Dorr v. Gibboney

7 F. Cas. 923, 3 Hughes 382, 1878 U.S. App. LEXIS 1535
CourtU.S. Circuit Court for the District of Western Virginia
DecidedJune 2, 1878
StatusPublished
Cited by4 cases

This text of 7 F. Cas. 923 (Dorr v. Gibboney) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Western Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dorr v. Gibboney, 7 F. Cas. 923, 3 Hughes 382, 1878 U.S. App. LEXIS 1535 (circtwdva 1878).

Opinion

RIVES, District Judge.

Before entering on the examination of this ease, it is necessary to dispose of the objection made to the hearing for want of proper parties to the bill-At this stage of the proceedings, such an objection cannot be heard unless for defect of parties; the court should be disabled from passing on the very right of the cause. If, however, the objection had come at an earlier stage by way of a preliminary demurrer, it could scarcely avail. There is here no community of property or interest between the complainant and the other cestui que trust under the deed, in the subject of his claim; his is a separate ascertained demand, [924]*924wholly unconnected with any general question of the administration of the trust fund, and it is hard to conceive how the other creditors could be interested in his recovery, not from the general fund, but from the trustee, whom he seeks to hold liable on account of the actual receipt thereof. This case, therefore, falls under the exceptions to the general rule so well defined in Story’s Equity Pleadings, §§ 207a, -212. The complainant has his fixed share of the trust fund, and there can be no necessity, on the ground of principle or authority, to make any other parties than those he has already made to his complaint His debt is secured by the general trust deed of Thomas L. Preston of the 7th July, 1859, and is included in the fourth class under the designation of “a debt due by negotiable note to A. H. Dorr of $2,-■650.” The bulk of this trust property, consisting of the Preston Salt Works estate, and the lands contiguous thereto, and certain interests in the King’s Salt Works, with the appurtenant lands, were sold on the 10th day of June, 1862, by the trustee, Robert Gibbo-ney, to W. Alexander Stuart, George W. Palmer, and George B. Parker, for the sum of $424,000. This contract having been made during the Rebellion, it was contemplated by the parties to this contract that the trustee would not be able to pay off the creditors with the currency of that belligerent era; and hence it was expressly stipulated by the purchasers, that in case of the refusal of creditors to receive such currency in payment, they were to substitute their notes for the amount so refused, secured, to the satisfaction of said Gibboney, in equal instalments, payable in one, two, three, four, and five years, 'from the first of July then next ensuing, or sooner, at the election of said purchasers, with interest from said first of July, and on the; whole amount, payable annually.

In this state of facts, on the 22d October, 1861, the trustee,- Robert Gibboney, was served with interrogatories from John W. Johnston, receiver of the Confederate States, acting under the sequestration act of that government, of the preceding May, and, without delay, on the very day of service, made return of this debt to Dorr, as a citizen of New York. Thereupon the said receiver, suing in the name of said Confederate States, procured a decree of sequestration in the district court of the Confederate States for the western district of Virginia, on the first day of August, 1862, of this particular debt. But inasmuch as Gibboney, in his surrender of this claim, stated that it had been attached in his hands by Philip Rohr, this decree of sequestration recites that fact, and the willingness of Gibboney to pay to the proper person; and then directs him to pay it, with accrued interest, to said receiver, John W. Johnston, with this added provision, that said Johnston should lend it on good security, or if unable to do so, invest the same in eight per cent. Confederate bonds or seven 80-100 per cent, treasury notes, to await the decision of the suit brought by said Rohr against said Dorr. Accordingly, on the very day of this decree, we find among the vouchers of Gibboney, trustee, as aforesaid, in the record of Preston v. Stuart, made an exhibit in this cause, p. 140, the following receipt: “$3,137.15. Received of Robert Gibboney, trustee of Thomas L. Preston, three thousand one hundred and thirty-seven dollars and fifteen cents, paid me under the within decree (Confederate States, by J. W. Johnston, receiver, v. R. Gibboney, trustee, etc.). John W. Johnston, Receiver. August 1, 18G2.” And in the Rohr record, p. 2G, we find the bond of Philip Rohr, etc., to John W. Johnston, receiver, under an order of the Confederate States district court in the case against Robert Gibboney, trustee for -Thomas L. Preston, to sequester the estate of A. H. Dorr, for the same identical sum of $3,137.15. In the settled account of said Gibboney, we find he credits himself by the same amount “paid John W. Johnston, receiver.” So far; then, as Gibboney is concerned, his defence rests on the sequestration alone. He does not hold the fund subject to the attachment of Rohr. He is content with the protection and authority of the Confederate tribunal, and parts with the fund to its receiver, leaving the court to preserve the fund for the satisfaction of the attaching creditor in its own way.

Was not this conduct under the circumstances a breach of trust, for which the trustee should be held liable? It has been seen that he was under no obligation to receive the currency of that day, where it could not be paid to the creditors; on the contrary, he stipulated for its refusal, and the substitution of time notes in its stead. We have shown that he knew Dorr was a non-resident; a citizen of New York; and that he could not satisfy his debt with Confederate notes. Why, then, did he agree to take them? Why did he not avail of his own stipulation for such a case by taking the bond of the purchasers for such a period as would probably cover the duration of the revolt? It is only to be deemed a shift, in flagrant disregard of his duty to his non-resident ces-tui que trust, to accommodate the purchasers, to expedite his administration of the trust, and signalize his obeisance to the rebel authorities. He must have known and felt that creditors in the loyal states could not be paid in Confederate notes. This principle, as laid down by the supreme court in the case of Fretz v. Stover, 22 Wall. [89 U. S.] 198, must have commended itself to men of ordinary sense, and least versed in business or commerce, even during hostilities. I cannot. therefore, but regard the taking of this depreciated currency as evidence of a purpose to betray the creditor in the state of New York, while the trustee was thereby to gain credit for his zeal in the Confederate cause, and his . alacrity in obeying, the • se[925]*925questration act of the Confederate congress. But above and beyond this consideration, Is the absolute nullity of these sequestration proceedings. They depended for their validity upon the success of the Rebellion. With its suppression, they perished; and to respect them now would be inconsistent with the rightful pretensions of the government and the actual results of the war. They are nullities. They are not to be respected by any court, state or federal. I have had repeated occasions to pass upon them in this circuit; and have never hesitated in this view of them, before I could be guided by decisions in the last resort Since then, we have the case of Perdiearis v. Charleston Gas Light Co. [supra], approved by the supreme court; and the recent case of Williams v. Bruffy, 96 U. S. 176, decided by the supreme court on- error from our own court of appeals. This position is virtually conceded in argument by the counsel for the defendants. But they seek to escape its force by sheltering themselves under the attachment suit of Philip Rohr, of which profert is made in the answer of Gibboney’s executrix.

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Bluebook (online)
7 F. Cas. 923, 3 Hughes 382, 1878 U.S. App. LEXIS 1535, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dorr-v-gibboney-circtwdva-1878.