Landeman v. Wilson & Beardsley

Johnson, Pbesident : On the 9th day of December, 1884, Wilson & Beardsley, a firm operating a large flouring mill in Cabell county, in this State, made an assignment of their property both real and personal including their flouring mill, to W. T. Thompson, trustee, to secure certain creditors therein named, who were divided into three classes and preferred in the order named. This deed was recorded on the 10th day of December, 1884. The plaintiff who held a claim for $722.04, which was not secured in said trust, brought his action in assumpsit in the Circuit Court of Cabell county on the 20th day of December, 1884, and filed his affidavit and sued out an attachment and had the same levied on the real estate included in said trust and garnished W. T. Thompson as having in his hands money and effe.cts belonging to .said firm. On the 2d day of March, 1885, the .attachment was docketed and on the 25th of the same month the defendants appeared in court and confessed judgment on the plaintiff’s claim and moved to quash the attachment, on the ground that the affidavit filed was insufficient to support the attachment. On the 19th day of August, 1885, the court overruled the motion to quash. W. T. Thompson, trustee, then filed his petition under the statute claiming the attached property as such trustee and having given bond, as the statute required, the question of the right of the property was tried before a jury; and on the 21st day of August, 1885, the jury rendered a verdict against the petitioner; and 'Thompson having before answered the suggestion against him, that he had sufficient funds in his hands of the firm of Wilson & Beardsley to pay the plaintiff’s claim, the court ■entered judgment for the claim and costs. To this judgment the said Thompson and the said Wilson & Beardsley obtained a writ of error. — 705 — Thompson took a bill of exceptions to certain, rulings of the court made on the trial of his petition, by which it appears, that, to sustain his claim to the property, he offered in evidence the deed of assignment and schedules “A” and “B” thereto annexed, to which the said Landeman objected, on the ground that the said deed was fraudulent on its face, which objection the court sustained and refused to permit said deed and schedules to go to the jury; and the petitioner excepted. The petitioner again offered said deed and schedules in evidence proposing to follow with evidence, that the express object and purpose of said Wilson & Beardsley in the insei'tion in said deed of the provisions in relation to the renting and operating of the mill, was to secure and insure to the creditors named therein the largest sum possible for the payment of their debts; and that it was then believed and understood by said Wilson & Beardsley, that in the financial depression then prevailing in Huntington, where said mill was situated, as well as in the whole country, a speedy sale would produce but a small part of its value, and to let it lie idle would impair its value; and that under these circumstances it would be better to postpone the sale for a reasonable time, and in the meantime to rent it. To the reading of which deed and schedules Landeman objected; and the eourt sustained the objection and refused to permit the deed and schedule to be read; and the petitioner again excepted. The deed offered in evidence provided as follows: — “In executing this trust, and to carry out the purposes thereof, the said trustee is to proceed to collect by himself or agent and attorney appointed by himself all and singular the notes, bonds, bills and evidences of debt and to make sale of all the property of every kind mentioned in schedule “A” either at public or private sale, as may seem to be to the best interest of the creditors of the said Wilson & Beardsley. And should the said trustee, W. T. Thompson, deem it to the best interest of said creditors, he is hereby authorized either to rent out or run the mill-property in the city of Huntington, Cabell county, West Virginia, hereby conveyed, known as the Biggs Mills, for the period of one or more years or for a greater or less period of time, as shall seem to him advis — 706 — able, after having consulted with the said creditors and obtained their consent or the majority thereof in interest herein.” The latter clause is the one, on which the Circuit Court based its judgment, that the deed was fraudulent on its face. The deed does not provide for the payment of the creditors generally. It divides the creditors therein mentioned and secured into thx-ee classes and gives priority in the order named; and no provision is made for the disposition of the surplus, if there should be any. Schedule “A” is substantially as follows : REAL PROPERTY. Warehouse and stable on block No. 95. $500 00 Biggs Mills, ill Huntington, &c. 20,000 00 Interest of Beardsley in land. 4,000 00 “ “ in other land. 830 00 “ of Wilson in land. 250 00 —-$25,580 00 PERSONAL PROPERTY. ■Flour &c. 3,842 27 Debts due Arm. 15,703 51 - 19,545 78 $45,125 78 Schedule “B” shows indebtedness; Tn 1st dn sft. $11,035 00 11,970 00 § 1,902 00 CO - 23,907 00 Reaving