Con.; Shealy v. Edwards, 75 Ala. 411; Temple v. Smith, 13 Neb. 513. While it is a fact that both Jordon and Faulconer say that Jordon did not know the extent of Faul-eoner’s indebtedness yet he was told by Faulconer that debts were pushing him and that he was likely to be sold out, which was certainly enough to put Jordon upon his inquiry and it docs not appear that he even pursued such inquiry beyond the execution creditors; did not even seek to learn from Faulconer whether he had further indebtedness, but only seemed desirous to find what claims were liens upon the property he was purchasing. It was his duty at least to have had such information as Faulconer was able to give him in relation to his indebtedness. He purchased all the property of which Faulconer was possessed. The sale by a debtor who is seriously involved of the whole of his property has been held to- create a violent prm sumption of a fraudulent intent so far as existing creditors were concerned. See Wait on Fraud. Con., sec. 231 and cases there cited.
In Butler v. Thompson, 45 W. Va. 660 (Syl. pt. 2), it is held: “Conveyance made by a party of his entire property during the pendency of a suit brought to recover judgments against him on a debt is a badge of fraud.” The transfer of a debtor’s propeity during the pendency of a suit, or when he is expecting to be sued and pressed on his debts is a badge of fraud. As stated in section 50, Bump on Fraud. Con: “Because a transfer tends to deprive the creditor of the means of enforcing- his judgment when he obtains it. If an attorney *604wlio bolds a claim for collection is induced to' delay the insti-tuiton of a suit at the request of the debtor who thereupon takes advantage of the delay to make a conveyance, this is a badge of fraud the same as after the suit were actually pending,” and cases cited. Several days prior to the sale by Faul-coner attorneys for plaintiff, the Owens Minor Drug Co., had been pressing Faulconer for a settlement and payment and he had been putting them off from day to day and asking them to delay proceedings, which they did at his instance, and taking advantage of their leniency conveyed his property before they brought their suit. “The circumstance of looseness in determining the value of the property conveyed, as when a purchaser buys a stock of merchandise without taking an inventory of its value though it does not render the sale void per se is a badge of fraud.” . 14 A & E., E. L. (2d ed.) 516 ; Moore v. Roe, 35 N. J. Eq. 90. It seems that Jordon purchased without knowing anything about the accounts due to Faulconer, did not even look into them, being well acquainted with the people of Hinton and vicinity and occupying a position, cashier of the bank, which made it his business to know the financial condition of the people, he could have arrived at a fair estimate of their value bj7 an examination of them; but he contented himself with a very cursory examination of the stock of drugs about which he knew nothing, never having had any experience in the business and'was unable to speak of the value of the accounts purchased by him, only he said Faulconer esimated them at from one thousand dollars to two thousand dollars. In Livesay v. Beard, 22 W. Va. 585 (Syl. pt. 5), it is held: "Where the facts and circumstances in any case are such as to make a prima facia case of fraudulent in-rent, they are to be taken as conclusive evidence of such intent, unless rebutted by other facts and circumstances in the case;” and point 7, “Where a debtor in failing circumstances conveys property for a grossly inadequate consideration that is evidence of fraudulent intent.” It is clear that Jordon pur- ' chased at. much loss than the value of the property purchased; that he knew Faulconer’s .failing financial condition, and that he knew that he was not paying an adequate price and that he was getting all the property Faulconer had, and that Faul-coner was selling to keep his property from being taken to pay *605his debts, which were pressing him by the plaintiffs, especially the Owens Minor Drug Co. The evidence as to the actual value of the property so sold and conveyed is not very clear, II. Gwinn testified he thinks that they told him that the invoice was something over tro thousand dollars, then says the stock Avas estimated at two thousand five hundred dollars, which included all the old accounts due Faulconer, good and bad. Faulconer put a much lower estimate upon it, but gives no definite figures, but thought it would not bring one thous- and two hundred dollars at forced sale; the evidence does not show clearly what the stock invoiced when, an inventory was made by Jordon some days after his purchase from Faulconer, for the purpose of his sale to Gwinn, when he sold one-half interest to Gwinn for one thousand two hundred and fifty dollars and retained a half interest himself. The presumption is that Jordon sold by the invoice. The price he sold for is not material, except as it may tend to prove the value of the stock which he purchased from Faulconer. Jordon said he asked Faulconer what estimate he put on his stock and he said he thought he had sixteen or eighteen hundred dollars in the store; this augmented by the value of the accounts estimated at from one thousand dollars to one thousand five hundred dollars or two thousand dollars would run it up to fully two thousand five hundred dollars.
