For these reasons the decree appealed from must be reversed, and a decree entered here requiring M. M. Caldwell to convey to D. F. Hall one undivided half interest in the property in the bill and proceedings mentioned, subject, however, to a lien in favor of the grantor for whatever may remain unpaid of the $290 advanced by him, after deducting therefrom the $26.78, part thereof, refunded to M. M. Caldwell by the trustee, and after crediting the remainder of said sum and its interest by the rents and profits of the property derived by M. M. Caldwell since it was conveyed to him, and further crediting the same by the fee-simple value of that half of the property owned by G. C. Caldwell.

ESTOPPEL-FAILURE TO DISCLOSE EXISTENCE OF AN UNRECORDED DEED OF TRUST. Where a judgment creditor, at the time of considering the propriety of accepting certain lots in satisfaction of his judgment, being put upon inquiry as to the right of his judgment debtor to the lots by the fact that he was not holding the recorded title, makes inquiry as to what is to be done to obtain a clear title, and the holder of the recorded title fails to disclose to him the existence of an unrecorded deed of trust held by him, and such judgment creditor accepts the lots, and receives a conveyance, the holder of the recorded title is estopped from enforcing the deed of trust.

Appeal from law and equity court of city of Richmond.

Suit between one Kelly and the Fairmount Land Company. From a decree in favor of the latter, the former appeals. Reversed.

A. W. Patterson and Geo. Bryan, for appellant. Jackson Guy, for appellee.

RIELY, J. For the purposes of this decision it may be conceded, as claimed by counsel for the appellee, that the money secured by the deed of trust which is the subject of this controversy, together with the work of grading undertaken by Clay, constituted the purchase price for the lots which the Fairmount Land Company contracted to convey to him; from which it follows that Kelly, although he has completed the grading, cannot demand a clear title to the lots until the deed of trust has been satisfied, unless the company is estopped to claim the benefit of it.

Clay not having obtained a deed to the lots at the time Kelly was considering the propri

in the city of Richmond, in satisfaction of his judgment against Clay, Kelly was put upon inquiry as to the state of Clay's right to the lots. It was incumbent upon him to ascertain from the land company what was necessary to be done or paid in order to obtain a clear title. If he omitted to make due inquiry, he could only acquire the lots subject to any incumbrance or burden upon them in favor of the company.

Recognizing this obligation, the counsel of Kelly applied to the company for information as to the state of Clay's right to the lots, and was informed by its secretary and general manager that Clay had not completed the payment for the lots, but that there was about $1,400 worth of grading still to be done before the lots would be fully paid for. The contract between the company and Clay with respect to the purchase of the lots and the payment therefor in grading was shown to the counsel at his request, and examined by him, but the deed of trust was not shown to him, nor was he then told of it.

The secretary deposed that he discussed the deed of trust on divers occasions with the counsel, but could not recollect whether it was before or after Kelly had accepted the conveyance of the lots. It is made very clear, however, by the testimony of the counsel that he first learned about the deed of trust from the secretary, but that the latter did not inform him of its existence until several months after Kelly had agreed to accept the Fairmount lots and the Richmond lots in satisfaction of his judgment, received and recorded the conveyance, and marked his judg ment satisfied.

It was further testified by the secretary on his direct examination that Kelly, before consummating the transaction as to the lots, talked with him about the state of Clay's right to them, and that they conversed about the deed of trust, of whose existence Kelly seemed to be fully informed. Kelly denied positively that the deed of trust was mentioned, or that he had any knowledge of it, and deposed that he first learned from his counsel, and with much surprise, of its existence. The testimony of the secretary upon this point is greatly impaired by the statement made on his cross-examination, when being pressed as to the knowledge of Kelly as to the deed of trust, that "Kelly may not have known of the existence of this trust deed." His testimony shows that knowledge of the deed of trust imputed by him to Kelly was rather an inference by the secretary from the fact that Kelly told him that Clay had promised to repay out of money he was getting from the company an amount Kelly had lent to Clay. It does not appear, however, that Kelly knew, or that the secretary informed him, upon what terms, or upon what security, if any, the company was letting Clay have money.

Clay testified that Kelly was aware of the

deed of trust, but it is apparent, upon considering his whole testimony, that he made no distinction between a knowledge by Kelly of a simple indebtedness of Clay to the company and a loan to him by it secured by a deed of trust on the lots. His testimony is entitled to very little weight in the effort to fasten upon Kelly actual notice of the deed of trust, and all mention of it to him by Clay was denied by Kelly.