a surplus. $21,218 70 The deed purports to convey all the property both real and personal of the grantors. Is the deed fraudulent on its face; and was the refusal of the court to permit it to be read ip. evidence right ? The owner of property may do as he pleases with it, so long as no other person has any interest in it. He may, when he is out of debt, convey it to whomsoever he pleases, although he receive no consideration therefor. If he owes no one, he can do absolutely as he pleases with his own, unless restrained by statute. He may in good faith convey his property or any part of it to secure — 707 — the payment of his debts or a part thereof. lie may designate the beneficiaries by name or by. any other mode. He may prefer some of his creditors over others^ and may for a reasonable time postpone the execution of the conveyance, which is to strip him of his property. In such conveyance he can reserve to himself no benefit at the expense of his creditors. In cases where he postpones for a definite time the final consummation of the security, which he has created, and reserves to himself the use of the property during such time, it has been held, he is not to be regarded as delaying or hindering his creditors within the meaning of law, because the interest so reserved is liable to creditors acquiring liens by judgment or execution. (Cochran v. Paris, 11 Gratt. 348; Dance v. Seaman, Id. 77; Quarles v. Kerr, 14 Gratt. 48.) In all or at least in most of the cases in Virginia and in this State, where deeds of trust have been held fraudulent on their face, it appeared, that the property conveyed or a part thereof was of a perishable nature, and the deed contained a clause permitting the debtor to retain possession and control. In Lang v. Lee, 3 Hand. 411, the deed was held void. It disposed of “all the entire stock of goods in the possession of the said Lee in his store in the city of Williamsburg; * * * that the said goods are- to remain in said Lee’s possession, and he is empowered to make sale of them and to account with the trustee, if called on.” In Shepperd v. Turpin, 3 Gratt. 373, the deed provided after conveying the whole of the grantor’s property, consisting of a lot of ground, a number of slaves, horses and other personal property, that if the grantor failed to pay the debts secured before the 1st of March, 1816, (three years after the deed was executed) it should be optional with a majority of the creditors, who might assent to the deed, either to extend further time or to require the trustees to sell the property for cash to raise the amount then due to the assenting creditors; that the trustees should have power to aid said grantor in carrying on his business of brick-making by a loan of as much money, as in their judgment would be sufficient to enable him to prosecute his business, and, if after such aid they should think him injudicious or unthrifty, — 708 — they might at any time before the day limited for the payment take possession and sell the property. This deed was-also held void. In Spencer v. Bagnell, 6 Gratt. 444, the deed was executed on the 1st of November, 1841, and provided that the grantor “should be permitted to remain in possession of the property and use the same and enjoy the profits thereof until the 1st of March, 1843.” This deed was also held to be void. In Addington v. Etheridge, 12 Gratt. 436, the deed provided that the grantor should keep possession of and sell the stock of goods in the usual line of his trbde and occupy the store until default in the payment of any of the debts secured, and until the trustee should be requested by any of the creditors secured to close the deed by a sale. This too was held void. In Kuhn, Nutter & Co. v. Mack Bros., 4 W. Va. 186, the deed permitted the grantor to retain possession of goods and sell them in his business. This- deed was held void. In Gardner v. Johnston, 9 W. Va. 403, wheat and other perishable property by the terms of the deed was to remain-in the possession of the grantor. This Court held the deed void. In Claflin v. Foley, 22 W. Va. 434, the deed provided,, that the conveyance should include “such goods and merchandise, as may be added to said stock from time to time-by the grantor and brought into the store in the course of business -or to take the place of such goods, as may hereafter be sold,” but did not authorize the trustee to take possession or control of said goods, until the grantor should make default in payment, &c. The deed was held void. In Livesay v. Beard, 22 W. Va. 585, the deed of lands- and personal property fixed no definite period, at which a sale could be required, and put it in the power of the grantor by collusion with a part of the creditors to indefinitely postpone a sale under the deed. The deed also provided that all the live stock conveyed, by the deed and the-increase thereof and all future crops, until sale should be made, should be in. the quiet enjoyment of the grantor,, from which he might support his family and pay the — 709 — debts secured as be might deem most advantageous. This deed was held void, as were similar deeds in Klee v. Ritzenberger, 23 