Conaway v. Third Nat. Bank of Cincinnati

167 F. 26, 92 C.C.A. 488, 1908 U.S. App. LEXIS 4917
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 15, 1908
DocketNo. 822
StatusPublished

This text of 167 F. 26 (Conaway v. Third Nat. Bank of Cincinnati) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Conaway v. Third Nat. Bank of Cincinnati, 167 F. 26, 92 C.C.A. 488, 1908 U.S. App. LEXIS 4917 (4th Cir. 1908).

Opinion

PRITCHARD, Circuit Judge

(after stating the facts as above). It is insisted by counsel for appellants that the trustees in making this sale were acting as attorneys in fact for and on behalf of the Dola Coal & Coke Company, and that therefore they were not trustees in the usual acceptation of the term, but were simply acting in pursuance of the authority thus granted by the Dola Coal & Coke Company to sell and dispose of the property in question, and that therefore any statute of “West Virginia relating to sales of property under deeds of trust could not affect them in the slightest degree.

The learned judge who tried the case below, in disposing of this lir-t question, said:

•Ttivr. It is well settled that it is immaterial as to the form and character of iho irsirument by which a trust may be created. It may also be created by miro than one instrument in different forms, each bearing different ioeluiieai names. The question in equity is always one of substance and not of form.' I therefore construe the original agreement between Jackson and these irusu’< s, the deed for his realty, the memorandum of assignment of his personal property, and the power of attorney of the Dola Company to them, as means resorted to to accomplish a single purpose, the creation of a trust in these trustees for the benefit of his creditors. The power of attorney, it is true, goes '-'¡cp beyond the other writing- and gives the right of disposition of the coal property of the Dola Company, in which Jackson was not alone interested. However, it cannot be denied that his interest was almost the whole thereof, that this power was executed solely because of his transfers before made, and with the sole purpose of better obtaining and securing his interests therein and vesting the' same in the trustees.”

The authority granted the trustees by the Dola Coal & Coke Company reads as follows:

[30]*30“Now, therefore, be it resolved, that the board of directors of this corporation be and they are hereby authorized and instructed to cause Joseph E. Sands, Ira E. Iiohinson, and John W. Davis to be duly constituted the attorneys in fact of this corporation to make sale of all and singular its real estate as aforesaid, in such manner, upon such terms, and at such times as they may deem proper. * * * ”

The court below held that the trustees were required by the provisions of section 3053 (W. Va. Code 1906) to sell the property in question at public auction. This section reads as follows:

“(6) The trustee in any such deed shall, whenever required by any creditor secured or any surety' indemnified by the deed, or the personal representative of any such creditor or surety, after the debt due to such creditor or for which such surety may be liable, shall have become payable and default shall have been made in the payment thereof, by the grantor, sell the property conveyed by the deed, or so much thereof as may be necessary, at public auction. * * * ”

Owing to the various instruments executed by the grantor to his trustees, together with the power of attorney given to the trustees by the Dola Coal & Coke Company, the question arises as to whether the sale of the property of the Dola Coal & Coke Company was made in pursuance of the trust created by the execution of the deeds by the grantor, as well as the power of attorney executed by the Dola Coal & Coke Company, or whether the authority to make such sale was derived solely from the authority conferred upon the trustees in the power of attorney executed by the Dola Coal & Coke Company. The court below ruled that the various conve3'ances made by the trustees, as well as the power of attorney executed by the Dola Coal & Coke Company, constituted one transaction, and should therefore be treated as constituting a trust for the benefit of the creditors of the grantor. If the sale was made solely in pursuance of the power of attorney hereinbefore referred to, then unquestionably the trustees in making such sale were not required to advertise the property at public auction under the provisions of section 3053, or any other section of the Code of West Virginia pertaining to sales of property under deeds of trust. But for the purpose of deciding the questions involved herein, we will treat the ruling of the lower court in this respect as being correct, and that this property was sold in pursuance of an express trust created for the benefit of the creditors of the grantor.

Section 3052, which immediately precedes section 3053, appears to be confined strictly to deeds of trust. We therefore conclude that the provision of section 3053, relative to the manner of making sale of property under deeds of trust, must necessarily be construed as referring to deeds of trust executed in pursuance of section 3052. This section is limited in its scope to deeds of trust executed to secure creditors and to indemnify sureties; whereas the deed under which this property was sold was executed for an entirely different purpose, to wit, for the benefit of creditors of the grantor. The language of this section is so plain and explicit that there can be no doubt as to its true intent and meaning. It is obvious, even from a casual reading of the statute, that it was intended to apply exclusively to deeds of trust, and that it does not apply to a deed of assignment for payment of debts as in this instance. Another distinguishing feature is that there [31]*31is nothing in section 3053 which requires the trustee to enter into bond for the faithful discharge of his duties before making sale of the property conveyed or distributing the proceeds, except when required by the grantor or any cestui que trust in said deed. However, when we come to examine section 3054 of the Code of West Virginia of 1906, we find that its provisions require that the trustee under the conveyance therein contemplated shall, before entering upon the discharge of his duties as such, execute a sufficient bond for the faithful discharge of the duties thus imposed upon him. This section reads as follows:

“That a person appointed by an insolvent debtor as trustee in any assignment, conveyance, transfer, or other act of such insolvent debtor, which is intended to operate as an assignment of all such debtor’s property for the benefit of all of his creditors, or which does so operate under the laws of this state, shall not have the power of such trustee until he qualifies as such by taking an oath and giving a bond in a penalty double the amount of the ascertained estate, with sufficient surely, before tlie clerk of the county court of the county in which such assignment, conveyance, transfer or other instrument is or should be recorded, or such act is done, in the manner, and with the effect, as a personal representative of the estate of a decedent is qualified. And in case such person so appointed trustee by such insolvent debtor fails or refuses to so qualify the said county court shall appoint such trustee upon the application of any person interested. The oath of such trustee shall be that he will faithfully perform the duties of the office of trustee to the best of his skill and judgment, and will account for and pay over all money that comes to his hands as such trustee. Said bond shall be approved by said court, and conditioned that said trustee shall faithfully perforin the duties of trustee to the best of his skill and judgment, and account for and pay over all money that may come to his hands as such trustee.

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9 W. Va. 664 (West Virginia Supreme Court, 1876)

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Bluebook (online)
167 F. 26, 92 C.C.A. 488, 1908 U.S. App. LEXIS 4917, Counsel Stack Legal Research, https://law.counselstack.com/opinion/conaway-v-third-nat-bank-of-cincinnati-ca4-1908.