Mauldin, Montague & Co. v. Armistead

14 Ala. 702

• Court: Supreme Court of Alabama
• Decided: June 15, 1848
• Status: Published

Opinion

COLLIER, C. J.

-1. Whenever a trust is created, a legal estate sufficient for its complete execution shall, if possible, be implied. Lewin on Trusts, &c. 234. Under the influence of this rule, the trustee may bring an action in a court of law respecting the trust estate; the cestui que trust, though the beneficial, and in equity the absolute owner, is not recognized as such at law. Id. 247. If the trustee dies, his heir, executor or administrator, is substituted to his place, and will hold the property in the same character that he did. Id. 205; Willis on Trustees, 118.- It is said the inherent right which every one has of disposing of whatever interest may be vested in him, subjects trust property to the alienation of the trustee; but the alienee takes only such estate as the trustee had therein, unless he were ignorant of the trust; the right and interest of the trustee, will also pass by his will under general words, if not inconsistent with the testator’s manifest intention; and in case of no such disposition, it vests according to its nature, on the decease of the trustee, in his real or personal representative, impressed with the trust. Lewin on Trusts, 205; Willis on Trustees, 84; Dexter v. Stewart, 7 Johns. Ch. Rep. 52; Waggener v. Waggener, 3 Monr. Rep. 545. This brief view of the law is quite sufficient to show that the interest of Semple, the deceased trustee under the deed of 1842, passed to his executor, and that it was competent for the latter, in virtue of the legislation which permits the revival of suits, to become the plaintiff in the action unless our statutes in respect to trustees have modified, or rather abrogated, the common law in this respect. The act of 1829 provides, that upon the removal or resignation of a trustee, the circuit court of the proper county may appoint a successor: Further, that, the court before which any suit shall be pending, may on motion appoint a trustee to prosecute or defend the same, in all cases where it may be necessary. Clay’s Dig. 581, <§> 3, 5. The act of 1843 enacts that when a trustee shall die, on the application of any person interested in the trust estate, the register in chancery of the proper district, shall appoint one or more successors in his stead, as in the case of the resignation of trustees. Id. 350, § 33.

These several enactments do not in any manner impair the estate of the trustee — they are purely remedial in their character, investing the circuit court in one case, any court in the second, and the register in chancery in the third, with a jurisdiction which it was competent for a chancellor previously to have exercised. An observance of some one of these provisions is not indispensable to a suit already commenced, or to initiate it, where the estate of the trustee is such as entitles his representatives to sue. Even if the court below, or the register, had substituted a trustee, it might perhaps admit of serious question, whether such trustee, or the executor. should have prosecuted the suit under the circumstances of the present case. Here the cotton growed on the plantation conveyed by the deed, was taken possession of by the trustee, marked with the initials of his name, and consigned to the defendants for sale. Under such circumstances, did not the title to the proceeds vest in the consignor, as soon as the sale was consummated, if living, and if dead, in his executor, subject, it is true, to subserve the purposes of the trust? Was it competent for the testator, after having accepted and entered on the execution of the trust, by disposing of the property conveyed to him, to surrender the trust, or discharge himself of it, without the consent of the cestuis que trust, or the direction of the court? Sheppard v. McEvers, 4 John. Rep. 136; Harrison et al. v. Mock et al. 10 Ala. Rep. 185. If this be so, must not the executor of the trustee represent him in the prosecution of a suit growing out of the execution of the trust by the latter ? It is not necessary to answer these questions, for what we have said will sufficiently show, that the present suit was properly revived in the name of the executor.

2. It is an established rule, that the assent of creditors to an assignment in trust for their benefit, will be presumed, where the interest would dictate such assent; but this presumption is repelled whenever the conditions imposed by the debtor áre not beneficial, or he is delayed in the collection of his debt, his security is impaired, or he is required “to do or omit any thing whatever.” Elmes v. Sutherland, 7 Ala. R. 262. But unless the deed contemplates the assent of all the creditors intended to be provided for, the assent of a less number will, as it respects themselves, be sufficient to validate it pro tanto. Id.; Hodge v. Wyatt & Houston, 10 Ala. R. 271; Robinson v. Rapelye & Smith, 2 Stew. R. 86; Ashurst v. Martin, 9 Por. R. 566.

