SHEWMAKER v. YANKEY.1 (Court of Appeals of Kentucky. Jan. 16, 1902.)

MARSHALING SECURITIES-ASSIGNMENTS FOR CREDITORS COSTS OF SETTLEMENT - APPEAL CORRECT RESULT REACHED BY ERRONEOUS METHOD.

1. In distributing an assigned estate the court will not marshal securities where it will prejudice general creditors to do so, and therefore where a creditor of a debtor who had made an assignment for benefit of creditors held the third of four mortgages on one tract of land and the only mortgage on another tract, it was error to require him to exhaust the proceeds of the second tract before sharing in the balance of the proceeds of the first tract after satisfying the first two mortgages, as his debt should instead have been placed pro rata upon such balance and upon the proceeds of the second tract, the balance of the proceeds of the first tract going to the fourth mortgagee, and the balance of the proceeds of the second tract going to the assignee for creditors generally.

2. The costs of the suit for a settlement of the trust must be paid out of the general fund, if sufficient for that purpose, but, if not, then to the extent it is insufficient such expenses as were necessary to the settlement of the right of the creditors, including the mortgagees, may be paid out of the fund adjudged the fourth mortgagee.

3. Though the chancellor, in distributing an assigned estate, has applied erroneous principles, yet, where he has reached practically the same result he would have reached if correct principles had been applied, his judgment will not be disturbed.

Appeal from circuit court, Washington county.

"Not to be officially reported."

Action by John S. Yankey, assignee of John Shewmaker, against Uriah Shewmaker and others, for a settlement of the assigned estate. From the judgment distributing the estate, Uriah Shewmaker appeals, and the assignee prosecutes cross appeal. Affirmed.

C. C. McChord, for appellant. W. C. McChord, for appellee.

HOBSON, J. John Shewmaker made a deed of assignment of all his property to John S. Yankey, in trust for the benefit of his creditors. Yankey, as assignee, filed this suit in the Washington circuit court for the

1 Reported by Edward W. Hines, Esq., of the Frankfort bar, and formerly state reporter.

66 S.W.-1

settlement of the trust. In the progress of the case the following facts were developed: The assigned estate consisted of three tracts of land, one containing 200 acres, another 25 acres, and the third 6 acres. On the first tract, from which was realized $1,704.38, there was a mortgage lien to Arena Peter for $657.54; also a second mortgage to James W. Shewmaker for $317.87; and, subject to these, a third mortgage to James W. Shewmaker, Cal Shewmaker, and Frank Shewmaker for $735. This third mortgage also included the second tract of 25 acres, from which was realized $558.66. There was also a fourth mortgage to appellant, Uriah Shewmaker, for $679.28, on the first tract, which was subordinate to the other three mortgages. The third tract, which sold for $288.12, was unincumbered. The sheriff of the county filed in the action a claim for taxes, which was controverted, but was allowed by the court on October 31, 1898, and adjudged to be a preferred claim against the estate, but subordinate to the mortgage debts. The cost of the assignee, including his attorney's fee of $150, amounted to $275. There not being money enough to pay all the claims, the court ordered the money to be paid out as follows: First, the mortgage debt of Arena Peters, $657.54; second, the cost of the suit, $275; third, the taxes, $151.45; fourth, the mortgage debt of James W. Shewmaker, $317.87; fifth, the mortgage debt of James W., Cal, and Frank Shewmaker, $735; sixth, the mortgage debt of Uriah Shewmaker, to the extent of the balance of the fund. This left a deficit in the payment of that debt of about $300 or $400. From this judgment Uriah Shewmaker has appealed, and the assignee prosecutes a cross appeal.

It will be seen that on the first tract of land, which brought $1,704.38, there were the following liens: Arena Peter, $657.54; James W. Shewmaker, $317.87; James W., Cal, and Frank Shewmaker, $735; Uriah Shewmaker, $678.28,-total, $2,389.69. The court required James W., Cal, and Frank Shew

maker to exhaust their mortgage on the second tract before resorting to the first tract, and thus reduced the amount of lien against the first tract to the difference between $2,

