1.

CHARLESTON.

FEELY V. BRYAN.

Submitted January 26, 1904. Decided April 1, 1904.

MORTGAGE.

Any writing charging a debt on property, though not a formal mortgage, is an equitable mortgage or lien. (p. 587.)

2. MORTGAGE AFTER LOAN-Preference.

3.

4.

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.)

TRANSFER-Insolvent Debtor.

A transfer or charge 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.)

INSOLVENT DEBTOR.

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.)

5. INSOLVENT Debtor.

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.)

Appeal from Circuit Court, Tucker County.

Bill by W. A. Feely against S. J. Bryan and others. Decree for defendants and plaintiff appeals.

J. P. SCOTT, for appellant.

CUNNINGHAM & STALLINGS, for appellees.

Dismissed.

BRANNON, JUDGE:

Bryan and Gillespie had a drug store in Tucker county, and Bryan purchased Gillespie's interest, and to pay for it Bryan, on 22d June, 1900, borrowed $1,100 of Feely upon the agreement that Bryan was to execute a deed of trust or mortgage on the drug store to secure Feely. No mortgage was at the time given; but on 27th October, 1900, Bryan made a sealed instrument reciting that he was indebted to Feely in the sum of $1,100, and saying, "and for the security of said sum I do hereby mortgage and assign" to the said W. A. Feely a soda fountain, some bottles, and the stock of drugs. This obligation was antedated to 224 June. It was acknowledged and recorded 27th October. On February 19, 1901, the drug store stock was levied upon under three executions in favor of Cunningham & Stollings, The S. Wilson Cigar Company and O. M. Haines for several debts; whereupon Feely obtained an injunction restraining sale under the executions. The court appointed a receiver and he sold the stock at $700, and the fund is in court to abide its order. In this suit Cunningham & Stollings, the Cigar Company and Haines filed answers averring that when Bryan made the mortgage to Feely, Bryan was insolvent, and therefore it operated for the benefit of all his creditors under section 2, chapter 74, Code. Upon the evidence the court held that Bryan was insolvent at the time of making the mortgage, and sent the case to a commissioner to ascertain all debts of Bryan, and fix their shares in the fund. He reported a large number of debts, among them debts contracted by Bryan after the loan and after the mortgage. He also reported Bryan was insolvent. Feely excepted to the finding of Bryan's insolvency, and because debts. of Haines & Co., Coffman and James Clark Distilling Company were reported to share in the fund, those debts arising after the recordation of the mortgage. The court decreed that all the debts share pro rata in the fund, and Feely appeals.

Counsel contends that the obligation executed by Bryan to Feely is nondescript, contains no words of grant like a deed of trust, and cannot operate as a lien or mortgage. Under the principle often stated that every express agreement in writing showing intent to make some particular property, real or personal, security for a debt, or assigning or promising to assign it as such security, is an equitable lien or mortgage, this instru

ment so operates. Fid. Ins. Co. v. Railroad, 33 W. Va. 761; 2 Am. & Eng. Dec. in Eq. 436, 441. I think the evidence clearly shows that the findings of the commissioner and judge of the fact that Bryan was insolvent on the date when the equitable mortgage was executed is correct. But he was not at the date of the loan, at which time he agreed to give a mortgage. What is the effect of this agreement afterwards executed by the mortgage? Does it make the mortgage stand as if made at the date of the loan? If it does, then it is a lawful preference even under section 2, chapter 74, Code 1899, as a mortgage given at the time of a loan is not a preference condemned by it. I admit the rule suggested by counsel that for some purposes equity regards that as done which is agreed to be done, and on this principle the law is that an agreement to give a mortgage for a valid debt is treated in equity as a mortgage. 1 Jones on Mort. section 163. But we are dealing with a statute, and we must go by it. It says that if a loan be made or other debt be "contracted at the time such transfer or charge was made," it is not a preference contrary to the statute, but a valid charge. The requirement in letter is that the loan and mortgage must be at the same time. A loan was made under agreement to secure it by mortgage, and was afterward executed. The act declared that mortgages made in contemplation of insolvency, with the design to prefer one creditor over another, should operate for the benefit of all, and provided that the act should not affect a mortgage to "secure a debt or liability created simultaneously with such mortgage." It was held that the mortgage had no preference because not made simultaneously with the creation of the debt. Darnell v. Lewis, 94 Ky. 455. See Bank v. Hunt, 11 Wall. 391. The court said the language means that the execution of the mortgage and the creation of the debt must be simultaneous. The promise to execute a mortgage in future to secure a debt that day made is not a simultaneous act. Besides, to substitute the promise for the act of executing the mortgage would allow a debtor, in contemplation of insolvency, to make the preference that it was the object of the statute to prevent. See Ahern v. White, 39 Md. 409. I confess that my first impression was that as the loan bettered the estate of Bryan, and as a mortgage would have been good if executed when the loan was made, and as before any creditor had fixed lien by execution on Bryan's property the mortgage was ex

