35 Me. 41 | Me. | 1852
— From the bill, answer and proof, it appears that, on the 12th day of September, 1835, one Charles Brown gave three several notes to Charles Trafton, and a mortgage to secure their payment. On the 27th day of June, 1836,
“ Bucksport, June 27, 1836.
“ Received of Charles Trafton three notes of hand, signed by Charles Brown, and dated Sept. 12th, 1835, and indorsed by said Trafton, for the following sums, one for 0283, and interest, payable in three months, one for 0541,50, and interest, in one year, and one for 0541,50, and interest, in two years. Also an assignment of a mortgage deed to said Trafton from said Brown, of a lot of land and premises situate in Bangor, for the security of the payment of said notes. This is to certify that James Swazey is equally interested with me in said notes and the security for the payment of the same, and I hereby agree to account and pay the said Swazey one half of all sums of money received on said notes as collected.
“ Henry Darling.”
On the 16th of Sept. 1836, the defendant Swazey, gave the plaintiff an agreement in these words : —■
“September 16, 1836. — I hereby agree and promise to account for and pay Moses G. Buck one sixth part of the amount of three notes of hand, signed by Charles Brown and payable to Charles Trafton, dated Sept. 12, 1835, and indorsed by said Trafton, one for 0283, and interest, payable in three months, one for 0541,50, and interest, payable in one year, and one for 0541,50, payable in two years, and interest. To be paid when received and in manner as received.
“ Attest, Sr Cobb.” “ James Swazey.”
In addition to the sixth set forth in the agreement last recited, the plaintiff claims to have conveyed to him the interest in the notes and mortgage specified in the following memorandum, which he claims as assignee by indorsement.
“01025,50. “Nov. 5, 1841.
“ Received of George W. Swazey fifty dollars, which was invested in the purchase of three notes (described as above)
“ The sum invested was ten hundred and twenty-five dollars and fifty cents. “ James Swazey.
“Attest, H. Darling.” Indorsed “ Geo. W. Swazey.”
Brown and Trafton both became insolvent, and the mortgage given by Brown to Trafton and assigned to Darling, was by him foreclosed. The plaintiff seeks a conveyance of the premises mortgaged to the extent of his interest as disclosed. The requisite demand to convey has been made. Darling has been defaulted, and may be deemed as taking no exceptions to the plaintiff’s claims except so far as may be necessary for the protection of his legal rights. The defendant Swazey, admits that the purchase of the notes and mortgage was made with the joint funds of Darling and himself, but denies that any trust has arisen between him and his co-defendant in consequence of such purchase, and insists that his rights as against Darling, and the plaintiff’s claims as against him, rest only in contract, and that on such contracts the remedies existing at common law are ample for the protection and enforcement of all just claims, without the interposition of a court of equity.
The first question to be determined is, what were the relations subsisting between Darling and Swazey, under and by virtue of their joint purchase and of the memorandum of June 27th. The bill alleges, and the answer of Swazey admits, that the purchase was made by Darling with joint funds and on joint account. It is well settled that when one makes a purchase in his own name, but with funds belonging to another, that the purchaser holds the property thus acquired in trust for the person by whom the funds were furnished. So where it is made with joint funds and the conveyance is made to one only of the parties interested in the purchase money, he holds it in trust for his associate to the extent of the funds by him advanced. The same principle applies where securities are taken in the name of one only who may be interest
So where the trust is in writing, the law requires no particular form of words, by which it is to be evidenced. The letters of a party to be charged, his memoranda, notes or papers left by him and found after his decease, h.is answers to a bill in equity, have been a sufficient foundation for judicial action. 2 Story’s Eq. § 1201. By the memorandum of June 27th, it appears that Swazey was equally interested with Darling in the notes transferred and the accompanying mortgage assigned to him. If this had been all, it must most unquestionably have been deemed a sufficient, declaration of trust, in conformity with the decision of the Court in Fisher v. Fields, 10 Johns. 496. But the memorandum, after reciting the joint interest of the two defendants, adds these words, “ and I hereby agree to account and pay the said Swazey one half of all sums of money received on said notes as collected.” Does this discharge the trust obviously arising from the antecedent facts as recited, 'and if the notes should by levy or foreclosure be converted into real estate, leave it in the hands of Darling relieved from all trust obligation ? Without the addition of these words the law would imply, in a case of a joint purchase of the notes, a promise to account for their proceeds, and this clause, merely asserting an implied promise, cannot be considered as destroying the trust, so that Darling could hold the funds or their proceeds in whatever form received free from such trust. It negatives no facts by which the trust is created.
