Mitchell v. Bank of Indianola

54 So. 87 | Miss. | 1910

Anderson, J.,

delivered the opinion of the court.

The appellant, D. E. Mitchell, filed his bill in the chancery court of Leflore county, against the appellees, the Bank of Indianola, A. F. Gardner, Mrs. J. E. Gardner, Mrs. M. L. Pitts, T. R. Henderson, W. M. Hamner, and R. V. Pollard, to which bill appellees demurred, which demurrer was sustained, and bill dismissed, from which decree this appeal is prosecuted. The bill sets up substantially these facts: That appellant, Mitchell, on the 29th day of May, 1905, deposited with' the appellee the Bank of Indianola, the sum of nine thousand five hundred dollars, to be held by such bank in trust for the following purpose: Appellant was negotiating with one Shepard and others for the purchase of certain lands owned by them, and in order to insure good faith on the part of appellant it was agreed between the parties that, pending the negotiations of purchase and the examination of the title to the lands, this money so deposited with the bank should be held by it, and in the event the title to the lands was found not to be good it should be returned to appellant; that on examination the title to the lands was not approved by appellant, and the negotiations ended, and he was entitled to have said money returned to him by the bank; that said sum of-money so deposited was held by the bank as agent and trustee of appellant, “to be returned to him if the contract with Shepard and others should not be executed;” that on the 10th of June, 1905, one Prime, assuming to act as the agent of appellant, entered into another contract with the appellees, except the Bank of Indianola, for the purchase of lands owned' by them, by the terms of which the nine thousand five hundred dollars so deposited in the Bank of Indianola by appellant was forfeited to the appellees, except said bank; that accordingly the Bank of Indianola, through its president, the appellee A. F. Gardner, distributed the said sum of money as forfeited to the appellees, except the bank. The prayer of the bill is for a decree against the bank for the whole amount of the nine thousand five hundred dollars, with interest, for a breach of trust, and against the appellee A. F. Gardner for the whole amount, with interest, on the ground that without authority he, as president of the bank, withdrew such funds from deposit and distributed the same, and against each of the other appellees for the amount, with interest, so distributed to them.

It is contended for appellees (and the court below so held) that a court of equity is without jurisdiction .of this cause; that the subject-matter of the suit is of exclusive legal cognizance. Section 147 of the Constitution of 18901 has no application, because the court below declined jurisdiction. It is only when the trial court erroneously assumes jurisdiction, that it applies. In our judgment, the reasoning of the supreme court of the United States, in Clews v. Jamieson, 182 U. S. 461, 21 Sup. Ct. 845, 45 L. Ed. 1183, which is amply supported by authority, is unassailable, and conclusive of the question here involved for the appellant. We quote:

“It is undisputed that the defendants, the governing committee of the stock exchange, have in their hands the sum of fourteen thousand dollars, the absolute title to which they do not claim. That sum was'deposited with them by Schwartz & Co. and Jamieson & Co., each depositing one-half, for the purpose of thereby securing the performance of the contract entered into by those parties, and which sum was only to be taken from the possession of the governing committee for the purpose of fulfilling the condition upon which its deposit with the committee was made. As that committee had no personal interest in or title to the fund, and it was placed in its possession in the trust and confidence that it would see that the purposes of the deposit were fulfilled and-the moneys paid out only in'accordance with the terms of the trust under which it was deposited, there can be no question that the fund thereby became a trust fund in the possession of the governing committee, and the disposition of which in accordance with the trust those members were called upon to secure. The complainants claim that, pursuant to the conditions of the trust, they were entitled to the money deposited with the committee. It is shown that the money deposited by Schwartz & Co. was deposited Tby them for and in behalf of the complainants, and Schwartz & Oo. lay no claim to the fund or any portion of it. Complainants demanded from the committee the payment of the whole fund to them, on the ground that they were entitled to such payment by the terms of the trust, and becausé of the violation of the contract by Jamieson & Co., to secure which the latter deposited seven thousand dollars of the fund in question. The committee has refused to pay over any portion of this sum to complainants, although it lays no claim to it, or any portion of it, on its own behalf. There is a dispute in regard to the right of the complainants to any portion of this fund, and a refusal on the part of the committee to pay it over to them. By reason of the facts, the committee occupied, from the time of the deposit of the funds, a fiduciary relation towards the parties depositing it, and it became a trustee of the fund, charged with the duty of seeing that it was applied in conformity with the provisions creating it.

