Bank of U. S. v. Carroll

43 Ky. 40
CourtCourt of Appeals of Kentucky
DecidedSeptember 20, 1843
StatusPublished

This text of 43 Ky. 40 (Bank of U. S. v. Carroll) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of U. S. v. Carroll, 43 Ky. 40 (Ky. Ct. App. 1843).

Opinion

Oiiiei' Justice Ewing

delivered the opinion of the Court.

In 1811, Daniel and Charles Carroll and Eli Williams, entered into partnership in a paper manufactory and distillery in the District of Columbia, and in the adjoining State of Maryland. In 1815, after incurring many heavy liabilities, principally to the Banks in the District, the partnership was dissolved, and a partial settlement made, and Eli Williams assumed to pay, as his share of the Bank debts, after allowing him credits for his prior advances, $28,000, to the Union Bank of Georgetown, and $4000 to the Bank of the Metropolis, and the Car-rolls became his indorsers ; and each of the Carrolls assumed to other Banks tbe amounts due from each, of their share of the firm debts to the Banks, after allowing to each credits for prior advances. An estimate was made of the stock on hand, &c. &c., and Williams was let into the possession of the paper mill at a rent of $1500 per year.

On the 3d December, 1816, Williams being extensively engaged in business, and in doubtful circumstances, executed to Brent and Key, as trustees, a deed of trust for several tracts of land in Kentucky, among which is a tract of 4000 acres, lying on the Ohio river, in Henry county, now Oldham, in trust: 1st. To'pay all expenses that may be incurred in the execution of the trust. 2nd. To save harmeless and indemnify the said Carrolls, and [41]*41each sf them, for any advances made, or which may be made by either of them, under the articles of co-partnership, over and beyond the sums which they, or either of them, were bound to advance, with interest from the time of the advances. 3d. To save harmless and indemnify the said Corrolls, and each of them, from all loss or damage which hath arisen, or may arise, from their or •either of their liability for any past or future indorsement or contract, to enable the said Eli Williams to raise his proportion, or any part of his proportion of the capital stock. 4th. To pay and secure to the said Carrolls their full proportion of the profits, (if any) arising from said partnership transactions; and to save them, and each of them, harmless in case it should be unprofitable, from all loss or payment on account of said Williams and his interest in the concern. And, lastly, after these objects are satisfied, to re-convey the residue, if any remains, to said Williams.” This deed of trust was duly recorded in the proper office in Henry county, where the most valuable and greater part of the land lay.

In May, 1818, Eli Williams conveyed in trust to Daniel Kurtz, by several distinct deeds, the same lands, together with other lands in Kentucky, to secure to the Bank of Columbia upwards of $58,000, giving to said Kurtz the power to sell and apply the proceeds to the payment of said debts. The deed embracing the 4000 acre tract, as well as those embracing the other tracts, were deposited in the vault of the Bank, and there kept, and were never recorded until 1825. In 1818, the Carrolls having been made responsible, upon their indorsements for Williams, to the Union Bank of Georgetown, filed their bill in the General Court of Kentucky, against Williams, and the Trustees, Brent and Key, to subject the lands conveyed in trust to sale, for their indemnity. In 1821 they obtained a decree for the sale of the lands in satisfaction of $27,280, the amount of principal and interest of their incurred responsibility to the Union Bank aforesaid, and a commissioner to make sale and conveyance was ap. pointed, who sold the same at public auction, upon due advertisement, and the Carrolls became the purchasers, as the highest bidders, of the 4000 acre tract at $8000, [42]*42an<^ °f the other tracts at $3600; and the commissioner, under the order of the Court, made a conveyance to them, for and on behalf of Williams, as well as of the Trustees, which was examined and approved by the Court in January, 1822, and acknowledged and ordered to record; a decree rendered in favor of the Carrolls for the residue of the demand unsatisfied by the sale of the land and execution ordered against Williams. In October, 1823, Charles Carroll conveyed to his son, Charles H. Carroll, his undivided interest in all the lands acquired by the purchase at the commissioner’s sale, for the valuable consideration of $10,000, the two Carrolls having been let into possession under their purchase. In 1830, Charles H. Carroll and Daniel Carroll executed to each other deeds of partition for the lands ; and in March, 1837, and before publication was made or process executed on the defendants in this suit, Daniel Carroll conveyed his moiety of the land to Trustees, in trust for the payment of a large amount of debts, owing by him, to the Bank of Washington.

In December, 1836, the Bank of the United States, claiming, by assignment, the debt secured to the Bank of Columbia, by the deed of trust aforesaid, and also the lien to secure it, in conjunction with Kurtz, the Trustee, instituted this suit in chancery, in the Oldham Circuit Court, (in which county the 4000 acres now lies,) against Daniel Carroll and the heirs of Charles Carroll, and the heirs of Williams and others, to subject the land to the payment of their debt. They alledge that a bill has been filed in the General Court to review and set aside the decree in favor of the Carrolls; that the Carrolls had notice of their deed of trust, and of the debt secured by it, before and at the time of commencing their suit, and before and at the time of their decree and purchase of the land ; and that the debt secured to the Bank of Columbia was a partnership debt, for which the Carrolls, as former partners, were bound, and charge fraud in the execution of the deed of trust for their benefit, and fraud in the proceedings, decree and sale under it; and pray that the de. defendants, of some of them, may be decreed to pay to the Bank of the United States, the debt secured to the [43]*43Bank of Columbia, and on failure, that they be forever-foreclosed of their equity of redemption, and the land sold to satisfy the same, and for general relief.

Answers and traverse. Decree of the Circuit Court.

Daniel Carroll and William T. Carroll and Charles H. Carroll, the sons of Charles Carroll, deceased, (the latter being his executor,) and some of the infant heirs, answe'r the bill, and a general traverse is entered for the residue, they all being non-residents. They deny notice until long after the decree and purchase and conveyance under it; deny fraud in their deed, or fraud or irregularity in the obtention of their deed, or acquisition of title under it, and claim to be innocent purchasers for a valuable consideration; set out the continued quiet possession under their title ; the making of valuable improvements on the 4000 acres, and the subsequent partition sale and conveyance, in fee and intrust, for a valuable consideration, and charge that the officers of the Bank of Columbia and of the United States, were well apprized of their deed of trust and the proceedings under it, and acquiesced in their fairness, priority and regularity, until about the lime this suit was instituted.

There is no evidence that the Carrolls had notice of the complainant’s lien until some time after their purchase under their decree. But there is evidence tending to establish that some of the officers of the Bank of Columbia had actual notice of the deed of trust for the benefit of the Carrolls, and of the proceedings under it, at least within some year or so after the sale.

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Bluebook (online)
43 Ky. 40, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-u-s-v-carroll-kyctapp-1843.