Sayles Others v. Tibbitts Others

5 R.I. 79

• Court: Supreme Court of Rhode Island
• Decided: September 6, 1857
• Status: Published

Opinion

Ames, C. J.

This bill is, in substance, brought by the administrator of the estate of the late George Wilkinson, against the administrator of the estate of the late William Wilkinson, for an account of the proceeds of sale of certain property, sold by William Wilkinson in his lifetime, as mortgagee, under powers of sale contained in two mortgages, executed to him, about the middle of June, 1829, by Abraham and Isaac Wilkinson, for his indemnity as their accommodation indorser; he being also, at the time of the sale, one of said Abraham and Isaac’s assignees, under their general voluntary assignment for the benefit of their creditors. The plaintiff’s claim to this account, as stated in his bill, is founded upon a transfer of the surplus proceeds of the mortgaged property, executed on the 28th day of March, 1853, to his intestate, for the consideration of five hundred dollars, by the surviving assignees of Abraham and Isaac Wilkinson under their voluntary assignment; his intestate being, at the time of taking said transfer, also entitled to an account of such proceeds, as a large creditor of said Abraham and Isaac.

The right of the complainant to the relief sought by this bill is met, in limine, by the objection, that the transfer of the claim upon which it is founded, is void as against public policy, on the ground of champerty or maintenance ; the transfer being, in truth, as it is alleged, a transfer of a claim for a tort or wrong.

It is true, that a court of equity will not, any more than a court of law, encourage by its process the commission of the offence of maintenance, but on the contrary, will refuse to enforce a contract which it sees to be tainted with it. The transfer objected to on this ground, was, however, made by those authorized under their trust to make it, to one already largely interested as a creditor, under the assignment, in the claim transferred; and may be regarded, as a mode properly adopted by the plaintiff’s intestate, — as the only one under the circumstances of the trustees, by which he and they could realize, for the mutual benefit of all concerned, what might be justly due to them. The cases of Hartley v. Russell, 2 Sim. & Stu. 244, Hunter v. Daniel, 4 Hare, 431, and the remarks of Chancellor Walworth in Ward v. Van Bokelen, 2 Paige, 295, sufficiently indicate, that the taint of maintenance is not deemed, in a court of equity, to extend to a fair bond fide purchase of a chose in action, made for the purpose of securing or recovering payment of an antecedent debt, especially where, as in this case, the purchaser was already beneficially interested in the very claim by him purchased. We must ignore, too, all distinctions, if we confound, under such circumstances, an assignment of a balance due from a trustee who has neglected to account, with a purchase by a stranger of a claim for damages for an ordinary tort.

The bill states, that the plaintiff’s intestate was a creditor of Abraham & Isaac Wilkinson at the time of his purchase of this balance, and joins Barney, one of the surviving assignees from whom the purchase was made, as a plaintiff, and Fessenden, the other, as a defendant, which gives rise to two other objections to the bill; 1st, that it is multifarious, and 2d, that Fessenden should have been joined as a plaintiff in the bill, instead of being made, as he is, a defendant to it.

The first of these objections proceeds upon the notion, that the plaintiff, as the administrator of George Wilkinson, claims an account upon two distinct grounds ; one, that his intestate was a creditor of Abraham & Isaac 'Wilkinson, entitled to an account as such by virtue of their assignment, and the other, that his intestate was entitled to it by virtue of the transfer to him by the assignees of Abraham & Isaac Wilkinson of the balance due from William Wilkinson, as mortgagee, to the assigned fund; and that, by making Barney, one of the assignees who joined in the transfer, a party plaintiff, he also is to be considered as claiming an account, as assignee of Abraham & Isaac Wilkinson.