W. Va. 75, and Shattuck v. Knight, 25 W. Va. 580. It is insisted by counsel for plaintiff in error, that there is-nothing in the deed here under consideration, which reserves-any possession or any interest in the grantor and nothing in the powers conferred ujjon the trustee, which can be fairly construed to hinder, delay or defraud the creditors of Wilson & Beardsley, the grantors. The deed provides for a sale either public or private. The provision, that the trustee might sell at private sale would not make the deed fraudulent on its face. (Shackelford v. Bank, 22 Ala. 238; Burgiss v. Burgiss, 1 Ired. Law, 453; Skipworth v. Cunningham, 8 Leigh, 273; Kyles v. Harveys, 25 W. Va. 729.) If the deed is fraudulent on its face it is rendered so by the following provision: “And should the said trustee, W. T. Thompson, deem it to the best interest of the said creditors, he is authorized either to rent out or to run the mill-property in the city of Huntington, Cabell county, West Virginia, hereby conveyed, known as the Biggs Mills, for the period of one or more years or for a greater or less period of time, as shall seem to him advisable after having consulted with the said creditors and obtained their consent or the majority thereof in interest herein.” It is argued, that such a provision is no more fatal to a deed, than were the provisions in the deeds in the following cases: Jones v. Whitbread, 5 Eng. L. and Eq. 431; Coates v. Williams, 9 Eng. L. and Eq. 481; De Forest v. Bacon, 2 Conn. 633; Kendall v. Corfat, 13 Conn. 383; Cunningham v. Freeborn, 11 Wend. 240; Woodward v. Marshall, 22 Pick. 468; Robins v. Emory, 1 Sm. & M. Ch’y 207; Dunham v. Waterman, 3 Duer 166 and Marks v. Hill, 15 Gratt. 400, where the deeds were held to be valid. We will examine some .of these cases. In Jones v. Whitbread an assignment was made by a debtor of all his estate and effects to a trustee upon trust for sale for the benefit of the creditors, and contained a provision enabling the trustee to employ the debtor or any other person “in winding up the affairs of the debtor and in col — 710 — lecting and getting in his estate and effects and in carrying-on his trade, if thought expedient by the trustee, and to allow the person so employed out of the trust-estate such sum as the trustee should deem proper.” It was held that the carrying on the trade being only ancillary to winding up the affair of the debtor, the deed was not void. The court distinguished that case from Owen v. Body, 5 Ad. & El. 28 — Jarvis, C. J., said — “ The argument of this case has shown, that Owen v. Body is not applicable to it. There one of the purjjoses of the trust was to cary on the trade, and Lord Denman in delivering the judgment of the court, that the assignment was not good, said: — ‘ The deed imposed such terms, as might have constituted a partnership among the persons executing; and those were terms, to which creditors were not bound to submit.’ In the present case however the deed contemplates the selling the property assigned and the winding up the affairs of the debtor, and only authorizes the trustee to go on with the trade for the purpose of winding up, which is the principal object of the deed, the carrying on the trade being no more than ancillary to it.” In Robins v. Emory it appeared, that a railroad corporation assigned its property for the benefit of its creditors. The road had been nearly completed, and the means of the corporation were exhausted, and the period for completing the road under its charter had nearly expired, and the expiration of the time without the completion of the road would forfeit its charter. The road in condition at that time would be comparatively worthless; and if it should not be completed, the amount already expended would be a total loss to the company. It was held, that a provision in the deed authorizing the assignees to borrow $250,000.00 to complete the road and pledging the assets of the company and the profits of the road for the payment of the same before any of the other debts did not vitiate the assignment that an assignment otherwise free from the imputation of fraud is not vitiated by the fact, that it wa.s made in •part to secure anticipated advances,- especially when those advances are in aid of the general purposes of the assignment. — 711 — In DeForest v. Bacon there was a provision in a deed convening a brush-factory &c. to the following effect: — “ The trustees are to have power to conduct and carry on the manufacturing of brushes of various kinds and descriptions, until all the material now on hand shall be consumed, and to purchase such articles, as are necessary to manufacture and work up all the raw material on hand.” The court held the deed valid. In Kendal v. Carpet Co. the assignment was of a carpet-mill. The deed provided, that the assignor should have the right to make up the stock on hand and to make purchases necessary for that purpose. The court said: — “ That such a power may be greatly beneficial to all parties connected with the affairs of a large manufacturing establishment, is very apparent. That such a concern should be suddenly suspended, and the stock in the various stages of manufacture be sold in parcels or together, must greatly diminish the value of the property to the creditors and impair their security. Accordingly it has been holden by this court, that such a power fairly conferred was a valid power (DeForest v. Bacon, 2 Conn. 683.) "We see no cause to reverse that decision. It is indeed a power, which may be abused; but the interest of vigilant creditors will generally prevent its being used improperly, or, if it is, procure its detection.” The case of Marks v. Hill, 15 Gratt. 