The deed of 1842, as it respects the crop of cotton to be growed that year does not contemplate the assent of the defendants, or Hugh Campbell, but it proposed to give them the proceeds of it, without requiring any act to be done on their part. It does not provide, eithep directly or indirectly, that they shall delay the collection of their debts ; but leaves them free to adopt such legal measures as they thing proper, and entitles them to the proceeds of the cotton, if, when realized, they shall be unpaid. In this view, the deed was certainly beneficial to these creditors, and in the absence of proof to the contrary, their assent would be presumed. If the defendants dissent, still the assent of Campbell will be sufficient to uphold the assignment for his benefit, and the> security as it respects him, will not be impaired by their refusal to participate.

3. There can be no question but a debtor may'convey a plantation and slaves to a trustee as a security for the payment of certain creditors, and provide by the same deed, that the proceeds of a crop planted, or to be planted, shall be appropriated by the trustee to the payment of the debts to which the plantation and slaves are to be devoted, or to such others as the grantor may designate. Ravesies v. Alston, 5 Ala. Rep. 297; Adams v. Tanner & Horton, Id. 740; Robinson & Caldwell v. Mauldin, Montague & Co. 11 Ala. R. 977. If the trustee, when the crop is gathered, consigns it to a factor, to sell and remit the proceeds, or hold the same subject to his order, the factor, though a creditor of the grant- or, cannot defeat an action for the purchase money, upon the ground that the crop was in an immature state, or not planted when the deed was executed. Even if it were conceded that the deed invested the trustee with a mere equitable interest in the crop, until severed from the soil, when it was gathered and sent to market by him, his title became complete at law. This proposition is so clear as not to require further illustration.

4. It has been decided, that where goods were consigned to a factor, for sale on commission, the law raises a contract to account for such as are sold, to pay over the proceeds, and to deliver the residue unsold on demand. Russell On Fact. 40. It seems to be settled that a factor has a lien, and may retain for the balance of his general account, (Id. 192, et'seq.;) that is, he has a right to retain that which is in his possession belonging to his principal, until certain demands of himself against his principal, are settled. Id. 193, 275. It is said, in all cases df lien, there must be a certain and liquidated demand, and that where the amount of the demand cannot be ascertained, except through the intervention of a jury, there can be no lien, unless there be an express contract to that effect. Id. 197. Further: that a factor has no right of lien in respect of debts which arise prior to the time at which his character as factor commences, the debts incurred prior to the relation of principal and factor, not being contracted on the faith of the money, or goods, which might afterwards come to the hands of the latter. Id. 199. It is also essential to the right of lien, that the debt in respect of which it is claimed, should be due from the person whose property the factor seeks to retain. Id. 200. As a general rule, it is said to be settled, that an agent shall not be allowed to dispute the title of his principal, and that after receiving money in that capacity, he is not at liberty to say that he did not receive it for the benefit of his principal,' but for that of some other person. This rule applies to a factor who sells goods for his principal, and receives the money for them. Id. 279. See also, Morse v. Woods, 5 N. H. Rep. 297.

This brief notice of the law, which is well supported by adjudged cases, may suffice to show that the defendants have no lien upon the proceeds of the cotton consigned them by the plaintiff’s testator, to satisfy their demand against R. B. Ar-mistead. The conveyance of the crop planted, and to be planted in 1842, and the gathering it and subsequent possession by the testator, under the deed, invested him with the legal title, against which the defendants could not assert a lien, upon the ground that the grantor was indebted to them on demands originating previous to the execution of the deed. These conclusions are an obvious sequence from the facts, and are sufficiently illustrated by what has been already said.