Without looking farther for an answer to this objection, it is enough to say, that it proceeds upon a strained and unfair construction of the bill. The bill states, indeed, that George Wilkinson, as a creditor of Abraham & Isaac Wilkinson, whose claim was embraced by their assignment, was entitled to an account of this balance; but that after waiting some time subsequent to the death of William Wilkinson, in the hope that the assignees of Abraham and Isaac would pursue the estate of William for it, he took an assignment of this balance, by way of purchase, to himself; and the only relief specially prayed in the bill, which is the true test, is, that upon the ground of this assigvmient, payment of the' assigned fund may be decreed to the plaintiff’s representative. His claim, as a creditor under the assignment, is not, therefore, stated in the bill as the ground upon which an account is asked to be awarded to him, but rather as the reason and excuse for his taking the assignment; sufficient too, as we have before considered, and therefore properly stated, to exculpate the transaction from the charge of maintenance. So again, although Barney, one of the surviving assignees of Abraham & Isaac Wilkinson who joined in the transfer to the plaintiff’s intestate, is made a plaintiff, no relief is asked for' him; and thus this objection of multifariousness falls to the ground.

The other objection just mentioned, to wit, that Fessenden, as well as Barney, should have been joined as a plaintiff in this bill, is equally without foundation. The assignment we are considering, was not of a legal chose in action, but of an equitable interest, in the nature of a chose in action; and it is difficult to perceive, the assignment being absolute, the necessity of. making either of the assignors of the chose, parties to the bill. 1 Dan. Ch. Pract. 254; Blake v. Jones, 3 Anstr. 651. They are, at best, but nominal parties, in favor of whom no decree is asked or can be made; and if, in such a case as this, it be any objection that they are joined as parties at all, the misjoinder of the one as plaintiff, inasmuch as it does not materially affect the decree, can only be taken advantage of by demurrer, and the mis-joinder of the other, as defendant, can only be taken advantage of in the same mode, and by Mm; and neither misjoinder can be reserved until the final hearing. Story, Eq. PL 544 and notes; 1 Dan. Ch. Pract. 350 and notes.

Another defence to the maintenance of this bill is, that a bill for the same matter was dismissed by this court, generally and with costs, at the March term, 1853. It appears by the record, that before any replication was filed, and before hearing, the plaintiff, having moved that his bill be dismissed, without prejudice, on the ground of a defect of parties and also of the conveyance under which he claimed his account, the bill was dismissed generally, with costs. It is only a dismissal after hearing upon the merits, which, according to the general practice of the court, can be pleaded in bar to a new bill for the same matter; Jenkins v. Eldridge, 3 Story, 319; 2 Dan. Ch. Pract. 753; and certainly, the dismissal of a bill with costs, upon the plaintiff’s own motion before a hearing, which is his right, was never supposed to constitute a bar to a new bill. 2 Dan. Ch. Pract. 929. The entry, “ dismissed with costs, ” is sufficiently explained by the state of the pleadings in the case at the time of its dismissal, as well as by the accompanying motion of the plaintiff; and if it were not, we know no rule of law, or practice, which would prevent a party from aiding or explaining a record produced by or against him, by averments and proofs in perfect consistency with it. Besides, upon examination of the bill dismissed by this court in 1853, and a comparison of it with the bill now before us, it appears that it was not for the same matter; that bill being founded upon a conveyance of the claim here sought to be enforced, which was inoperative, because executed by only one of the two surviving assignees of Abraham & Isaac Wilkinson ; whereas, this is founded upon a new title to the. claim sought to be enforced, gained by a conveyance executed by both the surviving assignees. Upon either of these grounds, this defence is not maintainable.

But the main ground upon which the defence to this bill has been pressed, is, the lapse of time occurring between the accruing of the liability sought to be enforced by it and the commencement of proceedings — a period of upwards of twenty years, reckoning from the time of the sale of the mortgaged property by William Wilkinson to the filing of the first bill in this court, and of upwards of twenty-five years, reckoning from the same time to the filing of this bill. In every mode in which time can operate to bar an equitable remedy, whether by force of the statute of limitations, on the equitable ground of laches of the complainant and staleness of the demand, or as affording presumptive evidence of the settlement of the account now sought to be opened, it has been brought to our attention at the hearing, as disentitling the plaintiff to relief; and certainly, when, as here, the account is not asked until the death of the party most able to render it, we are disposed to give to the lapse of time all the effect, which the settled rules of the system of jurisprudence we are administering will permit.

