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55 W. Va. 586

Feely v. Bryan

West Virginia Supreme Court

Decided April 1, 1904

West Virginia Supreme Court · decided 1904-04-01

<p>1. Mortgage.</p> <p>Any writing charging a debt on property, though not a formal mortgage, is an equitable mortgage or lien. (p. 587.)</p> <p>2. Mortgage After Loan — Preference.</p> <p>Under section 2, chapter 74, Code 1899, if one lend money to a solvent person, with the agreement that a mortgage is to be made on certain property to secure loan, and later, when insolvent, the borrower makes the mortgage it is not a good preference as to other debts existing at the date of the mortgage, (p. 588.)</p> <p>3. Transfer. — Insolvent Debtor.</p> <p>A transfer or chárge by an insolvent debtor, free from actual fraudulent intent as to creditors, preferring a particular debt is not, as to debts contracted after its recordation, a preference contrary to section 2, chapter 74, Code 1899. (p. 589.)</p> <p>4. Insolvent Debtor.</p> <p>In a suit to impeach a preference made contrary to section 2, chapter 74, Code 1899, any creditor filing his demand for allowance before a commissioner under a reference to ascertain the insolvent’s debts, thereby unites in the attack upon the unlawful preference, and is entitled to share in the insolvent’s estate, (p. 589.)</p> <p>5. Insolvent Debtor.</p> <p>Several creditors, with separate demands, attack a mortgage as a preference condemned by section 2, chapter 74, Code 1899, and a decree adjudges the property to be for the benefit of all the insolvent’s creditors, and decrees out of it particular sums to the several creditors. These sums cannot be added to give jurisdiction to the Supreme Court for an appeal by the creditor preferred by such mortgage, (p. 590.)</p>

Relies on Freeman v. Dawson · Ex parte Baltimore & Ohio Railroad · Hicks v. Roanoke Brick Co.

Good law ✅— No negative treatment on recordhow we know

Dismissed, · Decided 1904-04-01

How this case has been cited

Cited by 7 later decisions — most recently December 1948

3 federal appellate · 3 state decisions

4019041910192019301940decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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¶1ON REHEARING.

¶2Upon rehearing the question of jurisdiction for this appeal has been carefully reconsidered; but we are unable to change the decision that there is no jurisdiction for the appeal.

¶3Feely’s attorney seems to admit that if the litigation is not one between Feely and Bryan, .there is no jurisdiction, and he therefore seeks to sustain the position that the contest is only between them, not one between the creditors of Bryan; and as- • suming this premise he would apply the ordinary rule between plaintiff and defendant in money demand, in other words between Feely, creditor, and Bryan, debtor, and say that it is the amount claimed by a plaintiff creditor against a defendant debtor which gives jurisdiction, not what the plaintiff recovers. But this premise is not correct. This is not a suit between Feely and Bryan. Bryan makes no contention against Feely; there is no issue between them. The contest is purely one between conflicting creditors of Bryan. They fight for the bone. Some of those creditors levied executions on the chattels on which Feely claimed a mortgage, and he filed an injunction against those executions based on his mortgage, and those creditors answer and seek to defeat the mortgage, or at least defeat its preference of Feely’s debt and get their proportions. This shows it to be a litigation between creditors.

¶4I think the authorities cited in the first opinion ample to deny jurisdiction; but I will add some further ones. A boat of the B. & O. B. E. Co. collided with a barge, and the owners of the barge and its cargo sued the boat, and one sum was decreed the owner of the barge, another to the owner of the cargo. The court held that the owner of the boat could not add th’e two recoveries for jurisdiction. Ex parte B. & O. Co., 106 U. S. 5. The distinction between cases where there may and may not be aggregation of sums for jurisdiction is drawn in that case. Suppose any one of the creditors in this case had been denied his debt. He could not appeal. Neither could his adversary. The right ought to be mutual. 2 Cyc. 566; Tupper v. Wise, 110 U. S. 398; Hawley v. Fairbanks, 108 Id. 544.

¶5*594In 2 Cyc. 569., we find that Where several claim under the «ame title, the validity of which title is necessarily involved, "the appellate court will have jurisdiction, notwithstanding the .individual claim of no one of the plaintiff’s exceed the juris--dietional amount, if the whole amount involved is sufficient.” 'That does not apply in this case. That is where.the plaintiffs ■under a common or collective right sue, as in the case of dis-tributees suing for their portion of the personal estate of a •decedent. Shield v. Thomas, 17 Howard 3. Where there is-'.a common demand by several by one and the same title, and the sum recovered goes according to their several rights in distribution, and the adverse party is not interested in the distribution, that is the case. But does that apply to a case where •different persons are claiming different debts on different .grounds, each of them being adverse to the party on a several .ground? “Where several plaintiffs claim under the same title, .and the determination of the cause involves the validity of that title, and the whole amount exceeds $5,000.00, this court has .jurisdiction, as to all such plaintiffs, though the claim of none ■exceeds $5,000.00; but where the matters in dispute are separate and distinct, and are joined in one suit for convenience •or economy, the rule is the reverse as to claims not exceeding $5,000.00.” N. O. Pacific v. Parker, 143 U. S. 42. In the case of preferences our statute, for convenience and economy to end •all claims in one suit, allows different creditors to use one suit for relief, however diverse their claims may be; but that is matter of remedy, and does not show that they claim under one and the same title. In this case the debts were separate, not born of and supported by a common title. The creditors claimed against and over Feely’s mortgage. That mortgage did not originate or sustain their rights. And does not Fleshman v. Fleshman, 34 W. Va. 342, stand contrary to the above citation from 2 Cyc.?