By this

389.69 and $558.66, or $1,831.03. method nothing was left for the payment of the unsecured creditors, after the payment of the costs. In fact, there were not enough assets to pay the costs and the taxes, and a considerable loss was thrown upon Uriah Shewmaker, of which he complains, insisting that he should not be made to bear the entire loss. The first question to be determined in the case is the right of James W., Cal, and Frank Shewmaker to exhaust the second tract before collecting any of their debt out of the first tract. The second tract was incumbered in no way, except by their mortgage. The remainder of its proceeds, after the payment of this debt, as well as the proceeds of the third tract, were assets for the payment of the general creditors, and passed to the assignee under the deed of assignment. In 3 Pom. Eq. Jur. § 1414, the rule is thus stated: "The general rule is that, if one creditor, by virtue of a lien or interest, can resort to two funds, and another to one of them only,as, for example, where a mortgagee holds a prior mortgage on two parcels of land, and a subsequent mortgage on but one of the parcels is given to another, the former must seek satisfaction out of that fund which the latter cannot touch. If, therefore, the prior creditor resorts to the doubly charged fund, the subsequent creditor will be substituted, as far as possible, to his rights. These rules must be taken with the modifications and exceptions that in their application the paramount incumbrancer shall not be delayed or inconvenienced in the collection of his debt, for it would be unreasonable that he should suffer because some one else has taken imperfect security; that the rights of third parties shall not be prejudiced; and that the parties themselves are creditors of the same debtor." So, in Logan v. Anderson, 18 B. Mon. 119, after stating the general rule, this court said: "But equity refuses to marshal securities where, in aiding one incumbrancer, it would injure another, or trench upon the rights or operate to the prejudice of the party entitled to the double fund." "As a general rule, the debts of a mortgagee who has more than one security will be thrown upon all his securities ratably pari passu, according to the value, and thus leave the residue of each to satisfy the other incumbrancers to whom it is specially mortgaged." Under these principles the whole of the mortgage debt of James W., Cal, and Frank Shewmaker should not have been charged to the sec ond tract. After paying the two prior mortgages on the first tract, there was a balance of its proceeds of something over $700, and the mortgage debt of James W., Cal, and Frank Shewmaker should have been placed pro rata upon this fund and the proceeds of the second tract. The balance of the proceeds of the first tract should have been adjudged to Uriah Shewmaker, and the balance of the proceeds of the second tract should have gone to the assignee. The assignee, un

der his deed of assignment, took all the title to the land then in his assignor in trust for the general creditors. They thereby acquired a lien on this estate for the payment of their debts, and the assignee had a lien on it for his necessary costs of the administration. After this deed was made, the general creditors could not protect themselves by taking out an execution or attachment and levying it on the second tract, subject to the mortgage then on it. It is very clear that, if they had made such a levy before the deed of assignment was executed, the securities could not be marshaled so as to defeat their lien by throwing the entire burden of the mortgage held by James W., Cal, and Frank Shewmaker on that tract. The same effect must be given to the deed of assignment that would be given to an execution levied by a creditor or to a mortgage made to him by the debtor at the time the assignment was executed; otherwise the assignment would only tie his hands, preventing him from protecting himself without securing his interest in any way.

It is unnecessary for us to determine the questions made in regard to the payment of the taxes, as appellant is not affected thereby; for of the proceeds of the second tract the balance unincumbered is sufficient for the payment of this claim.

The costs must be paid out of the general fund, if sufficient for that purpose. If it is insufficient, such expenses as were necessary to the settlement of the rights of the creditors, including the mortgagees, may be paid out of the fund adjudged Uriah Shewmaker to the extent that the general estate is insufficient to pay this cost. Loth v. Carty, 85 Ky. 591, 4 S. W. 314.

Although the circuit court proceeded on different principles, he seems, in the end, to have reached practically the same result as a settlement made on the principles we have indicated. The judgment is therefore affirmed on the original and cross appeal.

WINTERSMITH v. PRICE et al.1 (Court of Appeals of Kentucky. Jan. 15, 1902.) OCCUPYING CLAIMANTS-COMPENSATION FOR

IMPROVEMENTS.

Ky. St. 3728, giving a lien for improvements to an unsuccessful occupying claimant the foundation of whose claim is "a public record," applies only to one who claims to derive title from the commonwealth.

Appeal from circuit court, Hardin county. "Not to be officially reported."

Action by Maggie Wintersmith against Robert Price and another to recover land. Judgment for defendants, and plaintiff ap peals. Reversed.

