In re Major
Opinion of the Court
Samuel B. Major filed his petition in bankruptcy on the 1st of September, 186S, and was duly adjudicated as a bankrupt. He surrendered personal estate, and between six and seven hundred acres of real estate capable of being sold in separate tracts. There were judgments against him as principal and surety binding as liens upon his real estate to the amount of more than ten thousand dollars, due to some ten or twelve lien creditors. He had made, in May, 1868, a deed of trust for the general benefit of his creditors conveying to a trustee all his estate, worth not more than six thousand dollars. In due course of proceedings Walter W. Wood was chosen his assignee, but gave no bond as such. Elisha Barksdale was at the time and continued to be the law partner of Wr. W. Wood, and acted as counsel for the assignee in the progress of the cause. On the 12th of January, 1869, this assignee filed a petition in this court setting forth that certain judgments had been obtained against the bankrupt, some of them at dates longer than four months before the petition in bankruptcy, others within the period of four months, making no mention of judgments which had been taken against the bankrupt as surety, and setting forth the execution of the deed of trust of May, 1868, by the bankrupt. He prayed that as this deed had been executed within four months before the bankruptcy, and as certain judgments had been also obtained within that period, the same might be declared null and void; that E. B. Jeffries, the trustee in the said deed, be required to convey to himself, the assignee, the property covered by the said trust deed, and that he might have an order of court for the sale of the real estate of the bankrupt free of all incumbrances. On the same day on which this petition was filed, without notice to the trustee, Jeffries, or to any or either of the lien creditors, the then judge of this court signed an order directing Jeffries, the trustee, to convey to the assignee the property embraced in the trust deed, and directing the assignee to make sale of the real estate thus implicated, free of liens and of all incumbrances except the contingent right of dower of the bankrupt’s wife. No account of liens or incumbrances had been taken or of their priorities at that time. The assignee in pursuance of this decree, on April 7th, 18C9, sold all the real estate in question, and his
There were various proceedings from time to time in after years against the assignee, charging and implying default or misapplication as to funds in his hands, and especially as to the purchase-money of the land he had sold. These proceedings resulted in the removal of Wood as assignee, and the substitution of W. H. Allderdice in his stead. On the 10th of March, 1873, the new assignee, Allderdice, filed his petition alleging that although four years had elapsed, the purchasers of the several tracts of real estate from Wood, his predecessor, had not paid the purchase-money due by them and had all the time remained in possession of the land they had claimed to purchase without paying rent, and asking authority to resell. These allegations were afterwards shown not to be true as to one of the purchasers, J. M. Carring-ton, of one of the tracts. On the same day on which this petition of Allderdice for a resale was filed, its prayer was granted, and a resale ordered without notice to any one. Confining the remainder of this recital of facts to the three hundred and one acres which had been purchased by Barksdale: A resale was not made under this order. On the 12th of November, 1873, on the “application” of J. J. Hill, by attorney, and of C. H. Cabaniss, executor of Samuel Carter, whose judgment liens had priority of others in the funds arising from the sale of the bankrupt’s lands, another order was made for resale. No notice or rule had been served upon other lien creditors, or upon purchasers under the order of 12th January, 1869, and under the sale of 7th April, 18G9, of this “application,” which must have been made orally to the court. Under this order, maoe on the 12th November, 1873, the assignee, Allderdice, made sale, on the 12th December, 1873, of three hundred and one acres in question, and made report of the sale on the 18th February, 1S74. But this report, filed on the day last named, embraced a note by the assignee, which stated that although this land had been cried out to W. V. B. Moore, yet that Moore having failed to comply with the terms of the resale, one M. Palmer had agreed to take the land at Moore’s bid, and that the assignee therefore had contracted with him, and he now reported his sale as having been made to M. Palmer. On the 3d of December, 1873, an order was obtained from Judge Underwood, by E. Barksdale, setting aside the order “entered on the 11th day of November, 1873,” meaning doubtless the order made on the 12th of November, 1873. This last-named order was made in advance of the sale made by Allderdice on the 12th December, 1873. Tt is in the handwriting of E. Barksdale, was signed “John C. Underwood,” and must have been personally held by E. Barksdale, as it was not filed in the record of this cause until the 20th of January, 1874, until which filing it had no validity; and, of course, the sale made by the as-signee on the 12th December, 1873, was made in ignorance of its existence. Judge Underwood died in the latter part of December. 1873, and this cause came before the present judge of this court with the record showing the first assignee to have been removed for having been largely in default, and incumbered with the illegal and futile orders and reports of sale which have been described. The matter of the 301 acre tract of land had been further complicated by the first purchaser, E. Barksdale, having delivered possession of the tract, under what they believed to be a purchase from him, to two of his nieces, and by one of the nieces having intermarried with W. Y. B. Moore. It seems that the judgment of J. J. Hill, one of the lien creditors, was settled in part out of the sale which had been made of another part of the bankrupt’s land to J. M. Carrington. But neither from the sale to Barksdale, nor from that. to Talmer, was the judgment lien in favor of Carter’s estate satisfied, in whole or part.