ecuted, it ought to be good. But first, there is the letter of the act requiring the loan and mortgage to be contemporaneous, and, second, any other construction would open wide the door to defeat the good designed by the statute by allowing oral evidence of a promise to make a mortgage. It gives fraud and perjury a chance to do their work. We must give the act a construction which will best protect the business world, and it is apparent that safety to business will be promoted by the construction we give. Therefore, we hold that said mortgage has no preference over other debts.

But we hold the decree erroneous in allowing debts not existing at the date of Feely's mortgage, because the statute says that the insolvent's property shall go pro rata to "all the debts of such insolvent existing at the time such transfer or charge is made." What possible equity can a subsequent creditor have to complain of the mortgage unless kept off the record? All the debts, so far as the report shows, are dated after the mortgage; but perhaps, and likely, some of the judgments were on debts ante-dating the mortgage. The answer alleging they antedated the mortgage was denied.

It is said that there is error in the decree in that it decreed shares in the fund to people who did not attack the mortgage.

Only three creditors filed an answer attacking the mortgage, but a number of others were reported as creditors of Bryan by the commissioner. They did not otherwise appear. But it has been held that when a case is before a commissioner to ascertain debts a creditor may there informally present his claim, though not a formal party, and thereby he becomes an informa! party, he thereby asks relief, and he can appeal. Hogg's Eq. Prin. 614. Wilson v. Carrico, 50 W. Va. 336; Dunfee v. Childs, 45 Id. 155; Woodward v. Polsley, 14 Id. 211; Belinger v. Sherman, 23 Id. 656.

Observe that the statute allows him to come in at any time before final decree. By so coming in, without petition, he subjects himself to the jurisdiction of the court and will by decree be made to share the burden of costs, whether he agrees to do so or not. So coming in is a sufficient attack on the preference.

The answer attacking the mortgage was filed more than four months after the recordation of the mortgage, and was thus too late; but there was no exception to that matter of it attack

ing the mortgage. The answer makes no parties and is not formal as an answer calling for affirmative relief, yet is substantially sufficient as such, and had there been a plea of limitation to that matter of it, or an exception, it would have been error to decree on that matter.

Having come to the conclusion that there is reversible error, I run against the question of jurisdiction, as we must have jurisdiction to justify a reversal. No one of the creditors, except Feely, gets a sum out of the fund amounting to $100. Added they amount to more than that sum. Can they be added together for jurisdiction? The debts are distinct, have no unity; but combined they take from Feely more than the sum of $100. "Several and separate interests of different appellees cannot be united so as to make up the jurisdictional amount where such parties could not have united their interests, if a recovery had been had against them. Neither co-defendants nor co-plaintiffs can unite their separate and distinct interests for the purpose of giving appellate jurisdiction." "Separate judgments cannot be added to give jurisdiction; though the legal question may be the same, the judgments are distinct." 2 Cyc. 566, 567; Henderson v. Wadsworth, 115 U. S., p. 276. Henderson v. Wadsworth, 115 U. S. 276 applies the rule to both sides. "In suits to enforce separate liens it is the several amounts of each claim, not the aggregate sum of all in one suit, which determine the jurisdictional amount. The appellate court cannot acquire jurisdiction by uniting on an appeal two judgments wholly separate and distinct. 1 Ency. Pl. & Pr. 725. Upon these principles it was held that if several claiming under a trust deed suing the trustee for a settlement, obtain a decree directing him to pay each a separate sum, where the decree failed to charge him with an item over $100, there was no jurisdiction for appeal though the sums would aggregate over $100. Fleshman v. Fleshman, 34 W. Va 342. Several judgment creditors brought a suit to sell land to pay them which was dismissed, and they were refused right to add their judgments. Umbarger v. Watts, 25 Grat. 167. If the land owner had appealed, in case the judg ments had been decereed against his land, the same result would have followed. Wherein is this case otherwise? True, several hundred dollars is taken from Feely, but each creditor has taken his own separate sum from him; it is a contest between him