Barnard Adams, & Co. v. Moseley

HAWKINS, J.

It is contended that the decree made in this case, to which Bellamy, executor of Abram Bellamy, Mathers, Blackburn, Graham, Gelzer, and others, were parties, is fraudulent, as tending to defeat, delay and hinder creditors. If this was the case, the duty of the Court would be a very plain one — but we cannot see that there was any fraud in the transaction. It was arranged by the decree that Gelzer and Graham should deliver the possession of the real estate, mill property and slaves and increase to W. D. Moseley, the receiver and commissioner appointed by the Court, to be sold by him, after-thirty days’ notice, as he may be directed by complainants, or either of them, and the proceeds to be applied to the Bellamy debt, and that in the meantime, Moseley was to receive, take charge of and manage the concerns of the mill, the issues and profits of which were to be exclusively applied to the discharge of the debt due to Bellamy.

Moseley did not take actual possession of the mill for the purpose of working it, but left it in the possession of Gelzer and Graham to be used by them. The possession of these individuals must be regarded as the possession of Moseley, and they could have been compelled to attorn to him if he had deemed it necessary. It has been seen by the terms of the decree, that the property could have been sold at any time at the instance of Bellamy. Moseley, for the purpose of procuring time for Gelzer and Graham, to enable them to pay their debt to Bellamy, becomes security for the amount of the mortgage debt, and. by. way of indemnity to him, and security to Bellamy, the decree was made. The property was left in the possession of Graham and Gelzer, because they understood the management of the mill, and Moseley trusted to their integrity and honesty to manage the mill property, and hoped, he says, that the receipts of the mill would contribute to reduce the debt due by Graham and Gelzer. That in 1847, property having risen in value, the property, by consent of all parties, was sold.

We cannot see any fraud in this decree, or any thing calculated to hinder or defeat creditors, but it seems merely an arrangement for the purpose of enabling debtors to liquidate their debts by the retention and use of, rather than by sale of the property. Indeed the tendency of the arrangement was rather intended to benefit the other creditors of Graham by the prevention of a summary sale of his property under execution, and in ratio to the amounts paid Bellamy out of the profits of the property mortgaged, to that extent would the chances of the creditors of Graham be increased. Of course a Court of Equity would not permit a fond to be locked up for the purpose of securing it from creditors, even under a decree of a Court, but a parly complaining of such a procedure, would have an adequate remedy by an appeal to the equitable side of the Court, which on proper showing, would compel the parties to that decree, to proceed and sell oído what might be deemed equitable. But no steps are taken until the property mortgaged is sold. It is alleged in the bill and urged in argument, that the profits of the mill for four years were sufficient to have paid off the debt due to Bellamy. This is negatived by the answers, and the account of the profits, expense, &c., if not surcharged or falsified by the complainants, and therefore, we must take it as true and correct. We do not concur with the counsel for complainants, that it was the duty of Moseley to have sold exclusively the property of Gelzer. It was a joint debt, and their joint property as contained in the mortgage, was the property which should have been sold. The record shows, too, that more of Gelzer’s property than Graham’s was sold. Noah, Arthur, and Mary were the property of Graham, and the rest of the negroes, seven in number, were the property of Gelzer, as well as the mules, and that the mill property was owned jointly. The complainants show no ground for a subrogation to the rights of Graham, for the above reason, and further that Gelzer states in his answer, that Graham owes about three-thousand dollars.

It is contended that the note given by Moseley to Bellamy extinguished the mortgage. There is no allegation of this in the bill, but admitting this, the property of Graham would have been released from the lien of the mortgage and the effect of the decree, and the complainants should have levied their execution upon the property of Graham, and this question could have been settled at law upon a trial of the right of property. It was certainly the. duty of Moseley to have paid the debt to the estate of Bellamy, and as to the surplus, if any, to have paid it into Court, to abide its final or further order. But whatever steps might have been legally taken by complainants were not taken until the fund was paid over, excepting the amount brought by the sale of York and March, and these negroes were the property of Gelzer and not Graham. Whatever equitable rights complainants may have had upon the funds in the hands of Moseley, we think clearly waived by their negligence.

No bill was filed until the transaction was closed, and as before remarked, if the individual property of Graham was liable to their execution, they should have levied it upon that property. With these views, we think the decree of the Circuit Court should stand. It is therefore ordered, adjudged and decreed, that the decision of the Court below be affirmed, and that the bill of complainants be dismissed with costs.