400, is much relied on by counsel for appellant. They say, that in that case the authorities above cited are approved. In that case Hill & Nichols, partners in business, executed a deed of trust upon their stock of goods to one Collier, to secure, -first, a debt of $2,500.00 due from Hill to one Bragg, and a note of Nichols’s for $2,000.00 endorsed by one Thompson and the trustee, Collier; second, certain firm-debts “in trust, that Collier with the consent in writing signed by Bragg and Thompson should permit Nichols as agent to carry on said business, the stock of which was thereby assigned, with authority to replenish said stock, for the purpose of paying off the debt of Hill to Bragg and said note of Nichols’s and in trust also, that Collier should proceed to dispose of the effects of the firm and collect the credits specified in a schedule annexed to the deed, and pay the debts of the firm specified in — 712 — another schedule. Out of the collection of said credits and any sale of said effects first to pay the expenses of the trust, then to pay the borrowed money, and next to pay ratably the debts in the schedule. There was also the further stipulation, that the agency of Nichols should be arrested, whenever Bragg, Thompson or Collier or any three of the other creditors should in writing give direction to Collier to make sales. Judge Daniel after referring to the decisions, we have cited, authorizing a trustee to wind up the business of a concern, says, he sees no necessary conflict between these decisions and the cases of Exchange Bank v. Inloes, 7 Md. 380, and Whallon v. Scott, 10 Watts 237, in which the deeds were held fraudulent on their face. The deed in 7 Md. provided, that the trustee might at his discretion sell gradually the goods “in the manner and on the terms, in which in the course of their business the grantors had sold and disposed of their merchandise.” No time was fixed for the winding up of the business and no power was given the creditors to have the trust closed. The court said, that the deed was simply a contrivance through the instrumentality of a trustee to provide for carrying on the business of the concern in the same manner as it had bóen before conducted and for an indefinite period free of all control or interference on the part of the creditors, and that he could not thus postpone his creditors to an indefinite period without their consent. The court further said, as quoted by Judge Green in Kyle v. Harvey, 25 W. Va. 730, after citing the class of cases permitting a power to a trustee to wind up the business — “ But it will be found on examination of these cases, that most, if not all, of them rest upon the important principle, not applicable to the present case, that the stipulation in question was designed more effectually to promote the interests of the creditors, and not intended for the benefit of the debtor, or where it was intended to be auxilliary in the winding up of the debtor’s business, as where he had on hand at the time of the assignment unmanufactured materials in the way of his business or the like.” Judge Daniel in reviewing the latter case says : — “It was however concluded by the court, that there might be cases, in which the stipulation in question would be proper, — 713 — where it was designed to be ancilliary to the winding up of the debtor’s business, or was designed more effectually to promote the interests of the creditors and not intended for the benefit of the debtor.” After reviewing Whallen v. Scott, 10 Watts, he says : — “I find nothing in the facts of the case or in the language of the courts, which would make the decision or the opinion in that case authority for denying to a debtor in making an assignment for the benefit of creditors the power to enter into stipulationsior the winding-up of the business, as were sustained in the cases, I have cited.” How long would it take in a case like Marks v. Hill, to wind up the business, when the seller of the merchandise was continually from the proceeds of sale “replenishing the said stock ? ” In the case in 7 Md. there was no express provision for “replenishing the stock,” yet the court held that deed void on its face. Daniels, Judge, in Maries v. Rill applies the principles of those cases, which are manifestly right, to the facts in his case, to which, it seems to me, the cages are wholly inapplicable. He says, pp. 412, 413: “In the deed under consideration the clause conferring upon Nichols as agent the power to carry on the business and replenish the stock does not in terms declare, nor is it in any other part of the deed