The facts of this case, to which the defence from lapse of time is sought to be applied, lie within a very narrow compass. A day or two before their failure, and a? a part, no doubt, of their preparation for it, Abraham & Isaac Wilkinson mortgaged the property, an account of the proceeds of the sale of which is sought by this bill, to then.’ brother William, the defendant’s intestate, with a power of sale, to secure him as their indorser; and immediately afterwards assigned the same, subject to the mortgages, with other property, to William, as a joint assignee with Nathaniel Searle, Hiram M. Barney, and Benjamin Fessenden, for the benefit of the creditors of the assignors. William Wilkinson did not, under his power, sell the mortgaged property until about two years after he had accepted the trust of the above assignment; so that at the time when the proceeds of sale came to his hands for his own relief as indorser, and for payment of the surplus, if any, to the creditors of A. & I. Wilkinson, that is, at the time he became accountable for the proceeds of sale, he occupied the double position, of the party to account, in his character of mortgagee, and of the party to be accounted with in the first instance, as co-assignee. From the nature of legal remedies, no action at law would lie against him to recover any surplus of these proceeds which might remain in his hands, either at the suit of his co-assignees, or of the creditors entitled under the assignment. "When it is said by the counsel for the respondent, that "William Wilkinson was suable at law, for these proceeds, in the old common-law action of account, he forgot that by the common law, this action required for its maintenance a privity of contract between the parties to it, which was never recognized as growing out of the mere relation of co-tenants or co-trustees; (F. N. B. 118; Co. Lit. 172 a, 186 a, 200 b; 1 Yin. Abr. tit. Account C.;) and that the extension of this remedy to parties thus related, both here and in England, is by statute, and as to the latter, partial only — not including co-trustees under-trusts created by deed. Occupying this double position then, William Wilkinson, in the view of the law, held the surplus, if any, of these proceeds of sale, as a trustee under the express technical trust of the assignment of A. & I. Wilkinson, for which he was accountable to the creditors beneficially interested therein, or to his co-trustees, only in equity. Against accountability under such a trust, it is well settled, that the statute of limitations does not run in a court of equity, as it does against accountability under a legal trust, or one enforceable also by an action of law. Nor will delay to call him to account, in general, unless indeed it be very long, avail such a trustee, either against the body of creditors entitled, or against his co-trustees, on the ground of laches ; since it is far more imperative upon him, under such circumstances as those here proved, from his superior knowledge of the state of the transaction, to render an account, than upon them to compel him to do so. Several years elapsed after the assumption of this trust, according to the account presented by the respondent, during which his intestate was occupied in selling the property and applying the proceeds in liquidation of the claims, made by the terms of the mortgages to him a lien upon it; in other words, in ascertaining the amount for which he would be accountable to his co-trustees, and responsible to the creditors under the assignment. In the mean time, and within a year after his sale of the mortgaged property, the controlling assignee, Searle, died, and Barney removed to the West, and ceased from that time to act in the trust; leaving only himself and Fessenden to look after the interests of the creditors under it. It not only does not appear in proof that Fes-senden was apprised of the state of the accounts between the defendant’s intestate and the assigned estate, but it is expressly proved by him that he had no knowledge upon the subject, and that the defendant’s intestate did not communicate with him upon it. These facts, even if we throw out of view the equities of the body of creditors, to whom laches would not be imputed, as not represented in the claim made by the plaintiff, bear strongly upon the question of the comparative laches of the defendant’s intestate and his co-trustees, and conclusively rebut any presumption which might arise, from the lapse of time, that this account has been settled between them. The complainant is entitled therefore to an account of the proceeds of sale assigned to his intestate, and the case must go to a master, for the purpose of taking it. Decree accordingly.