
    Richmond.
    E. C. Malarkey v. J. G. Ballard.
    November 15, 1923.
    1. Liens—Equitable Liens—General Rule.—Every express executory agreement in writing, where by the contracting party sufficiently indicates an intention to make some particular property, real or personal, or fund, therein described and identified, security for a debt or other obligation creates an equitable lien upon the property so indicated which is enforceable against the property. Under like circumstances a mere verbal agreement may create a similar lien upon personal property.
    2. Liens—Equitable Liens—Creation of Lien—Case at Bar.—In the instant ease one B was adjudicated a bankrupt. His assets were sold and bought by complainant from the trustee in bankruptcy. Thereafter the chattels thus bought, consisting of machinery, lumber, materials, etc., were delivered by complainant to B and B agreed to pay complainant from the use and sale of the chattels the amount which they had cost complainant, plus a sum which B already owed complainant, and further agreed to replace all goods and chattels disposed of by him with goods and chattels of like quality and value; that the title was to remain in complainant until the indebtedness was fully paid, and that B was to furnish complainant from; time to time with an itemized statement of the property sold. Defendant entered into a copartnership with B with full knowledge and notice of this agreement.
    
      Held: That complainant had an equitable lien upon the property which he could assert against defendant, who upon the death of B took over the assets of the partnership and assumed its liabilities.
    3. Bill of Review—Newly Discovered Evidence—Diligence.—An applicant for a bill, of review on the ground of after-discovered evidence, knew before he asked for a rehearing that the witnesses had knowledge of material facts and his only excuse for going to trial without producing them was that he did not know where they were, or what would be the character of their testimony, the applicant did not disclose in detail what efforts he made to locate these material witnesses during a period of nearly three years, but it appeared that after the adverse decree his efforts to locate the witnesses were promptly successful. The applicant had not asked for a continuance to secure these witnesses.
    
      Held: That this new evidence could not be held to be after-discovered evidence.
    Appeal from a decree of the Circuit Court of Augusta county. Decree for defendant. Complainant appeals.
    
      Affirmed.
    
    The opinion states the case.
    
      Timberlake & Nelson, for the appellant.
    
      R. C. Walker, for the appellee.
   Prentis, J.,

delivered the opinion of the court.

This is an appeal from a decree which dismissed a bill of review by the appellant, Malarkey, against the appellee. The antecedent facts which we regard as material may be thus stated:

In 1916, one Carl Barckhoff, who operated an organ factory at Basic City, Virginia, was adjudicated a bankrupt. His assets, clearly indicated and described by an inventory, were sold and bought by Ballard, the appellee, from the trustee. Thereafter the chattels thus bought, consisting of machinery, lumber, two horses, buggy, materials, supplies and some finished musical instruments, itemized in such inventory, were delivered by Ballard to Barckhoff, the bankrupt, with the understanding that he was to pay from the use and sale thereof the amount which they had cost Ballard at the sale, $2,275.00, plus about $1,400.00 which Barckhoff already owed him; and that the title to the property should remain in Ballard. Some small payments were made on this debt when on April 4, 1917, there was a partnership formed between Barckhoff and Malarkey. This co-partnership took over the property referred to, and Malarkey contributed the capital for the continued prosecution of the business. During the existence of this copartnership other payments were made on the debt to Ballard, some of which were by the checks of the copartnership and some by the personal checks of Malarkey sent by him from his home in Pennsylvania to be thus applied. The copartnership was dissolved January 31, 1919, shortly before Barckhoff’s death, and Malarkey then took its assets and assumed its liabilities. He denied liability for the balance due Ballard on this debt, and this litigation ensued.

Ballard filed his original bill against Malarkey, setting up an equitable lien upon the personal property thus received and appropriated first by Barckhoff and thereafter by the copartnership. This suit was instituted in March, 1919. There was a decree of reference August 12, 1919, depositions were taken, and the commissioner reported favorably as to Ballard’s claim in November, 1921, and this was followed by a decree in his favor against Malarkey January 21, 1922. Malarkey was the only witness sworn in his behalf.

After that final decree, Malarkey filed his bill of review relying chiefly upon after-discovered evidence. In the meantime, execution of fieri facias upon the pecuniary judgment against him for Ballard’s claim had issued, been levied and Malarkey had executed a forthcoming bond. . Upon filing his bill of review the court enjoined the prosecution of the motion for judgment and execution under the forthcoming bond. Issue having been joined on the bill of review, further testimony was taken, and the decree under review which dissolved the injunction and dismissed the bill was entered.

The first point urged is that the demurrer to the original bill should have been sustained, because its allegations were insufficient to show that the complainant had a lien upon the property which could be enforced in equity. As to this we think it manifest that the court properly overruled the demurrer.

The controlling principle is well stated in Brown v. Ford, 120 Va. 245, 91 S. E. 145, 149, where this language from 2 Pomeroy’s Eq. (2d ed.), sec. 1235, is quoted with reference to such liens: “The doctrine may be stated in its most general form that every express executory agreement in writing, whereby the contracting party sufficiently indicates an intention to make some particular property, real or personal, or fund, therein described and identified, security for a debt or other obligation * * * creates an equitable lien upon the property so indicated which is enforceable against the property * * *. Under like circumstances a mere verbal agreement may create a similar lien upon personal property.”