declared, that the power is given for the purpose of winding up the business of the concern. But on reading the clause in connection with the other provisions of the deed, and more especially the provision contained in the last paragraph, the true construction to be put on the provision directing the manner of disposing of the goods and their proceeds taken as a whole is, I think, that Collier is vested with the power, as soon as he shall deem it advisable or as soon as he shall be requested in writing either by Bragg or Thompson, the preferred creditors, or by any three of the other creditors to make sale of said goods at auction in such way, as the said Collier shall judge best for the benefit of the parties interested ; and that in the meantime Collier with the consent of the said Bragg and Thompson may employ Nichols as his agent to sell the goods at private sale and replenish the stock, whilst so carrying on the business; apcl that the prq714 ceeds of the sales, whether of the sales made by Collier at auction or of those made by Nichols whilst continuing the business, are to be applied in the payment of the two preferred debts. So construing the deed 1 can not see, that there is any provision in it inconsistent with an honest surrender by a debtor to> his creditors of his property for the payment of his debts. The grantors have parted completely with all their property, and with all dominion and control over it.” This it seems to me is a forced and unnatural construction of the deed, which goes to the verge of, if'not beyond, the just rule, which compels a debtor to make a complete surrender of his property for the payment of his debts. In Jones v. Syer, 52 Md. 211, it was held, where an assignment professing to be for the benefit of creditors generally of certain goods, stock in trade and other personal property, contained a clause authorizing and empowering the trustee “to cany on and conduct said business in his discretion, for such time as in Ms judgment it shall be beneñeial to do so, or to sell all such goods and the stock in trade and property, at such times, in such manner, and for su'ch prices as he may deem proper, and apply the proceeds, &c.,” that the certain effect of this clause would be to hinder and delay creditors, and as against them such provision rendered the deed void; that a deed must speak for itself, and its obnoxious provision cannot be aided, modified or explained by extrinsic evidence. For the court, Alvey, J., said: — “ It is an attempt on the part of the debtor to place his property for an uncertain and indefinite period beyond the reach of his creditors, and to make their rights in a great measure dependent upon the uncontrolled discretion of a trustee of the debtor’s own selection. The law will tolerate no such attempt but treats the act as a fraud upon creditors, and the instrument of conveyance as simply void as against them.” In Gardner v. Bank, 95 Ill. 298, it was held, that the placing of property in the hands of an assignee for any other purpose than to distribute it or its proceeds among creditors is fraudulent and void as to creditors. If made to procure time for the assignor, it is fraudulent, and when the assignor has, or thinks he has, more property than is necessary to pay his debts, the assignment can only be presumed to be in. — 715 — tended for his own benefit; for in that event he only is to be profited, &. clause in an assignment for the benefit of creditors authorizing the assignee to carry on the business of the assignor “ for such time, as the assignee may deem necessary to prevent shrinkage and loss, and closing out and liquidating the same to the best advantage,” where the deed recites, that the assignor has property sufficient to- pay three times what he owes, together with a clause, that the assignee may make, assign, endorse, and guarantee any and all bills of exchange and promissory notes or other papers for any new indebtedness that may be contracted in carrying on the business, and to lease or mortgage the real estate, etc., unless compelled sooner to close upon the request of a majority of the creditors, clearly vests power in the assignee to hinder and delay creditors and renders the assignment fraudulent. Mr. Justice Schofield, in delivering the opinion of the court, quoted approvingly, the following from the opinion of the Yice Chancellor in Van Nest v. Zoe et al., 1 Sandf. Ch’y 4; “The debtor who believing himself more than solvent-, places his property beyond the reach of the process of the law, whatever may be the pretence under which he cloaks the act, in the language of the statute of frauds “hinders” and “delays” and ultimately defrauds his creditors. It is no answer to this assignment to say, that the debtor provides ■an ample fund for the payment of the debt, and that the creditor is ultimately to be paid in full. The law gives to the creditor the right to determine whether his debtor shall have further indulgence, or whether he will pursue his remedy for the collection of the debt. The deferring of payment is generally an injury to the creditor, and he may be overwhelmed with bankruptcy for the want of