J. P. O'Meara, for appellant. R. L. Stith, for appellees.

1 Reported by Edward W. Hines, Esq., of the Frankfort bar, and formerly state reporter.

WHITE, J. The appellant is the owner of a lot in Elizabethtown, and while she resided in Louisville, Ky., this lot was sold and conveyed to appellee Price by one Brown, and under this deed the appellee Price took possession of the lot, and built a house thereon. Appellant, upon learning of this sale and conveyance, instituted this action of ejectment against Price. For defense Price pleaded the occupying claimant's statute for the value of his improvement, not in any way claiming title in himself, or that Brown had title of any sort. The court rendered judgment for the land, but before awarding to appellant possession thereof adjudged that appellee Price should recover the value of his improvements, fixed by the judgment at $100, which the court adjudged to be a lien on the land. It further appears that the lot was sold to satisfy this judgment, and brought less than the claim against it, the appellee Price being the purchaser. The record contains no bill of exceptions as to the proof of the value of the improvement. Appellant seeks a reversal of the judgment allowing appellee Price pay for his improvement as an occupying claimant. Section 3728, Ky. St.,being the section as to occupying claimants,reads: "If any person believing himself to be the owner, by reason of a claim in law or equity, the foundation of which being a public record, hath or shall hereafter peaceably seat and improve any land, but which land shall, upon judicial investigation, be decided to belong to another, the value of the improvements shall be paid by the successful party to the occupant, or the person under whom and for whom he entered and holds, before the court rendering judgment or decree of eviction shall cause the possession to be delivered to the successful party." It is under this statute that appellee claims compensation for the enhanced value of the land by reason of the improvements. This statute has been in existence for many years, and in the case of Fairbairn v. Means, 4 Metc. 323, after a review of all previous cases under the statute, this court said: "The appellees having failed to arrive at the foundation contemplated by the statute, having failed to deduce a title from the commonwealth, and having held the land, not under Bryant's patent, but under Young's deed, and adversely to Bryant's title, their case is not within the statute." In the case at bar there is no pretense that appellee's title was deducible from the commonwealth; indeed, his only claim of title was his deed from Brown, who had no title of record. Appellee's answer and plea fails to show him to be within the statute, and it is therefore insufficient to support the judgment for improvements. Upon the pleadings, and in the absence of a bill of exceptions, the judgment for the value of the improvements appears to be erroneous.

For the reasons stated, the judgment awarding to appellee compensation for his

improvements is reversed, and cause remanded, with directions to award appellant a writ of possession for the land, and for proceedings consistent herewith.

COMMONWEALTH ▾. HOVIOUS.1 (Court of Appeals of Kentucky. Jan. 14, 1902.) DRUGGISTS-SALE OF DRUGS BY UNREGISTERED PHARMACIST-RIGHT OF PHYSICIAN TO SELL DRUGS.

Under Ky. St. § 2620, prohibiting the selling or compounding of drugs, except by a registered pharmacist, and section 2632 (part of same act), providing that "nothing in this act shall apply to, or in any manner interfere with the business of any licensed practicing physician, or prevent him from supplying to his patients such articles as may seem to him proper, or with his compounding his own prescriptions, while a regular physician may sell drugs to his own patients, he is subject to the penalty prescribed if, not being a registered pharmacist, he fills prescriptions sent to him by others.

Appeal from circuit court, Russell county. "To be officially reported."

An indictment against R. D. Hovious was dismissed, and the commonwealth appeals. Reversed.

R. J. Breckinridge and N. H. W. Aaron, for the Commonwealth.

GUFFY, C. J. The appellee was indicted by the grand jury of Russell county, charged with a violation of section 2620, Ky. St., which reads as follows: "Drugs not to be Sold or Compounded, Except by Registered Pharmacist-Penalty: Any owner of a pharmacy, or retail drug store, who, not being a registered pharmacist, shall fail or neglect to place in charge of such pharmacy or drug store a registered pharmacist, or any such proprietor who shall by himself, or any other person, permit the compounding or dispensing of prescriptions, or the vending at retail of drugs, medicine, poisons, or pharmaceutical preparations in his store or place of business, except by or in the presence and under the immediate supervision of a registered pharmacist, shall be deemed guilty of a misdemeanor and upon conviction thereof, shall be liable to a fine of not less than twenty. five nor more than one hundred dollars and each week that he shall cause or permit such pharmacy or retail drug store to be so conducted or managed shall constitute a separate and distinct offense and render him liable to separate prosecution and punishment therefor." The law and facts were submitted to the court, a jury trial being waived. The court found as a fact that the defendant carried on the business of a retail druggist in person and by his agent, Kimble; but the court was of opinion that as the defendant was a regular, licensed physician, he had the right to carry on the business of a retail druggist and pharmacist

1 Reported by Edward W. Hines, Esq., of the Frankfort bar, and formerly state reporter.

without obtaining the certificate required by law of pharmacists. The court was of the opinion that the law authorized a pharmacist to have a clerk not a pharmacist to carry on his business, and was of the opinion that a licensed practicing physician might also have a clerk to sell drugs by retail in his absence, and thereupon dismissed the indictment; and the motion for a new trial by the commonwealth having been overruled, it prosecutes this appeal.