¶6In this case each creditor’s debt aggrieved Feely only to its amount, and that too separately; each creditor took from the fund only his amount. Feely does lose more than a hundred dollars. So does the judgment debtor lose his land when divers judgments, each under one hundred dollars, are decreed against it. So the party charged to be a fraudulent vendee. He could not aggregate the debts decreed against him. If he has an appeal it is not on account of amount, but because the case in*595volves title to land. If there be a suit to annul a fraudulent 'conveyance and divers debts are decreed, and one creditor appeals and succeeds in reversal, it does not effect the decree as to other creditors not appealing, because they are separate debts. In this case the sums decreed to the creditors were not decreed ■collectively, or because of a common right. Some cases may be found to the contrary. We do not see that Hix v. Roanoke, 94 Va. 741, is. That was an appeal by a trustee representing a fund. The -whole was in him, though afterwards to be distributed. Freeman v. Dawson, 110 U. S. 264. The case of Winchester v. Colfelt, 27 Grat. 690, adds the amounts decreed against the ■debtor for jurisdiction; but in the later case of Williams v. Clark, 93 Va. 690, the opinion, whilst following that case, condemns it as unsound and approves Schwed v. Smith, 106 IJ. S. 188, cited in the first opinion.

¶7Dismissed.

DeNT, Judge,

¶8.(dissenting):

¶9The question in controversy here and in the circuit court, between Feely and the defendants was as to whether Feely’s debt of $1,100.00 was entitled to priority over the other debts against the estate of S. J. Bryan. As to the amount and validity of the several debts, there was no question and there was no controversy in regard thereto. The defendants, however, attacked the plaintiff's deed of trust as a fraudulent preference under sec-ticfn 2, chapter 74 of the Code. The circuit court so held and the plaintiff appeals.

¶10Said section 2 provides that such fradulent preference “shall be taken to be for the benefit of all creditors, of such debter,” thus making it a common source of title to all of them.

¶11In the 1st Bn. Plead & Pract. 721, the law is properly stated to be “where several parties sue jointly for the recovery of money or property claiming under one common right, and the adverse party is wholly unaffected by the manner in which it may be apportioned in case of recovery, it is the aggregate sum of their several claims which determines the amount in controversy.”

¶12In the present case Feely is wholly unaffected by the manner in which the fund is proporitioned among the creditors in case he is defeated. He claims the whole thereof by virtue of his-*596trust deed and they claim Ms trust deed is a fraudulent preference as to them, and they under the statute- are entitled to the-common benefit thereof. The statute permits and compels them to sue jointly not as a matter of convenience, but because it confers upon them a common' benefit and a joint interest. A. creditor may not sue separately to get the benefit of a fraudulent preference, as he may sue to set aside a fraudulent conveyance, but his suit is for the common or joint benefit of all creditors. The validity of the preference is the joint matter of controversy,, and in so far as the person preferred is concerned, is the amount of his lien, and so far as the other dr attacking creditors are-concerned, is the joint amount of their debts’ if they are less-than sufficient to-cover such preference, and if more than sufficient, then the preference determines the amount in controversy. The true rule is laid down in 2 Cyc. 569.

¶13“Where several claim under the same title, the validity of' which title is necessarily involved in the determination of the cause, the Appellate Court will have jurisdiction notwithstanding the individual claim of no one of the plaintiffs exceeds the jurisdictional amount, if the whole amount involved is sufficient. And if the appellees right to sue and stand in judgment against appellants on a contract, by the terms of which contract more than the jurisdictional amount is involved, is denied by appellants, this constitutes the matter in dispute.”

¶14“And where the amount decreed against appellant consists of several sums in favor of various appellees, no one of which sums would come within the jurisdictional amount, and the aggregate1 of which amount is in excess of the jurisdictional limit, it is held the defendant may appeal.”

¶15The amount in controversy here is undoubtedly the amount of Feely’s preferred lien, its validity as a preference being assailed by those who are jointly interested in its overthrow, and who if they succeed, are entitled to share in it as a common source of title. The statute does not avoid it but holds it to be for the joint benefit of all the creditors. Keener v. O'Neil, 39 W. Va. 515; Argand Refining Company v. Quinn, 39 W. Va. 535; Wolf v. McGugin, 37 W. Va. 552.

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