the fund which is locked up by the voluntary assignment of his debtor. It is mockery to such creditor to say, that the assignment is made for the benefit of creditors.” While the authorities, outside of Virginia and this State; are more stringent as to the rights of debtors in making assignments, yet I have found no case in Virginia or in this State, that would sustain the provision in the deed, we have before us. How stands the provision in this deed ? The question is : Taking the deed alone, do any of its provisions — 716 — show an intent on the part of the debtors to hinder or delay their creditor? If a deed is void in law for matters appearing on the face thereof, it cannot be made good by evidence aliumde showing, there was no such intent. We are to look to the character with which the law stamps the deed without reference to extrinsic facts or to motive. If the law imputes to the grantor a fraudulent design in making the deed, no evidence of intention can change the presumption. If the law declares such deed to be void, it is no matter how the question of fraud in fact may stand. (Trammel v. Truber, 3 Md. 11; Inloes v. Bank, 11 Md. 183; Jones v. Syer, 52 Md. 211.) In Malcom v. Hodges, 8 Md. 418, it was decided, that the validity of deeds must be determined without regard to the surrounding circumstances, which in that instance were, that a large majority of the creditors had examined the aifairs of the debtor and concluded unanimously, thal it would be to the advantage of all the creditors, that an assignment should be made, and the deed in question was executed accordingly ; and in reference to the argument of counsel that the grantors had derived no benefit from the reservation by resulting trust, and that the creditors were not injured by that feature of the deed, as there was no surplus, it was said; “We cannot look outside the assignment to ascertain, whether there will be a surplus or not. That would make the efficiency of the instrument depend on extrinsic circumstances, when the law requires, that its intent shall be gathered from its face.” In the opinion of this Court in Kyle v. Harveys, delivered by Green, J., great stress was laid upon the fact, that it was evident, that the debts could not be paid out of the property conveyed. There the question was, whether a provision authorizing the trustee to sell the goods at private sale made the deed fraudulent, and it was held, it did not. Judge Green says in that case, 25 W. Va. 727: “The property of the debtor, W. T. Earles, being as appears on the face of the assignment of September 24th, 1882, insufficient to pay his' debts, the effort to protect it from sacrifice by the insertion of the provision, that the assignee Neal should sell the goods transferred at private sale, was not inconsistent with fail" — 717 — dealings and honesty, and instead of violating the policy of the law, or the rights of creditors it is in harmony with both and exempt from the charge of fraud.” Again on page 732 he says: “The grantor evidently thought that a public sale of his stock of goods might result in a sacrifice and a loss to his creditors; for it must be borne in mind that this assignment shows on its face that the grantors regarded this stock of goods as entirely insufficient to pay their debts secured by it.” On the deed before us the contrary appears upon the face of the deed. The estimate of the value of the property by the grantors themselves in the deed is much more than the debts therein secured. The' deed commences: “Whereas the said Wilson & Beardsley are justly indebted in sundry and considerable sums of money, and have become unable to promptly pay and discharge the same, and are desirous of conveying all their property and rights of property as hereinafter mentioned; Now therefore this deed, witnesseth,” &c. It does not pretend to mention any creditors except the three classes therein referred to, who are preferred in the order named. How many outside creditors there may be, does not appear. The plaintiff here is certainly an unsecured creditor, and his rights are just as sacred as if a hundred more stood in the same position with him. Now what do these grantors provide ? They provide for a trust-sale of all the property and that the mill-property need not be sold for an indefinite period of’ time, if the trustee thinks it to the best interest of the secured creditors, not the unsecured ; their rights are not to be considered at all. If the said trustee deem it advisable after consulting with the said secured creditors and obtaining their consent or the consent of a majority in interest of them, that is, by obtaining the consent of Biggs, who held $11,035.00 of the debts, and the Peabody Insurance Company, which held $4,000.00, making a majority in interest, that is, by consulting two of the sixteen secured creditors, and obtaining their consent, he is authorized “to rent out or run the mill for the period of one or more years or for a greater or less period of time,” that is, run it indefinitely for ten, twenty or more years ; or rent it for ten, twenty or more years, and thus put it out of his — 718 — control. He