This also is said in Delaney v. Willis, 95 Va. 608, 29 S. E. 324, 64 Am. St. Rep. 815: “Whatever the form of the contract may be, if it is intended thereby to create a security it is an equitable mortgage enforced upon the principle that equity will decree that as done which by agreement is agreed to be done.”

As has been recently said by this court in Armour Fertilizer Works v. Taylor, 129 Va. 7, 105 S. E. 576: “In the nature of the subject, the authorities do not attempt other than general definitions of an equitable lien.”

The circumstances relied upon in the original bill are that Barekhoff agreed to discharge the debt out of the proceeds derived from the use and sale of the personal property delivered to him; to replace all goods and chattels disposed of by him with goods and chattels of like quality and value; that the title of the goods and chattels so sold by Ballard tojhim and all property which replaced that originally sold or consumed was to remain in and be the property of Ballard until the indebtedness should be fully paid, and that Barckhoff was to furnish Ballard from time to time with an itemized statement of all of such property which was so sold or disposed of. The bill further alleged that Malarkey entered into the copartnership with full knowledge and notice of this agreement between Ballard and Barckhoff. These allegations, if proved, are in our judgment clearly sufficient to support the bill.

Upon the merits, we think it unnecessary to say more than that the evidence introduced by the complainant under the original bill justified the favorable report of the commissioner and the original decree in his favor.

The proposition now chiefly urged upon us in the briefs for the appellant is, that he is entitled to have the original decree reviewed and to a decree in his favor because of the after-discovered evidence, which it is maintained is amply sufficient to demonstrate the final error of the trial court in dismissing the bill of review.

As to this, we cannot express our own view better than to quote from and adopt the opinion of the learned judge of the trial court. He says:

“This cause was unhurriedly and without objection submitted to this court, which, upon a consideration of the record, reached said conclusion. Afterwards, a bill of review was filed on behalf of Malarkey wherein he asked for a rehearing on the grounds that one Brantley, who was present when the partnership was formed, and Mrs. Lena Barckhoff, widow of said Barckhoff, who was present when the partnership was dissolved, would testify that Malarkey had no knowledge of said lien, the language of said petition being in part as follows:
“ ‘Complainant further says that while he hoped and believed tbat said R. A. Brantley and Lena Barckhoff bad beard and would remember tbe facts to which they will now testify and above set out, be did not know tbis to be so until be was able to locate and communicate with them since tbe entry of said decree.’
“From tbis it appears tbat petitioner, when tbis cause was submitted, both ‘hoped and believed’ that these witnesses would testify to matters therein set out. It is, therefore, clear tbat tbis is not after-discovered evidence. In Gordon v. Harvey, 4 Call 450, tbe court said:
“ ‘If there was any real ground to believe tbat other testimony could have been procured, tbe plaintiff should have moved tbe district court for a continuance of tbe cause; and not have waited until a verdict was rendered against him, and then bring it forward as a ground for a new trial, after having taken bis chance with tbe jury.’
“In a note to Payton v. McQuown (Ky.), 31 L. R. A. at p. 38, it is said:.
“ ‘And negligence in not obtaining a continuance in order to procure evidence will prevent an injunction against tbe judgment, Ratliff v. Stretch, 130 Ind. 282; Naylor v. Phillips, 2 Stew. & P. (Ala.) 58; Canada v. Barksdale, 84 Va. 742.’
“And tbis law is not affected by tbe fact that these witnesses might possibly prove unfriendly. In Norfolk & Western R. R. Co. v. Draper, 90 Va. 245, 17 S. E. 883, it is held:
“ ‘New trial on'ground of newly discovered evidence will not be granted for evidence known before tbe trial, but omitted because tbe witnesses were believed to be hostile.’
“Had tbe diligence exercised since tbis cause was submitted been used before then, there would have been no occasion for a rehearing; and as to due diligence see McClung v. Folkes, 126 Va. 259, 101 S. E. 345.”

It appears that Malarkey knew that the persons whom he now relies on had knowledge of material facts, one having been present at the formation of the copartnership, the other at its dissolution. His only excuses for going to trial without producing them as witnesses are, that he did not know where they were, or what would be the character of their testimony. The precise ■efforts which he made to locate these material witnesses during the period, nearly three years, during which the suit was pending under the original bill, he does not disclose in detail. His letters, however, which show his efforts to locate them after the adverse decree therein are filed and show that these belated efforts were promptly successful. This new evidence, therefore, •cannot be held to be after-discovered evidence, for that these were material witnesses has always been known, and all that is now relied upon is that he (Malarkey) did not know precisely where they were, and did not know certainly whose version of the transactions they would support. This falls so far short of coming within the rule that it is unnecessary to do more than recite the facts and to repeat what was recently said in the case of McClung v. Folkes, supra: “The interests of society require that there be an end of litigation. No maxim of the law is more firmly established. For this reason, the rule has always been strictly adhered to that however material may be the newly discovered evidence, a new trial will not be granted on that account unless such evidence could not have been discovered by the exercise of reasonable diligence in time for use at the former trials.”

In the last brief filed by the counsel for the appellee •since the case was submitted, he calls attention to the fact that the printed record does not contain any bill of review setting up the alleged newly discovered evidence. This is true, but inasmuch as the case was presented both in the trial court and here upon the assumption that there was such a bill, we shall ignore its absence from the record. We assume that it is missing by a mere inadvertence. Reviewing here the same questions which were considered by the trial court, we reach the same conclusion.

Affirmed.  