Mr. Bryant, to whom Clay, on his failure, made an assignment, was informed of the deed of trust, and testified that he went into a calculation with Kelly, when the latter was considering the question whether he would accept the lots in Fairmount and Richmond in satisfaction of his judgment against Clay, to ascertain the value of Clay's interest in the property, there being a number of liens on the Richmond lots, and was positive that the Fairmount property was embraced in the calculation, and that the amount of grading still to be done and the deed of trust were both considered. Kelly, in his testimony, admitted that he understood from Bryant that the Fairmount Land Company had some claim against Clay, but never understood him to say anything about a deed of trust. The whole negotiation with Bryant in regard to the acceptance of the lots by Kelly in discharge of his judgment against Clay was conducted by Collins as counsel for Kelly, and the latter testified that he acquainted his counsel fully with all the information he possessed in regard to the matter. Collins was positive that Kelly never mentioned to him the deed of trust, and that when he learned from the secretary of the company of its existence, and informed Kelly of it, the latter was greatly surprised. Collins also testified that in all his negotiations as counsel for Kelly with Bryant in regard to the lots the latter never mentioned to him the deed of trust. Nor did Bryant testify that he did so. While it was the duty of Kelly, as Clay had no recorded title to the lots, to inquire of the land company what was necessary to be done or paid in order to obtain a clear title, or he would take them at his peril, it was no less the duty of the company, when inquired of, to make a full and frank disclosure. Honesty and fair dealing required that this be done. When Collins, as counsel for Kelly, asked to see the contract between the company and Clay in regard to the lots, and it was shown to him by the secretary, and he inquired what was the balance of work to be done in order to complete the contract on the part of Clay, the deed of trust not being a part of the original agreement, nor referred to in the contract, it was plainly the duty of the company, through its secretary, to inform him of it. Where a purchaser has knowledge of any fact or circumstance sufficient to put him upon inquiry as to the existence of some right or title in conflict with that which he is about to purchase, and makes the inquiry suggested by such

fact or circumstance and anything detrimental to the right he is about to acquire is concealed or withheld from him, he cannot afterwards be charged with notice of it, or be affected by an undisclosed incumbrance or latent equity. 2 Devl. Deeds, § 745; and Massie v. Greenhow, 2 Pat. & H. 255.

In the case at bar due inquiry appears to have been made, but the evidence is far from satisfactory that the unrecorded deed of trust, whose existence should have been frankly disclosed, was made known to Kelly or his counsel, or that either of them knew of it. Upon a consideration of all the testimony, our conclusion is to the contrary. The effect of want of notice of the deed of trust was to mislead Kelly and his counsel. It induced him to accept property in discharge of his debt, which he testified that he would not have thought of doing under any circumstances if he had known of the deed of trust, and which his counsel testified no less positively that he could have never thought of advising. If the company were now allowed to enforce the deed of trust, then Kelly accepted property for valuable consideration, which is wholly without value to him. Under the circumstances shown by the testimony, it would be inequitable to allow the deed of trust to be enforced. The loss must be borne by the company, to whose conduct and omission of duty it is due.

The lots in Fairmount, though valued at $4,160 when Clay contracted with the land company for them, were worth, when Kelly took them, according to the great preponderance of the testimony, scarcely over, if at all, half that amount; so that, although Kelly completed the grading for $1,200, the cost of the lots would greatly exceed their value, if, in addition to the completion of the grading, he had also to discharge the deed of trust for $1,855. In such case the interest of Clay in the lots was of no value whatever, and there could have been no possible inducement to Kelly to accept them in payment of his judgment. The testimony shows that their market value was particularly inquired into by the counsel of Kelly before advising his client to consummate the transaction, and it is inconceivable that, with the knowledge he had acquired as to the value of the lots, he could have advised Kelly to take them, or that Kelly would have accepted them, along with the lots in Richmond, in discharge of his judgment.

The decree appealed from must be reversed, and this court will enter such decree as the lower court ought to have entered.

(97 Va. 334)

PRICE v. WALL'S EX'R. (Supreme Court of Appeals of Virginia. July 6, 1899.)

DEEDS-EFFECT OF FAILURE TO RECORDCREDITORS-EQUITY.

1. Code, § 2465, providing that, so long as & deed remains unrecorded, it shall not affect

"subsequent purchasers for value, and creditors," applies to all creditors, and not to subsequent creditors only.