Such being the position of affairs, the present judge of this court, on the 12th of March, 1874, made an order, on motion of Allderdice, the assignee, consented to by E. Barksdale, purchaser under the illegal sale of 7th April, 18G9, and by M. Palmer, purchaser under the illegal sale of 12th December, 1873, and by C. H. Cabaniss, the representative of Carter’s estate, for a resale of the 301 acre tract of land. By this order W. B. Barksdale was, at the suggestion of E. Barksdale, who was his father, appointed a commissioner to make the sale. Commissioner Barksdale made the sale on the 25th July, 1S74, at which Andrew Easly and others became purchasers at the price of 825S0.G0, and reported his sale on the 5th August following. By supplemental reports, the last of which was filed on the 6th of April, 1876, he reported all the deferred payments for the land to have
From the extraordinary mass of matter, a .great deal of it irrelevant, which incumbers the record of this case, I have eliminated the foregoing statement of such facts as control me in my decision on the questions presented. There may be some inaccuracies of detail in the statement, but none that can affect the judgment I am required to give on the leading facts thus evolved and set forth. It is useless to say what must appear self-evident, that the sale to Barksdale of January, 18G0, was wholly illegal, null, and void, as to all the parties to the order of court under which it was made. As to lien creditors without notice the order of court by which the sale was directed was illegal, null, and void, not only in authorizing the sale itself, but as to most of its other provisions. It cannot be countenanced for a moment in a.court of justice in bar of, or in any manner to prejudice, the rights of lien creditors without notice. As against such lien creditors the purchaser under the sale, E. Barksdale, has no title under it whatever, not even an equitable title; because he was in fiduciary relations as counsel of the as-signee, Wood, to ¿he trust with which the assignee was clothed. Nor is the case of the Misses Barksdale any better, however much they may really suffer by the sale being treated as null and void. The evidence shows that they actually paid E. Barksdale no money, but that he sought to pass off this land to them for a debt he had previously owed them. This debt, whatever it might have been, remains due from him to them now as fully as on the day on which they entered upon the land. On losing the land they are placed precisely where they stood before. Their claim against E. Barks-dale is just where it was, and they have no 'right, either legal or equitable, to call upon the court to make good a debt due to them from E. Barksdale with land or its proceeds to which E. Barksdale has neither a legal nor an equitable right, and which the court itself has no power to divert from those to whom the land or its proceeds is legally and equitably due.
The sale to M. Palmer of 12th of December, 1S73, was equally illegal, null, and void, as to all but the representatives of the liens of Hill and of Carter’s estate. The former purchaser had no notice of the order under which it had been made, nor had any other lien creditor of the bankrupt. It is true that inasmuch as the judgment in favor of Carter’s estate consumes all the proceeds of sale, it is not likely that any creditor later in priority would be disposed to impeach the sale; but non constat, that some subsequent creditor might have bid enough at the sale to afford him a surplus if he had had notice, and the court would on motion of any such creditor have set aside the sale because made without notice to him. E. Barksdale, too, having been a purchaser under an order of sale made by the court, and having had no notice of the “application” on which the sale of the 12th December, 1S73, to Palmer was made, had a right to an order setting
Upon a full and careful consideration of the evidence, notes of argument, reports of commissioners, and exceptions to the latter, which were submitted to me in November last, I made up the decree which was entered in this cause on the 19th of December. Upon as careful consideration of the case now, and of the papers subsequently filed, the evidence subsequently taken, and the notes of argument and oral arguments since submitted, I see no cause except in one particular to vary that decree in any material respect, and will not do so. As to the claim of Barksdale that Carter's executor can make his debt out of some other estate, that was the excuse made by W. W. Wood some six years ago when he was first called upon to account for moneys in his hands by this executor.' It cannot be denied that where a creditor has two sources from which to recover a debt, he may elect the one from which to receive his debt. In this case it seems that the other recourse has produced nothing for six years; and this court can safely concede to this executor the right to make his money here. If hereafter the other resource should yield the fund, the assignee here may justly claim to be subro-gated there to the rights of Carter’s executor, and will be instructed to do so by this court. I do not think that this court should be required to pass upon the respective rights of persons to whom the distributees of Carter’s estate may have assigned their interests in the judgment against Major’s estate, and itself distribute this fund among them. That is more properly within the jurisdiction of the probate court, of which Carter’s executor is an officer. But as it seems pretty clear that half that judgment belongs to E. Barks-dale, who has deposited $1000 of the $1725.73 in his son’s hands in bank to the credit of this court, in that respect and that alone I will modify the order of 19th December, 1870. As to whether the purchase of one-half of this judgment by Cabaniss, the executor of Carter’s estate, and the purchase of the other half by E. Barksdale, were transactions •which this court should or should not condemn, it will be time enough for it to pass its judgment when some one of the distrib-utees, who would be the persons really aggrieved by those transactions, shall appeal to it for redress. I will sign an order dismissing the petition for review; and as to the petition filed on the 22d of December, 187G, revoking the order of that date, but discharging Commissioner W. It. Barksdale for the present from the duty of depositing to the credit of the court the $725.73 remaining in his hands, provided that security in some form be given by him that it will be held subject to any future requisition of the court.
Affirmed by the chief justice, on petition for revision.
Reference
- Full Case Name
- In re MAJOR. Ex parte CARTER'S EX'R. Ex parte MOORE
- Status
- Published