would be powerless to do anything except to secure the rent and apply the proceeds to the extinguishment of the debts in the order of their priority. All the property set out is by the grantors valued at about $45,-000.00; the mill they value at $20,000.00. Now suppose Biggs and the Peabody Insurance Company agreed, that the trustee may rent the mill for ten years, and it is so rented, and then the personal property is sold and comes within five thousand dollars of paying the secured debts, all the creditors would be delayed for at least ten years in the collection of their claims, and the unsecured creditors would be at the mercy of the trustee. . There is nothing for them, until the expiration of the lease. They can not have the property sold subject to the lease, if the deed is valid, because it was to be rented insted of being sold. It seems to me scarely possible to imagine a clearer scheme to hinder and delay creditors. If would be the necessary effect of the exercise of such a power, and, as men must be presumed to intend the necessary consequences of their acts, we are compelled to hold, that the said deed shows on its face, that it was executed with the intent to hinder, delay or defraud creditors of Wilson & Beardsley. There is no good reason shown on the face of this deed to postpone the sale of the mill. The case can not be brought within the scope of the decisions, we have cited, justifying a clause in a deed permitting business to be carried on until it was wound up. Looking at the circumstances disclosed in the deed, the property being worth more than the debts secured itis very evident to my mind, that the intent in inserting the provision to run or rent the mill, was not to benefit the creditors, but to benefit the debtors, to delay the sale, until the mill at a sale would bring more money. The law does not tolerate any such practice as that. When a debtor devotes his property to the payment of his debts, he must not in the assignment regard his own interest at all, and if a provision is inserted to postpone the sale beyond a reasonable time, it will be held to be for the debtor’s interest; and, if he can not hold the possession himself against the interest of his creditors, the trustee appointed by him can not be permitted to do the same thing for him. The grantor can not place his property in the — 719 — power of a majority of bis creditors, either in numbers or interest, to the injury of any other creditor. Every creditor must have the same right to have the property sold for the benefit of all the creditors. Said creditor may not have the right to an equal participation in the proceeds, for the debtor may prefer some of his creditors; but he has a right’to have the property sold and to participate in the surplus, after the preferred creditors are satisfied. The deed by reason of the provision, we have been considering, is fraudulent on its face. But while it is void as to said power, is it void in toto ? A deed held fraudulent on its face is so held, because the court is under the law compelled to declare, that it was executed with intent to hinder, delay or defraud creditors. It has often been held and may be considered as well settled, that where an assignment is fraudulent as to any of its provisions, it is void in toto as against creditors, who are entitled to take advantage of the fraud. (Pierson v. Manning, 2 Mich. 446; Caldwell v. Williams, 1 Ind. 405; Burke v. Murphy, 27 Miss. 167; Mackie v. Cairns, 5 Cow. 548; Goodrich v. Downs, 6 Hill 438; McClung v. Lackey, 3 Pen. and W. 83; Ticknor v. Wiswall, 9 Ala. 305; Rissam v. Edenmuston, 1 Ired. Eq. 180; Mofner v. Irwin, 1 Ired. L. 490; Fiedler v. Day, 2 Sandf. 594; Russell v. Winra, 37 N. Y. 596; Wakeman v. Grover, 4 Paige 23; Darling v. Rogers, 22 Wend. 483.) In this last case the court made a modification of the doctrine held in Rogers v. De Forest, 7 Paige 272, and in speaking of the rule, “void in part void in toto” the court said : “There is no such general principle as the maxim would seem to indicate. On the contrary the general rule is, that if the good be mixed with the bad, it shall nevertheless stand, provided a separation can be made. The exceptions are: first where a statute by its express terms, declares the whole deed or contract void on account of some provision which is unlawful; and second, where there is some all-pervading vice such as fraud for example, which is condemned by the common law, and avoids all parts of the transaction, because all are alike affected.” Our statute of frauds provides : “Every assignment given with intent to hinder, delay or defraud creditors shall as to such creditors be void.” — 720 — Code chap. 74, sec. 1. If the assignment is tainted with fraud, by our statute it is not void in part only, but it is void in toto. Fraud is an all-prevading vice, and whatever it touches, it taints throughout. Part can not be bad and the rest good. It is all bad. And it matters not how that fraud is made to appear. If the instrument is not on its face fraudulent, it may be shown, that it is in fact so ; that it was executed with a fraudulent intent. If that intent appears on