McPherson v. Cox

96 U.S. 404, 24 L. Ed. 746, 1877 U.S. LEXIS 1679
CourtSupreme Court of the United States
DecidedApril 18, 1878
StatusPublished
Cited by91 cases

This text of 96 U.S. 404 (McPherson v. Cox) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McPherson v. Cox, 96 U.S. 404, 24 L. Ed. 746, 1877 U.S. LEXIS 1679 (1878).

Opinions

[410]*410Mr. Justice Miller

delivered the opinion of the court.

The question for our consideration is the spundness of the decree of the court below.

The pleadings show the original bill, an amended bill, and three supplemental bills, and, answers, and replications to the answers.

The charges on which complainant asked the removal of McPherson may be classified into those which affirm a neglect of his duty as such trustee, and into those which show acts and intentions hostile to her. interests.

Of the first class are charges, —

1. That arrears of interest on the bond have been permitted to accumulate, and that he failed to collect such interest or to sell the property, as the deed of trust authorized.

' • 2. That he neglected to attend to having the property insured or the taxes paid, as was his duty; and in this connection she charges that she had paid him $150 for that purpose.

Of the acts which show hostile or fraudulent intentions she •charges, —

. 3. That, on a sale made by the obligors in the bond of part of -the property, he induced her to release the lots so sold and accept thirteen notes of $1,000 each,-secured by a mortgage on them, which notes she supposed'was the first lien on those lots; . whereas, it .turned out that three other notes of like amount, of the, same series, secured by the same mortgage, had been issued and sold to bona fide holders, and that these notes were a prior lien, and endangered her security. She alleges that this was well known to McPherson, who was acting as her agent and trustee,- and was fraudulently concealed from her.'

.4. That he had notified Ford, one of 'the obligors in the bond',, to pay her no more money, and' had thus prevented him from paying to her the interest after it was due.

5. And, mainly, that he sets up a false and exorbitant claim of $5,000 for legal services, and claims a lien on the bond in' his possession, and a right to appropriate the first money paid on said bond to the satisfaction of said elaim.

The answer denies that the deed of trust imposed on him any obligation to collect the interest, or see to the insurance of the houses or to the payment of'the taxes. Denies that he [411]*411ever received any money from her to pay for insurance, or any notice to'_§ell for non-payment of interest or taxes. Denies any Hostile purpose-üowards complainant, and any act or intent inconsistent with his duty as trustee. He admits that he does assert a claim for $5,000 due to the partnership firm of Carlisle & McPherson, for services as attorneys and counsellors, in regard to this same property, and for which He claimed, and now asserts in this answer, a lien on the bond, and a right to hold it until that sum is paid. And he denies that in the transaction by which she released certain lots covered by the deed of trust, and received the note's and deed of trust securing them, that any thing was concealed from her. And in regard to this he says that she was present when the matter was transacted, and received in person the thirteen notes ,and' the money for which the other three notes were sold, and knew well what she was doing.

Testimony was taken on all these issues, the most important of which is that of the complainant and defendant and of Carlisle.

As preliminary to any further, investigation of these issues, it is necessary to determine the defendant’s duties, and his rights under the deed of trust.

After the usual clause of conveyance, it proceeds thus: —

“ In and upon the trusts hereinafter mentioned and declared, and for no other purpose whatsoever, that is to say:.
“In trust: First, To permit the said Charles H. Holden, Charles W. King, and Samuel Ford, their heirs or assigns, to use and occupy the said-described premises, and the rents, issues, and profits thereof to take, have, and apply to and for their sole use and benefit until default be made in the payment of the principal sum of the debt hereinbefore mentioned, or of some instalment of the annual interest.
“Second, Upon payment of any instalment of the principal of the said debt, to release to the said parties of- the first part of said square, which they shall designate in the proportion of two square feet of ground for every three dollars so paid.
Third, And upon full payment of the said debt of thirty-eight thousand dollars ($38,000), and of the interest thereon, and all other proper costs, charges, commissions, and expenses incurred in pursuance, of this trust, to release the said square numbered three [412]*412hundred and twelve (312), or so much thereof as has not been released, unto the' said? parties of the first part, their heirs and assigns, at their proper cost.
“Fourth, And upon this further trust upon default being made in the payment of the said principal sum, or of any interest due on the same, to sell at public auction, on such terms and after such notice as the said trustees or trustee shall deem proper, so much of the said property as they or he shall deem necessary to pay the sum due, and out- of the proceeds in the order following, to pay, 1st, the costs and expenses of said sale, including the usual trustee’s commission; 2d, to pay the amount due the said Mary A. Cox, whether of interest or principal.; 3d, to pay the said Mary A. Cox the residue of said proceeds to an amount not exceeding the principal sum, or the part: thereof unpaid to be received by her in advance, iA whole or part satisfaction, as the case may be, of the said principal sum; 4th, to pay over the residue, if any, to the said parties of the first part, their executors, administrators, or assigns.”

There is here no duty or obligation or right to do more than two things; namely, to make the releases of parts or of the whole of the ground, as the payments entitled the obligors in the bond to have them made, and to sell the land or parts of it,' as their failure to pay might justify, and in making such sale to receive and distribute the money as -required. But it is very clear that the trustees assumed no obligation to look after the taxes or the insurance. The deed of trust does not mention either taxes or insurance. Nor were they bound, or did they undertake by any thing found in this instrument, to look after the payment of the annual interest.. The bond was made payable to complainant, and she alone was authorized to receive the interest, and .to .give a valid receipt for it. Payment to either of the trustees would-have been no defence to a suit by her.

It is very clear, therefore, that as there was no duty imposed upon the defendant as trustee to look after the takes, or insurance, or. the collection of the interest, he was guilty of no neglect in regard to them.

If, as complainant alleges, her interest was -not paid, she had a right to have the two trustees advertise and sell the property, or so much of it as would be necessary to pay what was due. [413]*413But they were not bound to do this, nor had they any right to do it, until she made request; and there is.po pretence that she ever made such request or desired such action.

It is proper to say in this connection that the testimony wholly fails to show the payment of $150, or any other sum, to defendant, to be used in paying for insurance.

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Bluebook (online)
96 U.S. 404, 24 L. Ed. 746, 1877 U.S. LEXIS 1679, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcpherson-v-cox-scotus-1878.