Opinion
03-13-1818
Williamson and Others v. Bowie and Others
Nicholas for the appellants. Call and Wickham for the appellees.
[Syllabus Material]
On the 9th of December 1799, Washington Bowie, a Citizen and resident of the State of Maryland, sued out of the Clerk's office of Fairfax County in Virginia, a Writ of subpoena and Attachment in Chancery against William B. Magruder and Thomas L. Washington, Merchants and partners trading under the firm and style of William B. Magruder & Co., (both of whom were inhabitants of Maryland,) and William H. Washington and John Luke residents of the said County of Fairfax, defendants; which writ was endorsed, " to stop the debts and effects of the defendants Magruder and Washington in the hands of the defendants William H. Washington and John Luke, to satisfy a debt due from them to the plaintiff." The Sheriff's return was, " Executed on John Luke, December 9th, 1799." " Executed on William H. Washington 18th January 1800: --the others not found."
On the 21st of December 1799, a Deed of assignment was executed by William B. Magruder and Thomas L. Washington to David Williamson and others, trustees on behalf of themselves and others creditors of the said Magruder and Washington; purporting to convey and transfer to the said trustees, for certain uses and purposes therein mentioned, " all and singular the goods, wares, merchandize, sea vessels of every kind, either in ports or at sea, with their tackle, apparel and furniture, with the cargoes to them respectively belonging, and all debts, sum and sums of money, due, owing and belonging to the said William B. Magruder and Thomas L. Washington, and all their property whatsoever of every kind, which belongs to them in partnership, and all securities had, made or obtained for the same, whether by bond, bill, note or in any other manner whatsoever, together with all Books of Accounts of the said partnership, and necessary papers and vouchers relating to the same, and all the right, title, interest, claim and demand whatsoever, of them the said William B. Magruder and Thomas L. Washington, and each of them, of, in and to the same, and to every part thereof." This deed was executed by the trustees, also, but not by any of the creditors, and was recorded in Baltimore county Court, Maryland.
It appeared by the Bill and Exhibits filed by the plaintiff Bowie, that part of his claim against William B. Magruder & Co. was founded on negotiable notes endorsed by him for them before the date of the said subpoena and attachment, but payable afterwards; viz, on the 13th of December 1799, and the 1st of January 1800; and that the residue of the said claim was for cash previously paid, at the Bank of Columbia, on their account.
The suit having abated as to the defendant William H. Washington by his death; and orders having been duly published against the absent defendants; after some other proceedings, a final decree was entered on the 20th of February 1805, in favour of Walter Smith and Charles Weyman assignees of the plaintiff (who pendente lite had become a bankrupt,) against the said absent defendants, for the principal and interest appearing due to him, and the costs of suit; and the other defendant John Luke having by his answer confessed that he was indebted to the said absent defendants in a certain sum of money secured by a mortgage, on which a decree of foreclosure and sale of the mortgaged promises had been obtained, but not executed, in a suit instituted by the said Wm. B. Magruder & Co. for that purpose, in the same County Court, it was farther decreed and ordered that the said Smith and Weyman assignees of the plaintiff Washington Bowie should have the benefit of the said decree of foreclosure and sale, and receive the money raised thereby.
On the 23d of November 1803, (before which day an interlocutory decree had been pronounced in favour of Bowie, nearly to the same effect with the final decree last mentioned,) David Williamson and others filed their Bill in the same county Court, setting forth their claim to the said mortgage by virtue of the Deed of Trust, which they contended was entitled to preference to Bowie's claim, on the grounds chiefly, that he, as well as the said William B. Magruder and Thomas L. Washington, being citizens of, and residents in, Maryland, he ought not to be permitted to institute an attachment in Chancery in Virginia against them, for a claim which also had its origin in Maryland, and that the whole of William B. Magruder & Co.'s property was transferred by the Deed of Trust, for the purposes therein expressed, before any claim was actually due to him from the said William B. Magruder & Co. and also prior to the filing of the Bill by the said Bowie in the aforesaid suit. They said also that the suit should have abated by the plaintiff's becoming a bankrupt during it's progress. They prayed therefore, that the interlocutory decree before mentioned be set aside as erroneous; and that the benefit of the decree of foreclosure and sale of the property mortgaged by the defendant John Luke be vested in them the said trustees; making the said William B. Magruder and Thomas L. Washington, and the assignees of Bowie, (in consequence of his bankruptcy) as well as himself, defendants to their Bill.