Section 2632, c. 85, Ky. St., reads as follows: "Persons and Articles Exempt from Operation of This Act: Nothing in this act shall be construed so as to apply to, or in any manner interfere with, the sale of the usual non-poisonous domestic remedies and medicines, and patent or proprietary medicine, by country stores in small places or rural districts. Nothing in this act shall apply to, or in any manner interfere with the business of any licensed practicing physician, or prevent him from supplying to his patients such articles as may seem to him proper, or with his compounding his own prescriptions." It seems from the opinion of the circuit court that the court was of the opinion, and so adjudged, that the provisions of the lastnamed section of the statute entitled a 11censed, practicing physician to keep, sell, and compound drugs as a retail druggist, without any other license. The contention of appellant is that the section in question only permits such physician to sell or furnish to or compound drugs for his own patients. It will be seen from the section supra that it does not, simply in general terms, exempt physicians from the provisions of section 2620. We are of the opinion that the true meaning and intent of section 2632 is to allow a physician to compound or sell any kind of drugs to his own patients, but not to fill prescriptions sent to him by others. In other words, if a party applies to a physician for examination and treatment, the physician may furnish him any kind of drugs that in his judgment is proper, or compound for him any kind of drugs or medicine; but he cannot sell drugs indiscriminately to persons calling for the same, nor compound drugs and sell them indiscriminately to all who may call for them.

It results from the foregoing that the circuit court erred in adjudging the defendant not guilty. The judgment is therefore reversed, and the cause remanded for proceedings consistent herewith.

VAN VACTOR'S ADM'X v. LOUISVILLE & N. R. CO.1

(Court of Appeals of Kentucky. Jan. 8, 1902.) DEATH-ACTION FOR CAUSING-LIMITATIONINFANCY OF WIDOW AND CHILD. As the right of action to recover for the death of a person from an injury inflicted by

1 Reported by Edward W. Hines, Esq., of the Frankfort bar, and formerly state reporter.

negligence is by Ky. St. § 6, vested in his personal representative, and the period within which such an action may be brought is limited to one year from the death, the fact that the widow, who subsequently qualified as personal repre sentative, and the only child of the intestate, were both infants at the time of his death, did not extend the period of limitation beyond one year from the death.

Appeal from circuit court, Bullitt county. "To be officially reported."

Action by the administratrix of William A. Van Vactor against the Louisville & Nashville Railroad Company to recover damages for the death of plaintiff's intestate. Judgment for defendant, and plaintiff appeals. Affirmed.

S. M. Payton, for appellant. B. D. Warfield, Fairleigh, Straus & Eagles, and Edward W. Hines, for appellee.

HOBSON, J. William A. Van Vactor was injured in appellee's service on February 28, 1899. He died of these injuries on August 28, 1899, leaving surviving him his widow, who was an infant, and an infant child two years old. The widow became of age on August 20, 1900. On October 22, 1900, she qualified as administratrix of her husband's estate, and on November 30, 1900, she filed this suit to recover of appellee damages for the loss of his life, charging that his injury was by reason of the negligence of appellee and its servants. The circuit court dismissed the petition on the ground that the cause of action was barred by limitation, the suit not having been filed within one year from the death of the intestate.

The ruling of the court below is in accord with the case of Carden v. Railroad Co., 101 Ky. 115, 39 S. W. 1027. That case was followed in Railroad Co. v. Kelley's Adm'r (Ky.) 48 S. W. 993, and was approved in Railroad Co. v. Brantley's Adm'r (Ky.) 51 S. W. 585. It is insisted, however, for appellant that these cases do not apply, because the widow of the intestate and his child were both infants at the time the cause of action accrued, and the disability of the widow was not removed until a few months before the suit was filed. Section 2525, Ky. St., is relied on, which provides that, "if a person entitled to bring" any of the actions mentioned in the third article of the chapter was at the time the cause of action accrued an infant, the action may be brought within the like number of years after the removal of such disability. But this section has no application, for neither the widow nor the infant child was "entitled to bring" the action. The cause of action to recover for the death of a person from an injury inflicted by negligence is, by section 6, Id., vested in his personal representative. The infancy of persons who were not entitled to bring the action can have no effect upon the running of the statute. The cases above referred to rest upon the construction of the statute that the suit must be commenced within one

year from the time of the death of the person injured.

Judgment affirmed.

BLACKBURN v. THOMPSON et al.1 (Court of Appeals of Kentucky. Jan. 14, 1902.) HUSBAND AND WIFE-CONDUCT OF BUSINESS BY HUSBAND AS WIFE'S AGENT-PROPERTY PURCHASED WITH PROFITS SUBJECT ΤΟ HUSBAND'S DEBTS.