5. We have already seen, that the crop to be grown upon the plantation conveyed, was assignable, and the facts show the plaintiff’s testator had the legal right to it; this being assumed, we can perceive no ground on which the defendants can maintain the right to set off their demand against the grantor. In the demands of the respective parties, mutuality is wanting. Babing. on Set Off, 8. The defendants do not pretend that the plaintiff is their debtor, while the latter has shown that they have received money to which he is legally eutitledl The defence wants an indispensable element — a demand on which the defendants can maintain an action against the plaintiff. It may be, if the proceeds of the cotton had been accounted for and paid over, then the defendants might have sued in assumpsit for the proportion to which they were entitled under the deed, if the plaintiff refused to pay them; but in order to create a liability on the part of the plaintiff, for which he was thus chargeable, he should have received the money. 1 Archb. N. P. 123 to 125; Crawford v. Simonton, Ex’r, 7 Port. Rep. 110; Bell v. Horton, 1 Ala. Rep. 413. In Tucker v. Tucker, 4 B. & Ad. Rep. it was held, that in an action by a trustee, the defendant cannot set off a debt due to him from the cestui que trust. So it has been decided in an action by the husband, the defendant cannot set off a debt due to him by the wife dum sola, although the action be upon a note given to the wife after marriage. Borough v. Moss, 10 B. & C. Rep. 558; Wood v. Akers, 2 Esp. Rep. 596. And in an action against the husband alone, he cannot set off a debt due from the plaintiff to his wife dum sola. Paynter v. Walker, Bul. N. P. 179. Nor can the beneficial holder of paper, without an indorsement investing him with the right to sue thereon in his own name, set it off to an action against him by the maker. Wade v. Tinkler, 16 East’s Rep. 38. See also, President, &c. v. Ogle, Wright’s Rep. 281; Porter v. Morris, 2 Harring. R. 509; Gant v. Bowie, adm’r, 2 H. & Johns. Rep. 233; Hall’s Adm’r v. Creswell, 12 G. & Johns. Rep. 36. These citations are so pertinent, and establish so satisfactorily that the debt sought to be set off must be due by the plaintiff, that we will add nothing more on this point.

The doctrine of recoupment cannot be applied, so as to allow the deduction of the defendant’s demand against R. B. Armistead, from the proceeds of the cotton they sold upon the account of the plaintiff’s testator. When the demands of both parties spring out of the'same contract or transaction, the defendant may recoup, although the damages on both sides are unliquidated; but there can be no recoupment by setting up the breach of an independent contract on the part of the plaintiff. Hatchett & Bro. v. Gibson, 13 Ala. R. 587. In the case before us, the indebtedness of the grantor in the deed of 1842, does not grow out of the contract between the plaintiff’s testator and the defendants, by which the latter undertook to sell the cotton, account for and pay over the proceeds. It has no connection with it, and there is no obligation upon the plaintiff to discharge it, unless he shall acquire the means under the deed, for that purpose.

Whether the fact that the sale of the land was made on a credit as to the greater part of the purchase money, will benefit or prejudicé either of the creditors provided for by the deed of 1842, in the view we have taken of the case, is an immaterial inquiry at this time.

It cannot be assumed, from the evidence recited in the bill of exceptions, that the defendants are entitled to alien upon the proceeds of the cotton crop, irrespective of the deed, for the payment of the amount of the bill they had accepted. A mere confidence or expectation that their liability should be thus met or re-imbursed, was certainly not sufficient to take from the drawer of the bill the right to make an adverse disposition of his crop; at least in a court of law.

The question whether either of the creditors are preferred to the other, or whether they are to be paid pari passu, need not be here considered; for however determined, the plaintiff’s right to recover in this action will not be affected. We will not stop to scan- all the legal assumptions of the circuit judge in the charges refused and given, as his conclusions, when applied to the present case, are correct. Without extending this opinion by further remarks, we have but to add,, that the judgment is affirmed.