2. Under Code, § 2465, providing that an unrecorded deed shall not affect the rights of creditors, a judgment against a grantor, docketed between the time of delivering the deed and the time of recording it by the grantee, is a lien on the property, notwithstanding the grantee had parted with the consideration.

Appeal from circuit court, Montgomery county.

Action by Wall's executor against Price. From a decree for plaintiff, defendant appeals. Affirmed.

Hoge, Wilson & Hoge, for appellant. J. C. Wysor and Longley & Jordan, for appellee.

HARRISON, J. The question raised by the petition for appeal in this case is whether a tract of 59 acres of land is liable to the satisfaction of a judgment in favor of the appellee, and other judgments reported as liens thereon.

It appears that appellant and his wife, by deed dated September 3, 1889, conveyed, in consideration of $1,500, to M. S. Price, a tract of land containing 29 acres. This deed was recorded October 5, 1889. It further appears that on the same day, September 5, 1889, M. S. Price and wife conveyed, in consideration of $900, to appellant, a tract of land containing 59 acres. This deed was not recorded by the grantee until January 3, 1896. The evidence shows that this was a mere exchange of lands; M. S. Price paying to appellant $600, the difference in value between the two tracts. It further appears that appellee obtained on November 26, 1894, against M. S. Price, a judgment for $3,600, which was docketed December 14, 1894. In brief, the established facts are that the judgment of appellee was docketed December 14, 1894, and that the judgment debtor appeared at that time, by title of record, to be the owner of both the 29 and the 59 acre tracts of land, although he had, as already seen, conveyed by deed dated September 3, 1889, to appellant, the 59-acre tract.

It further appears that the appellee has subjected the 29-acre tract to the payment of his judgment, leaving a balance thereof unpaid, and now seeks to subject the 59 acres to the satisfaction of the residue.

His right to this relief is denied by appellant, who contends that the debt upon which the judgment was obtained was contracted prior to the date of his unrecorded deed, and that section 2465 of the Code provides that an unrecorded deed is void only as to subsequent creditors.

This construction of the section referred to is wholly untenable. The change in the position of the word "creditors" in that sec tion was not to effect a modification of the law, but it was made in order that the words "without notice" might more clearly refer to purchasers alone, and not to cred

itors as well, and in order that there might be no apparent conflict between the language of the statute and the decisions of this court previously made. Eidson v. Huff, 29 Grat. 338; March v. Chambers, 30 Grat. 299; Dobyn's Adm'x v. Waring, 82 Va. 159. There has been no change in the law since the cases cited were decided. Now, as then, the statute declares an unrecorded deed void as to all creditors who but for the deed would have had a right to subject the property conveyed to their debts.

It is further contended by appellant that inasmuch as this was an exchange of land, and appellee has already subjected one of the tracts to the satisfaction of his judg ment, equity will not permit him to assert his lien as to the other.

Its being an exchange of land is a matter of no consequence. The rights of the parties are not affected by the character of the consideration for the unrecorded deed. So far as appellee is concerned, it is immaterial whether the consideration for the land in question was money, or its equivalent in other land. Appellant having failed to record his deed as provided by law, the land conveyed thereby is bound by the lien in question as effectually as if the judgment debtor had never parted with it.

This is the express mandate of the law, and equity has no power to afford relief without destroying the registration laws.

The law pointed out to appellant a plain and simple duty,-that of promptly recording the evidence of his title. Having failed to perform that duty, he must bear the loss its neglect has occasioned.

For these reasons, the decree appealed from must be affirmed.

(97 Va. 349) MARTIN et al. v. SOUTH SALEM LAND CO. et al.

(Supreme Court of Appeals of Virginia. July 11, 1899.)

JOINT-STOCK COMPANIES SUBSCRIPTIONSENFORCEMENT-PRACTICE-STATUTESCONSTRUCTION.

1. In a suit by creditors of a joint-stock company against the stockholders to compel pay. ment of subscriptions, the decree declared the subscriptions valid, fixed the stockholders' liability, determined the rights of the creditors, and directed an assessment and the issuance of execution therefor against each stockholder, reserv ing the right to make further assessments, if necessary. Held a final decree on the merits, so that the subsequently passed Acts 1897-98, p. 16, regulating procedure in such cases, did not apply.

2. If two constructions may be given a statute, one within and the other without the legislative power, the courts will declare that construction which gives validity to the statute.