Where the wife's success in business was due to the skill and industry of her husband, who conducted the business as her agent, real estate purchased with the profits of the business was subject to the husband's debts.

Appeal from circuit court, Ballard county. "Not to be officially reported."

Action by Thompson, Wilson & Company against Mollie J. Blackburn to enforce a judgment. Judgment for plaintiffs, and defendant appeals. Affirmed.

Bugg & Wickliffe, for appellant. Wm. Dance, for appellees.

BURNAM, J. The appellees, Thompson, Wilson & Co., recovered judgment against Henry Blackburn, the husband of the appellant, Mollie J. Blackburn, upon which execution issued, which was returned "No property found." They then instituted this action under section 439 of the Civil Code, to subject to the payment of their debt a house and lot to which the appellant, Mollie J. Blackburn, held the legal title, and which appellee alleges was purchased and paid for by the husband, and the title taken to the wife, for the fraudulent purpose of cheating his creditors. The appellant, Mollie J. Blackburn, filed her separate answer, in which she denied that her husband had any interest in the property sought to be subjected, and says that all the money used in its purchase belonged to her, and denied that the title was taken in her name for the purpose of defrauding her husband's creditors. Upon final submission the circuit Judge held the property liable for appellees' debt, and from that judgment the defendant appeals.

The evidence discloses that Henry Blackburn was engaged in the saloon business for three or four months in the city of Cairo, Ill., about a year before his wife opened a saloon in Wickliffe, Ky., and that while so engaged he contracted the debt which is the basis of appellees' judgment, and that he failed to pay any part thereof, and that they sued for and recovered their judgment after his removal to Kentucky. It is also shown that he is a professional saloon keeper, and a most admirable business man; that after his wife began business in Wickliffe he had entire charge of the business; his wife did not pretend to run the saloon; she was never in the house but twice after the saloon was

1 Reported by Edward W. Hines, Esq., of the Frankfort bar, and formerly state reporter.

opened, and then on Sunday, when it was closed. Her husband paid the license fee of $1,000 both years. He negotiated and paid for the lot, and contracted with the builders to erect thereon a comfortable brick house, which cost in the neighborhood of $2,500. Both of them testify that the wife was without means when she began 'business in Wickliffe, but that she borrowed $1,200 from a cousin of her husband, who resided in Tennessee, with which to pay the license for the first year, and that the business yielded in profits the first year between $3,000 and $4,000; and that the property sought to be subjected was paid for out of these profits. There can be no doubt that her business success was largely, if not wholly, due to the intelligent supervision and industry of her husband. It was held in Gross v. Eddinger, 85 Ky. 168, 3 S. W. 1, where the facts were very similar to those in the case at bar, that the husband's creditors were entitled to subject to the payment of their debt a lot purchased with the profits of a business conducted by the husband as agent for the wife, the title to which was in the wife. And in Brooks-Waterfield Co. v. Frisbie, 99 Ky. 131, 35 S. W. 106, 59 Am. St. Rep. 452, it was held that the creditors of an insolvent husband were entitled to subject to the payment of their debt the increase in the value of the wife's property, which was chiefly due to the skill, energy, and labor of the husband. In Moran v. Moran, 12 Bush, 303, it was held that the creditors of an insolvent husband were entitled to subject all that he might be able to earn in excess of what was necessary for the reasonable support of himself and family to the payment of their debts, notwithstanding the fact that it had been invested in property in the wife's name. And the same ruling was followed in Edelmuth v. Wybrant (Ky.) 53 S. W. 528.

The evidence in this case does not warrant a reversal of the judgment appealed from. Judgment affirmed.

LOUISVILLE & N. R. CO. v. MILLER.1 (Court of Appeals of Kentucky. Jan. 10, 1902.) COURT OF APPEALS-POWER TO ISSUE WRIT OF PROHIBITION-CONTEMPT IN VIOLATING INJUNCTION-CONSTRUCTION OF ORDER OF

INJUNCTION.

1. The court of appeals has jurisdiction to issue a writ of prohibition to restrain a trial court from proceeding to enforce an order adjudging a defendant to be in contempt, and imposing a fine for an alleged violation of an order of injunction, where the act complained of is not within the order, fairly construed.

2. Where a railroad company was required by mandatory injunction to receive at any of its stations in Kentucky, and to "bill," transport, transfer, switch, and deliver in the customary way at a certain point of physical connection between the tracks of said company and anoth

1 Reported by Edward W. Hines, Esq., of the Frankfort bar, and formerly state reporter.