In case of a mortgage the notes are deemed the principal and the land merely accessary thereto. When one of many notes secured by mortgage is transferred, and after such transfer the mortgagee forecloses his mortgage, he holds the land foreclosed in trust for the unpaid mortgage notes, in whose hands soever they may be, in the ratio such notes bear to
The notes being held in trust by Darling, the same trust would attach to the land which went to constitute their payment. The memorandum of June 27 looks only to a money payment. But if Darling were permitted, as against Swazey, to hold these lands in his own right, he would • be without remedy. If, by the notes being in whole or in part paid by a foreclosure there is no trust, and a court of equity would have no jurisdiction, — ’then neither a sale could be enforced nor a conveyance compelled, and the time might never arrive when Swazey would be able to derive any benefit from his investment. The equal interest between these parties is not merely in the notes, but “ in the security for the payment of the same.” By the express declaration of Darling in writing, the interest of Swazey is not to be confined to the mere notes but attaches likewise to the security. By operation of law, the notes become paid in Avhole or in part by a foreclosure of the mortgage given for their security. The security thus changes its relation and becomes principal, but the interest of Swazey equally exists therein, when the title became perfected by foreclosure as Avhen the real estate Avas collateral only to the notes.
As betAveen Swazey and Darling, the conclusion is that a trust arose and that Swazey might compel a conveyance to the extent of his interest. He Avas the cestui que trust and had an interest which he might assign or sell and Avhich by the laws of descent Avould pass to his heirs.
The bill alleges that the plaintiff Buck, furnished funds to the amount of one sixth, and that Swazey, as his agent, invested them in the purchase of so much of the notes and mortgage. This is explicitly denied by the answer, which states that the purchase was made by Darling .with his funds and those of the defendant Swazey,- and that Buck subsequently to the purchase advanced the funds for which the receipt of Sept. 16 was given. If the purchase had been made with money advanced by Buck to Swazey and by
By the contract of Sept. 16, Swazey gave the plaintiff certain rights. The receipt of that date does not disclose in whom the legal title to the notes and mortgage was vested. But having a trust estate in notes and mortgage and consequently the means to coerce a conveyance, Swazey would be equally compelled to convey when he should acquire a title, as if the title had been in him at the time of making such contract. For a valuable consideration, Swazey agreed to account for and pay one sixth of the proceeds of the Brown notes “ when received and in manner as received.” So far therefore as regards him, the case stands as if the notes and mortgage had been originally transferred to him and he had foreclosed the mortgage. If then the land was taken in payment, Swazey would be bound to make the same payment. The clause was obviously beneficial to him, as he would by the terms of his agreement be at once discharged upon paying or tendering payment “in manner as received.” In no other mode could he perform his stipulations. The case then resolves itself into the common one of a contract to convey specifically, and which the Court will enforce though the party may have a remedy at common law. Ensign v. Kellogg, 4 Pick. 1. By this contract Buck became entitled to his part of whatever might be received in payment of the notes therein described, “ to be paid when received and in the manner received.” If the title to the notes and mortgage had been in
By the memorandum of November 5, 1841, given by James Swazey to George W. Swazey, it is clearly admitted that fifty dollars had been invested in the original purchase of the Brown notes and mortgage by the latter. As the notes have by the foreclosure been paid in whole or in part by the land mortgaged, the same investment, and to the same relative amount, must be deemed as continuing in the land after such foreclosure, as existed previously in the notes.
By the terms of this contract, the interest was subject to the order of the party interested, and though that would not entitle the assignee to maintain in his own name an action at common law, yet in equity the rule is well settled to be otherwise. 2 Story’s Eq. <§> -1040.
The interest of James Swazey, in the original transaction, is one which would pass by assignment or transfer or by will. If these contracts signed by him were to be viewed as assignments pro tanto, of his interest in the notes and mortgage, the .same results would follow. In Lett v. Morris, 4 Sum. 607, an order to pay out of a particular fund was decreed to be an equitable assignment to such extent. In all cases of assignment of a debt the assignee will be entitled to the full benefit of such securities as the assignor may have, unless there is an express stipulation otherwise between the parties. Pattison v. Hull, 9 Cow. 747.
As in this case the plaintiff is ultimately entitled to a conveyance, Darling must be decreed to hold the land in trust for him and a conveyance may be directly enforced in his favor. 2 Story’s Eq. <§> 1250. The conveyance when made will discharge the defendant Darling, from so much of his contract as shall thereby have been performed.
The answer of Swazey refers to certain unsettled matters
As Darling has submitted to a default and is to be regarded as a mere stakeholder, the conveyance as prayed for against him must be decreed, but without cost on his part. As to Swazey, the plaintiff is entitled to a decree against him with costs.