Note. In opposition to this objection, Mr. Wickham said, the uniform practice in the Federal Courts, has been for the suit not to abate by the plaintiff's becoming a bankrupt, but to go on for the benefit of his assignees. This practice (he observed,) is sanctioned by the express words of the Act of Congress. But, if it were not so, the bankruptcy could not be relied on unless it were pleaded in abatement puis darrein continuance: such objection can not be taken by a third person. --Note in Original Edition.
The defendant Bowie by his answer, insisted, that the same principle of justice, which declares a creditor whose debt is due and payable may secure it by way of attachment, will support an attachment the object of which is to secure a debt payable at a subsequent day; and averred that the notes, endorsed by him for William B. Magruder & Co. which were not yet payable, on the 9th of December 1799, when he obtained the attachment, were afterwards paid, when they became due, by himself, and by a certain W. C. Smith on his account. --He admitted that, at the time the attachment was issued, both himself and the said William B. Magruder & Co. resided in the state of Maryland; but he contended that the law of Virginia concerning absent debtors, made no difference among creditors and debtors, but put them all on the same footing without regard to the particular place of their residence; and, if it did not, the Constitution of the United States did. --He neither admitted nor denied that the Complainants were trustees as they alleged, but prayed the Court to require them to prove, by competent testimony, their trustee-ship.
Note. It was said in argument, that, in McKim v. Fulton, (M S.) the attachment in Chancery was in the nature of a Bill quia timet, for relief on a future and contingent event; nothing being due at the time; and it was supported by the Court. --Note in Original Edition.
The defendants Smith and Weyman assignees of Bowie, relied on his answer, being, in other respects, ignorant of the matters set forth in the Bill.
The County Court, on hearing the Bill, Answers, (to which there was no Replication,) and Exhibits, (the cause being set for hearing as to Bowie and his assignees,) dismissed the Bill with Costs, on the 20th of February 1805; and that decree was affirmed, in October following, by Chancellor Wythe, who adjudged, also, " that the appellants pay to the appellees damages according to law for retarding the execution of the said decree, together with the costs by them expended, in defending the appeal."
From this decree the Complainants appealed to this Court.
Nicholas for the appellants.
Call and Wickham for the appellees.
OPINION
Judge Roane pronounced the Court's opinion, as follows.
The Court, not deciding, as a general proposition, what is to be considered, in this Country, a lis pendens, binding on purchasers without actual notice, yet, considering this case by analogy to attachments against absconding debtors, whose credits as well as effects may be arrested, and alienations thereof prevented; and being of opinion that the Subpoena, with the indorsement thereon, operated, agreeably to the practice in this State, to stop the payment by the Garnishee of the monies due from him to the other defendants Magruder & Co., and to inhibit a transfer thereof, from them to others, from the time of the service of that process on him, and that service having taken place before the conveyance in this case, --is further of opinion that the proceedings in the suit instituted by Bowie, in the Bill mentioned, gave that creditor a preference over the claim of the appellants.
On this ground, (and without deciding upon the validity of the Conveyance aforesaid,) the Court is of opinion that the Decree of the Chancellor, so far as it affirms that of the County Court is correct; but that that decree is erroneous in giving damages against the appellants. The said Decree is therefore reversed with costs, and the cause remanded, with directions to the Court of Chancery to affirm the decree of the County Court.
Note. The deed of trust was objected to in argument, on several grounds; 1, as fraudulent, and therefore void, because, by its terms, the partnership effects were to be applied to pay private debts of Magruder, as well as debts of the Company: and 2, as not having been recorded in Virginia, without which it could not convey real estate here, so as to bar a creditor. It was contended by Mr. Nicholas, that a mortgage of land is considered in a Court of Equity as personal estate; but it was said on the other side, that this rule applies only between the Executor and Heir; that all assignments under seal, of such mortgages, pass the land itself, and therefore must be recorded. --Note in Original Edition.