Sanders v. Sanders

20 S.W. 517, 56 Ark. 585, 1892 Ark. LEXIS 210
Supreme Court of Arkansas·Decided November 12, 1892·Published·Cited by 3 cases

Opinion

BatteE, J.

Appellant broug'ht this action in the White circuit court in chancery, to subject the homestead of Albert P. Sanders, deceased, to sale to pay a claim which he holds against the estate of the deceased. At. the time Albert P. died, he left a widow and a minor child surviving him. This suit was brought while the widow remained unmarried, and the child a minor.

The claim sued on, as we find from the evidence,, originated as follows : In January, 1882, T. N. Sanders, the appellant, owned a small stock of hardware and tinners’ tools, which were insured for his benefit by the Eire Association of Philadelphia, to the extent of $500, against fire. In February following the entire stock was burned. The loss was adjusted at $500. Before it was paid, Witter, Eangstaff & Co., who were creditors of T. N. Sanders, brought an action against him ; sued out an order of attachment, and caused the Fire Association to be summoned as a garnishee.

Albert P. and Joseph W. House were then attorneys at law, and associated as partners under the firm name of House & Sanders. T. N. Sanders employed them in his suit. The Fire Association paid the $500 to the sheriff who held the order of attachment. To relieve the money from the. attachment and garnishment, T. N. Sanders caused House & Sanders, in their individual capacity, to execute a bond to the sheriff, conditioned that, if the attachment was sustained, the $500 would be forthcoming and subject to the order of the court. The bond was executed upon the condition, and with the understanding and agreement, that House & Sanders should hold the money until the suit by the creditor was decided. .In pursuance of this agreement, a check for the $500 was delivered to Albert P., and he collected it and used the money. Appellant made out a claim against his estate for the money and presented it to the administrator, and a part of it was allowed by the administrator and the probate court.

Was the homestead of the deceased subject 'to sale to satisfy the debt contracted by the conversion of the money ? Appellant contends that it was a debt for moneys collected and used by an attorney, and that the homestead, under section 3 of article 9 of the Constitution, was subject to sale under execution or other process which could have been issued, in the lifetime of the deceased, on a judgment for the same. The section referred to is as follows : “ The homestead of any resident of this State who is married or the head of a family shall not be subject to the lien of any judgment, or decree of any court, or to sale under execution or other process thereon, except such as may be rendered for the purchase money or for specific liens, laborers’ or mechanics’ liens for improving the same, or for taxes, or against executors administrators, guardians, receivers, attorneys for moneys collected by them and other trustees of an express trust for moneys due from them in their fiduciary capacity.”

Questions similar to the one presented for our decision in this case have been decided by courts under the bankrupt acts of the United States. The bankrupt act enacted by Congress in 1841 provided that all persons whatsoever, residing in any State, territory or district of the United States, owing debts which shall not have been ‘ ‘ created in consequence of a defalcation as a public officer, or as executor, administrator, guardian or trustee, or while acting in any other fiduciary capacity,” shall, on a compliance with the requisites of the bankrupt law, be entitled to a discharge under it; and further declared, among other things, that no person should be entitled to a discharge who should “apply trust funds to his own use.” In the case of Chapman v. Forsyth, 2 How. 202, these clauses were construed by the Supreme Court of the United States. “The case was an action of assumpsit for the proceeds of 150 bales of cotton shipped to and sold by the defendants as brokers or factors of the plaintiff. One of the defendants pleaded a discharge in bankruptcy.” Mr. Justice McLean, speaking for the court, said : “If the act embrace such a debt, it will be difficult to limit its application. It must include all debts arising from agencies ; and indeed all cases where the law implies an obligation from the trust reposed in the debtor. Such a construction would have left but few debts on which the law could operate. In almost all the commercial transactions of the country, confidence is reposed in the punctuality and integrity of the debtor, and the violation of these is, in a commercial sense, a disregard of a trust. But this is not the relation spoken of in the first section of the act. The cases enumerated, ‘the defalcation of a public officer,’ ‘executor, ’ ‘ administrator, ’ ‘ guardian, ’ or ‘ trustee, ’ are not cases of implied but special trusts, and the ‘ other fiduciary capacity ’ mentioned, must mean the same class of trusts. The act speaks of technical trusts, and not those which the law implies from the contract. A factor is not, therefore, within the act. The view is strengthened and, indeed, made conclusive by the provisions of the fourth section, which declares that no ‘ merchant, banker, factor, broker, underwriter, or marine insurer,’ shall be entitled to a discharge, ‘ who has not kept proper books of accounts.’ In answer to the second question, then, we say, that a factor, who owes his principal money received on the sale of his goods, is not a fiduciary debtor within the meaning of this act.”

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Sanders v. Sanders, 20 S.W. 517, 56 Ark. 585, 1892 Ark. LEXIS 210 (Ark. 1892).

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