“Pomeroy, in his work on Equity Jurisprudence, second edition, instances, among other equitable estates and interests which come within the jurisdiction of a court of equity, those of trusts. In volume 1, at section 151, he says: “The whole system fell within the exclusive jurisdiction of chancery. . The doctrine of trust became and continues to be the most efficient instrument in the hands of a chancellor for maintaining justice, good faith, and good conscience; and it has been extended so. as to embrace, not only lands, but chattels, funds of every land, things in action, and moneys.’ All possible trusts, whether express or implied, are within the jurisdiction of the chancellor. In this case the committee, as trustee, was charged with the performance of some active and substantial duty in respect to the management and payment of the funds in its hands and it was its duty to see that the objects of its creation were properly accomplished. The fact that the relief demanded is a recovery of money only is not important in deciding the question as to the jurisdiction of equity. The remedies which such a court may give ‘depend upon the nature and object of the ,trust. Sometimes they are specific in their character, and of a kind which the law courts cannot administer; but often they are' of the same general kind as those obtained in legal actions, being mere recoveries of money. A court of equity will always, by its decree, declare the rights, interest, or estate of the cestui que trust, and will compel the trustee to do all the specific acts required of him by the terms of the trust. It often happens that the final relief to be obtained by the cestui que trust consists in the recovery of money. This remedy the courts of equity will always decree when necessary, whether it is confined to the payment of a single specific sum or involves an accounting by the trustee for all that he has done in pursuance of the trust, and the distribution of the trust moneys among all the beneficiaries who are entitled to share therein.’ 1 Pom. Eq. Jur., § 158.

“In cases where the equity doctrine of trusts has been extended so as to embrace other relations of a fiduciary kind, while it may not be. said that a court of equity possesses exclusive jurisdiction, yet it is well settled that in such case there is so much of the trust character between the parties so situated that the jurisdiction of equity, though not exclusive, is acknowledged. 1 Pom. Eq. Jur., § 157. ... In Marvin v. Brooks, 94 N. Y. 71, it was held that an agent who had been intrusted with his principal’s money to be expended for a specific purpose might be required to account in equity, and that upon such an accounting the burden was upon him to show that his trust duties had been performed and the manner of their performance. The jurisdiction was placed upon the ground of a fiduciary or trust relation, and it was held that a court of equity had jurisdiction over trusts and those fiduciary relations which partake of that character, and in such cases the .right to an accounting is well established; but it was held that the existence of a bare agency was not sufficient. It must be an agency coupled with some distinct duty on the part of the agent in relation to funds or some specific property.. In 2 Story’s Eq. Jur. (12th Ed.) at section 975a, it is stated, that in general a trustee is suable in equity in regard to any matters touching the trust. In Oelrichs v. Spain, 15 Wall. 211, 228, sub nom. Oelrichs v. Williams, 21 L. Ed. 43, 44, the court remarked that, there being an element of trust in the case, that element, wherever it exists, always confers jurisdiction in equity. . . . The maintenance of this suit- enables the whole question between all the parties to be determined therein, and prevents the necessity of any action at law or other proceeding in the courts for the purpose of determining the ultimate and final rights of all the. parties to this suit. Such relief cannot be obtained in any one action at law. ’ ’

It is true, as contended, that, as between a bank and its general depositors there exists only the ordinary relation of debtor and creditor. But that is not this case. This fund was deposited with the bank in trust for a specific purpose, viz., to be returned to appellant if the title to the lands was found not to be good. And the fact (if it be true) that the fund was commingled with the general assets of the bank would make it none the less a trust fund. - Reversed cmd remanded.