3. In a suit by creditors of a joint-stock company against the stockholders to compel payment of subscriptions upon a return of "No effects" on an execution issued against a stockholder for an assessment, the court need not ascertain whether the delinquent owns real estate, and, if so, subject it to the assessment, before

making a further assessment, but it may treat the delinquent as insolvent, in determining what additional assessment is necessary.

Appeal from circuit court, Roanoke county. In a suit by creditors against the South Salem Land Company and its stockholders, a decree was passed in favor of complainants, and Thomas S. Martin and others appeal. Affirmed.

S. Griffin, Eppa Hunton, Jr., Watts, Robertson & Robertson, Scott & Staples, Maury & Maury, M. M. Gilliam, and Rixey & Barbour, for appellants. A. A. Phlegar, A. B. Pugh, and L. C. Hansbrough, for appellees.

BUCHANAN, J. The first error assigned is that the circuit court had no right to enter a decree against the defendants for the 30 per cent. additional assessment upon the capital stock of the company, but should have directed its receivers to sue at law, under the act of assembly approved December 22, 1897 (Acts Assem. 1897-98, p. 16).

Section 1 of that act provides that: "All suits or motions for the recovery of unpaid subscriptions to the stock of any joint stock company shall be brought in the courts of common law of this commonwealth in the county or corporation where the defendant resides, if he be a resident of this state, or in the case of a joint or partnership subscription, then in the county or corporation in this state in which either of the joint subscribers or any membership of the partnership subscribing shall reside; and said courts shall have exclusive jurisdiction to hear and determine all questions involving the validity of such subscriptions, but nothing herein contained shall be construed to deprive courts of chancery of their jurisdiction to settle and wind up the affairs of insolvent corporations or to make assessments on unpaid stock subscriptions."

By section 2 it is provided that: "In all cases where it is necessary to resort to a court of equity for the purposes aforesaid, the courts shall direct the trustee, assignee, or receiver, as the case may be, to sue at law, when necessary to recover any call or assessment, and the defendant shall be entitled to a jury where the amount involved exceeds twenty dollars, and said suits shall be governed in all respects by the provisions of this act. All pleas, defenses, and evidence which would be admissible if the company were solvent shall be equally admissible and shall have the same effect in law in any action brought after the insolvency of any such company, except where the defense relied upon is an agreement on the part of the corporation not to assess the face value of the stock subscribed, and such agreement was unknown to the creditor at the date of his contract; and this act shall apply to all suits heretofore or hereafter brought where no final judgment or decree on the merits has been rendered."

The provisions of the act, by its terms, apply, not only to cases brought after the passage of the act, but also to cases then pending where no final judgment or decree on the merits had been rendered. This suit was then pending, and had been since the year 1892. Whether the circuit court erred in rendering the decree complained of depends upon the character of the decree which had been entered in the case before the act of assembly relied on was enacted.

By a decree rendered at the September term, 1894, the validity of the stock subscriptions of the appellants and the other subscribers had been determined, their liability fixed, an assessment of 20 per cent. made on their subscriptions, and an execution directed to issue against each stockholder for the sum assessed upon his stock; the court expressly reserving the right (which it would have had without the reservation) to make further assessments if it became necessary to satisfy the debts proved in the case, and for the payment of which the unpaid stock subscriptions had been held to be liable. That decree, on appeal to this court, was affirmed, and the cause remanded for further proceedings. Martin v. Land Co., 94 Va. 28, 26 S. E. 591.

The chief object of the act in question was to deprive courts of equity of jurisdiction to determine the validity of subscriptions to the stock of joint-stock companies, and to give subscribers the right of trial by jury in actions at law in all such cases, whether thereafter brought or then pending, unless the proceedings in the pending case had proceeded so far that a decree upon the merits of the case had been rendered, and the rights and liabilities of the parties fixed. If such a decree had been rendered, then the court of equity proceeded with the case as if the statute had never been passed.

That the decree in this case is a "final decree on the merits" is, in our opinion, quite clear. It not only settles the principles of the cause, but it determines the rights of the creditors, the validity of the stock subscriptions of the appellants, and of the other subscribers to stock, and their liability to pay the same, as far as may be necessary to satisfy the demands of creditors; and what remains to be done in the case, as was said upon the former appeal, in which the court considered the character of the decree in question, is merely to execute and give effect to it.