the face of the deed, the injured creditor is saved the trouble of proving it. This deed is therefore void in toto. But one question more remains to be considered in this record, and that is: Was the affidavit sufficient? If the attachment was sued out without a sufficient affidavit, then the court erred in refusing to quash it. The only objection made to the affidavit is, that the “material facts” stated, on which the affidavit was based, shows no sufficient ground for the attachment. A number of grounds are stated in the affidavit, but only two will be noticed: first, “ that the defendants have assigned and disposed of their property with intent to defraud their creditorsand second, “ that the said defendants fraudulently contracted the debt for the recovery of which the suit was brought.” It is insisted, that according to the principles settled in Delaplain v. Armstrong, 21 W. Va. 211, the affidavit was wholly insufficient. It was held in that case, that the grounds for the attachment were conclusions of law. The “material facts,” which the statute requires' the affidavit to state, are the allegations, from which the court may be properly authorized to conclude, that the grounds exist. Consequently an afín ■davit, which only states, that the debtor did an act or acts, which of themselves are not necessarily fraudulent, with an intend to defraud his creditors, is not sufficient. The law is there clearly, concisely and correctly stated. To sustain the charge in the affidavit, that the assignment was made with intent to defraud the creditors of the grantors, the material facts stated are the making of the assignment and the powers which it contains, which, we have held, were conclusive evidence that it was made with fraudulent intent. That is certainly sufficient. The material facts relied on to .sustain the charge, that “the debt was fraudulently con721 traded,” are “that defendants for some time before and up ¡to the time of making the assignment were conducting a large flouring mill in the city of Huntington, and that in the course of said business they became much embarrassed and deeply in debt; that on the first day of December, 1884, a few days before the assignment was made, they made preparations for making an assignment to one T. W, Taylor, for the benefit of certain of their creditors, but from some cause postponed the making of the assignment for a time until December 9th, 1884, during which time the said firm was hopelessly insolvent, and such fact was well known to said defendants and to each of them, and was and had been known to them since November 1st, 1884; and being so insolvent 'and having full knowledge of the fact they concealed it from the affiant, and ordered the two car-loads of wheat to be shipped to them, while they were so insolvent, and the last car-load was ordered by them fyy telegraph on the 2d day of December, 1884, while they were contemplating the making of an assignment, and was received by them on the same day, they made said assignment, and placed in their mill ; and before the same was taken out of the sacks, in which it was shipped, the said assignment was made to W. T. Thompson, assignee for the benefit of certain creditors of the firm, who had loaned them money.” Concealment of his insolvency by a purchaser, who obtains possession of goods without intending to pay for them, is a fraud and the property does not pass. [Durell v. Haley, 1 Paige Ch’y 492 (19 Am. Dec. 444); Harris v. Alcock, 10 Gill & J. 226 (32 Am. Dec. 158); Bedault v. Wales, 19 Mo. 36 (59 Am. Dec. 327); Donaldson v. Farnell, 93 U. S. 631.] In Mulleken v. Millar, 12 R. I., it was held, that, where A through his agent purchased certain merchandise on credit and the day after its delivery made for the benefit of his creditors a general assignment to I; and A’s liabilities were large and his assets were small, and the seller brought trover against I for the merchandise, it was not necessary for the plaintiff to show a particular intent on the part of A to defraud in the particular transaction in question; that it — 722 — was sufficient for the plaintiff to satisfy- the jury of a general intent on the part of A to defraud, by continuing to purchase on credit, after- he had become hopelessly insolvent. In Talcott v. Henderson, 31 Ohio St. 162, it was held, that a contract of purchase of goods on credit, made with intent on the part of the purchaser not to pay for them, is fraudulent; and if the purchaser has no reasonable expectation of being able to pay, it is equivalent to an intent not to pay. It seems to me under these authorities and in reason even under the strict rule laid down in Delaplain v. Armstrong, 21 W. Va., that, if these material facts stated are true, the debt due the plaintiff w-as fraudulently contracted. On this point my associates express no opinion, deeming it unnecessary in this case to decide that question. It is not necessary to notice the other frauds; or the material facts stated to sustain them. The court did not err in overruling- the motion to quash the attachment. We see no error in the judgment of the Circuit Court, and it is therefore affirmed.