| N.C. | Jun 5, 1831
The bill prayed a discovery from the president, Mr. Boylan, and specific relief by a sale of the land, and payment to the plaintiffs of the sums they had severally advanced as sureties of Davis.
The president and directors of the State Bank, in their answer, denied the existence of any trust in favor of the plaintiffs in the land purchased by them of Jeffreys, and insisted that they were purchasers for value and without notice. They averred that if Jeffreys held in trust for the plaintiffs, that they, the plaintiffs, had not only authorized him to sell, but had actually ratified the sale made by him, and that (62) they were not bound to see that the purchase money was applied to the extinguishment of the claims of the plaintiffs.
Mr. Boylan, in his answer, stated that, believing several notes held by the State Bank, upon which Jeffreys was an endorser, to be doubtful, he, in March, 1820, made a treaty with Jeffreys whereby he purchased for the bank the land mentioned in the bill; that he gave for the land $5,000, which was at least $1,000 more than he would have given in cash or undoubted securities; that when the contract of sale was made, he knew nothing of the title to the land, further than from information then derived from Jeffreys, viz., that he (Jeffreys) had purchased it under a *59 trust deed to William Moore, and he denied notice of any claim or interest of the plaintiffs in or to the land, or that Jeffreys, in any way, held it in trust for them.
The bill was taken pro confesso as to Jeffreys, and he was examined under an order to that effect. He deposed that the plaintiffs and himself, together with several other persons, were sureties for Davis to a large amount; that to secure themselves they procured a conveyance of all Davis's estate, including the land in question, to William Moore; that at the sale by Moore he purchased that land, upon a verbal understanding and consent of the sureties of Davis that he should have the sole power of selling it, subject to an account with the sureties; that, in addition to that land, he also sold to the State Bank his manor plantation for $6,288; that upon these two sales he received sundry notes, including two notes of the plaintiff Hunt for $1,328 and $171, and one note of the plaintiff Harrison for $393; that when he mentioned to Hunt the terms upon which he had sold the land purchased of Moore, he (Hunt) expressed much satisfaction and delight; that afterwards the persons interested in the sale met at his house to settle the proportion of the purchase money respectively due them, but that an altercation ensued, and they separated without coming to any conclusion, and that then, for the first time, Hunt expressed his dissatisfaction with the sale. Upon his cross-examination he stated that while Mr. Boylan was at his house, when the treaty of sale was concluded, he wrote the following (63) letter to the plaintiff Hunt: "I have a chance of selling the Davis tract of land at $5,000 taken up in bank. As there has been something said about it, I wish you to come up immediately. Mr. Boylan is at my house, and will wait till I have a return." That Mr. Boylan did not, as he thought, know of the writing of that letter, but was aware of Hunt's claim on the land. From every circumstance connected with this case I am led to believe that Jeffreys had authority to sell the land, but was to apply the purchase money for the benefit of the plaintiffs and others interested in the deed of trust to Moore; and as he was authorized to sell the land, no distrust of his fidelity in accounting for that purchase money was manifested at the time of the sale. The substance of the complaint, then, is not that he sold the land, but that the plaintiffs have been defrauded of the purchase money; and the question arises whether the bank is liable for the misconduct of Jeffreys, the *60 trustee. If there was any ground to believe that there was any collusion or contrivance between the officers of the bank and the trustee, our decision would be different. The defendant, the president of the bank, denies that he had notice of any trust on behalf of the plaintiffs; but I cannot rest upon that. Jeffreys in his deposition proves something very much like notice. He is asked whether Boylan knew that the plaintiffs Hunt and Harrison had any interest in the sale of the land in controversy. He answers that he had, so far as regarded Hunt; and this corresponds with the note of Jeffreys to Hunt, that "Boylan was at his house, and would wait till he had a return" to that note. But admitting that Boylan had notice, what was it? That Jeffreys had authority to sell the land, and that there was a personal confidence reposed in (64) him that he would properly apply the proceeds of the sale for the benefit of those interested in the deed of trust executed by Davis to Moore. There was no trust or equitable lien upon the land in the deed from Moore to Jeffreys. Jeffreys held a clear title to the land. But it was admitted by all concerned that the sureties had an interest in it. And if Boylan knew it, also, how impossible it was for him to know of the particular advances made by each surety, and what particular part of the purchase money he was entitled to receive. It appears that some debts were paid by the sale of the land for which Jeffreys was personally responsible. But it also appears that he sold for a great price — more than $6,000 — some of his own lands to the bank; so that, independently of his own debts paid off by the sale of the two tracts of land, he received bonds and money to a considerable amount, perhaps enough to enable him to do justice to the plaintiffs, if he had no other resources, but has not been called upon by process of law, as far as appears, to come to a settlement with the plaintiffs. And if the bank was even ultimately liable to the plaintiffs for the purchase money, it would be iniquitous that they should be called upon to pay it twice, when Jeffreys, to whom they had once paid it, had not been called upon to account.
I think, upon the whole view of the case, that as Jeffreys was trusted by those interested to sell the land, he was trusted to receive the proceeds of the sale; and that in the absence of collusion and fraud between him and the bank, the latter is not liable. None has been proved. Full value was given by the bank for the land, and it does not even satisfactorily appear that Jeffreys has misapplied the consideration which the bank gave for the land. But I have not particularly adverted to that, as it is not now in contestation between the parties in this suit.
I am of the opinion that the bill be dismissed, with costs.
PER CURIAM. Decree accordingly.
Cited: Grimes v. Taft,
(65)