The fourth assignment of error is that the court erred in holding said sale and transfer to Jordon as made with intent to hinder, delay and defraud the creditors of Faulconer, and at the same time decreeing that the sale was for the benfefit of all the creditors of Faulconer and referring the cause to a commissioner, and the fifth assignment as follows: “The epurt erred in holding J. II. Jordon, the purchaser, liable to the creditors of E. N. Faulconer for the sum of two thousand five hundred dollar’s, when the proof shows that the ¡stock ©? goods, fixtures, etc., only sold for one thousand three. hundred and seventy-six dollars. The court in fixing the value of the same arbitrarily and wrongfully adopted this valuation. The only proof in evidence of the value of said stock, etc., is the sworn deposition of E. N. Faulconer, that the sum paid by Jordon was more than the stock would have'brought at a forced sale. Because Jordon in subsequently selling at an advance to Gwinn, *606mad© a profit oar his transaction is no reason why the court should arbitrarily fix the value of the stock at this figure/’ may be treated together. The court having adjudged the sale and transfer to be fraudulent it was error to refer the cause to a commissioner to ascertain the various creditors of defendant E. N. Faulconer, and the amount due each at the date of the sale, no other creditors other than the plaintiff’s having appeared to sot up their claims and assume their proportion of the costs in the proceeding to set aside the sale as fraudulent. As we have hereinbeforo shown it was not necessary to convene the other creditors of the debtor. The sworn, deposition of E. N. Faulconer as we have seen is not by any means “The only proof in evidence of the value of said stock, etc.” In Vance Shoe Co. v. Haught, 41 W. Va. 275 (Syl. pt. 4), it is held: “Where a fraudulent purchaser yet owns the property, the creditor must subject it, and can not take a personal, money decree for his debt, or the value of the property, against the purchaser, but if the fraudulent purchaser has sold the property to a bona fide purchaser, so that it can not be reached, the creditor may have a money decree against the fraudulent purchaser for the amount he received for the property, or if that be less than its actual value, tiren for such value; and, if the bond 'fide, purchaser yet owes for the property, the money in his hands may be followed, and subjected in his hands.” Hinton v. Ellis, 27 W. Va. 422. The decree in favor of tire plaintiff for the full amount found due them respectively was proper but the money decree for two thousand five hundred dollars against Jordon was error. He could be held liable in such suit only for the debts represented therein. The sixth, seventh, and eighth assignments are to the same effect, that is, that the court erred in holding said sale to be a preference operating for the benefit of all the creditors of Faulconer without allowing Jordon preference for the cash payments made by him for the stock, and refusing to substitute Jordon, the purchaser, to the prior liens by execution which he had paid off and which were listed in tire deposition of Faulconer and according Jordon the priority thereof, and in not giving him a preference over the general creditors for the bank debt of seven hundred and fifty dollars and the. other debts paid by him. In Bank v. Wilson, 25 W. Va. 243, it is held: *607That if a deed be set aside as fraudulent and void, as to creditors, because made with intent to hinder, delay and defraud such creditors and a part of the consideration of such deed was the satisfaction of a bona fide, debt duo from the grantor to grantee, such fraudulent grantee is not entitled to charge the land thereby attempted to be conveyed with the amount of such debt. Goshorn v. Snodgrass, 17 W. Va. 717; Webb v. Ingham, 29 W. Va. 389; Livesay v. Beard, 22 W. Va. 585: Hoggs Eq. Pr., sec 198; Spencer v. Smith, 34 W. Va. 697 (12 S. E. 28); Clark v. Gordon, 25 W. Va. 735 (14 S. E. 255); and as to the substitution see Bates v. Swiger, 40 W. Va. 420; Sheld on Subs, see. 44; Railroad Co. v. Soutler, 13 Wall 517. The ninth assignment is that the court erred in not sustaining the exceptions of defendants to the deposition of R. E. Dunlap. It does not appear from the record that these exceptions were either called to the attention of, or passed upon by the court. In Vanscoy v. Stinchcomb, 29 W. Va. 263 (Syl. pt. 2), “Exceptions to a deposition (except upon the ground of incompetency, when no exception is necessary), if-not brought to the notice of the court below or passed upon by that court, should be considered by the appellate court as having been waived, and a general decree against the party making the exception cannot be considered as involving a decision upon the exception.” Fant v. Miller, 17 Grat 187; Hill v. Proctor, 10 W. Va. 59.
The tenth assignment of error in decreeing against Jordon personally for the entire debts due the plaintiffs without ascertaining what amount would be distributable on said debts pro rata between them after allowing Jordon preference for the money paid out by him on the liens, debts, etc., is not well taken for the reasons stated on former assignments. The-eleventh assignment that the court erred in entering any decree whatever, in the cause after learning of Eaulconer’s adjudication in bankruptcy and because Eaulconer’s trustee in bankruptcy was not before the court and because from Eaul-coner’s petition filed before final decree it was shown that the plaintiff’s debts were included in the said bankrupt schedule in the bankruptcy proceedings. There is nothing in the record to show the bankruptcy proceedings claimed by defendant Eauleoner, except the petition itself, which is not sworn to^ *608and is not accompanied by any evidence of tlie filing of tbe petition in bankruptcy; nor of tlie adjudication of the bankruptcy of petitioner. The allegations of the petition are denied by the general replication of the plaintiff and there is nothing to support the petition. In Howes v. Holmes, 81 Mo. App. 81 (Syl. pt. 2), it is held: “An adjudication of bankruptcy will not compel a stay of proceedings in a suit against the bankrupt in a state court upon motion and production of a certificate of adjudication.” And in which case it is said in the opinion of the court, “Nothing in the bankrupt law operates to oust this court of its jurisdiction already acquired in the absence of a restraining order from the bankrupt court.” For the foregoing reasons the decree of February 14, 1901, should be reversed in so far as it decrees Jordon liable for two thousand five hundred dollars to the creditors of E. N. Faul-coner and refers the cause to a commissioner for report, and in all other respects it should be affirmed.