To hold that the legislature intended that in all such cases where there had not been a final decree, in the technical sense of that term, there should be a trial by a jury, in which the matters litigated or settled in the chancery cause might be relitigated after a court of competent jurisdiction had passed upon and determined the rights and liabilities of the parties, would be to impute to the legislature an intention to do what it had no power to do; and that, too, when the language used is capable of a construction

which shows that it only intended to do what was within its power. Nothing is better settled than that, if two constructions may be given a statute, one of which is clearly within and the other without the legislative power, the courts will hold that it intended to do that which it had the right to do, and not that which was beyond its power. Martin v. Land Co., supra (page 37, 94 Va., and page 593, 26 S. E.).

It is claimed that the circuit court erred in making another assessment upon those stockholders who had paid the first assessment, without further effort on the part of the receivers to collect the assessment made against the stockholders who had not paid, and who for that reason were regarded as insolvent.

Executions were issued as provided in the decree of the September term, 1894. Of these, many were returned, "No effects." AfterIwards the court directed one of its commissioners to ascertain which of the stockholders were solvent, what further assessment would be necessary to pay the debts theretofore decreed to be paid, and what amount should be assessed against them. The commissioner reported that it was almost impossible for him to state which of the stockholders were solvent, but that, in his opinion, all those who had made payments to the receiver were solvent, and all against whom executions had been issued, and returned "No property found," were insolvent,-at least, as to their personal property. He further reported that it would require an additional assessment of 30 per cent. to raise a sum sufficient to satisfy the debts decreed to be paid, and the costs that would be incurred in the case. This report was excepted to upon several grounds, one of which was that no further assessment should be made against the stockholders who paid the assessments theretofore made until the assets of all the stockholders who had not paid had been exhausted, and because no report had been made as to what real estate or other property is owned by the delinquent stockholders. Those exceptions were overruled, and the report confirmed; and, in so doing, we do not think the court erred, under the facts of the case. The return of "No effects" upon the execution issued against a stockholder was prima facie evidence at least that he had no assets out of which the debt could be made; and, in the absence of any legal evidence that he owned property out of which the execution could be satisfied, the court was justified in treating such stockholder as insolvent, in determining what additional assessment would be necessary. If the stockholders who had paid had reason to believe that the delinquent stockholders had property which could be subjected to the payment of the execution against them, that fact should have been brought to the attention of the court.

In the case of Godfrey v. Terry, 97 U. S. 171, a joint decree had been rendered against stockholders of a bank, when their liability

was several, and not joint. The court held that this was error. Mr. Justice Miller, in delivering the opinion of the court, stated that the proper practice in such a case was to ascertain "the sums due from each stockholder, give a decree nisi, with time for each man to pay the sum assessed. Against such as did not pay, let execution issue; and, if nulla bona was returned, there must be a new assessment against the others until all is paid, or the sum of the several liabilities exhausted."

If it were conceded, as the counsel for the appellants insist, that the relation between the stockholders and the company was that of principal and surety, and as between themselves that of co-sureties, it does not follow that the court should have ascertained whether or not the delinquent stockholders were the owners of real estate, and, if so, have subjected it to the payment of the amounts decreed against them, respectively, before making a further assessment.

It is true, as a general rule, as counsel for appellants insist, that a court of equity, in enforcing a judgment lien against the lands of the principal and his sureties, will respect the equities of the parties inter sese, and administer them upon principles peculiar to that forum, as far as it can be done without too great delay, and without prejudice to the rights of the creditor. Horton v. Bond, 28 Grat. 815; Wytheville Crystal Ice & Dairy Co. v. Frick Co., 96 Va. 141, 30 S. E. 491.

This suit was not brought to subject the lands of the stockholders to the payment of the principal's debt, but to compel them to pay their stock subscriptions, as far as might be necessary to satisfy the debts of the creditors after the other assets of the company had been exhausted. The creditors had at that time no lien upon the real estate of the stockholders. Such liens as they or the receivers have acquired result from the decrees rendered in this cause, and cannot be enforced against the real estate of the stockholders, except by an amended and supplemental bill for that purpose (if that be permissible), or by instituting new suits against the delinquent stockholders. To compel the creditors to wait for their money until such proceedings as these could be taken, with all the delays that usually attend creditors' suits in taking accounts, in bringing in lienors, in making sales and resales, would result in very great delay and prejudice to the creditors. It would postpone them indefinitely in the collection of their debts. The doctrine invoked by the appellants will not be carried to that extent. Bell v. McConkey, 82 Va. 176.

We are clearly of opinion that there is no error in the decree complained of, to the prej udice of the appellants, and that it should be affirmed.

KEITH, P., absent, was a party to the suit in the lower court.