6 Johns. Ch. 1 | New York Court of Chancery | 1822
The defendant is called upon to account to the plaintiffs, as the representatives of his deceased partner, for moneys received by him in trust for the partnership.
If a preliminary objection, as to the want of parties, can
The defendant objected, in the first answer, and, also, at the hearing, to a want of parties; and he contends, that the cestui que trusts, mentioned in the deed of the 31st of ■May, 1800, ought to have been made parlies to the bill.
The cestui que trusts referred to, and provided for, in that deed, were required to become parties to it within twelve months, to entitle themselves to the benefit of its provisions. The deed bears date the 31st of May, 1800, and the caption, preceding the signatures of the creditors, bears date the 29th of April, 1801; and the creditors, if they subscribed within the year, must have subscribed between the 29th of April, and the 31st of May, following. There is no evidence in the case, at what time or when they subscribed, and, perhaps, it would not be too rigorous to require proof, in positive affirmance of the fact of the 'subscriptions within the year, by a defendant, who, at this late day, raises the objection of a want of parties. But, admitting the presumption of a seasonable subscription, the strongest answer to the objection is, that the creditors, referred to in the fifth clause of the trust deed, and who subscribed to the conditions of the deed, have lain by since May, 1800, and have suffered twenty years to elapse, Without asserting their claims against the trustees under that deed. In that interval of time, there has been almost -a continued controversy between the assignees of Robert Murray &f Co. and the defendant, touching those funds. The presumption, now, is, that the claims of those creditors have been satisfied or abandoned. This seems to be .a necessary inference from the lapse of time and the continued silence of the creditors, during all the litigations concerning the right and title to those funds. It would have been almost impossible for them to have slept quietly during the din of the controversy, if they had subsisting
The original bill considered the moneys, for which the defendant was to account, as having been received by him as trustee under the trust deed of 1800; but the supplemental bill charges the defendant to have received under the order above referred to, more than sufficient to satisfy all the objects of it, and to have received upwards of 90,000 dollars under it, and that he has misapplied those funds, and kept the intestate in ignorance of the receipt and application of the funds under that order.
One great question in the case is, whether the defendant shall not be held to account for the funds specified in that order, on the foot of the order. The order was drawn by Robert Murray Sf Company, upon Charles Murray, in favour of the defendant; and the moneys received for the property specified in it, must have been received under it, and could not have been received under either of the trust deeds, because, the order was a specific appropriation of the property, and that property was not,
The defendant has, again and again, admitted, that the funds for which he is called upon to account for, or the principal part of them, were received under the order of 1797, and belonged to the house of Murray Mumford. Thus, in an affidavit made by the defendant, and read before this Court on the 8th day of December, 1817, (and which appears in the exhibit in this cause, containing the defendant’s case on appeal, in the cause of Riggs and others against Murray,) he admitted, that in June, 1797, Robert Murray Company had property to a great amount seized and detained by the British government, and that on the 24th of June, 1797, they drew the order in question on Charles Murray, their agent in London, for claiming the property, in favour of the defendant, for 24,000 pounds sterling, or as much as he might receive for their account, by virtue of their claims on the British government, for property taken on board the barque Two Brothers, the snow Harmony, the brig Rachel, the schooner Ariel, and the ship Favourite. He stated further, in that affidavit, that all the debts due to him, and his copartner, (the intestate,) under the firm of Murray &/■ Mumford, were upon engagements and responsibilities entered into for Robert Murray Company, and that it was agreed, that whatever sum the defendant might receive from the said claims on the British government, should be retained and credited, on account of the said debts and responsibilities. He stated, further, in that affidavit, that the British government did pay large sums of money, whereof the 31,099 dollars and 80 cents, mentioned in the master’s re
In his subsequent answers, the defendant seemed inclined to escape from the effect of this admission, for he says, in Iiis second answer, that he cannot say under what instrument the 31,699 dollars and 80 cents were received. He •contends, that the order was given to secure his individual claims, or those belonging to him as one of the house of M. M., and he admits, in another place, that his individual claims at that time were inconsiderable. He says, further, that he, and his co-trustee, under the deed of 1800, gave Mullett Co., of London, authority to receive those funds of Charles Murray. He says, in his third answer, that as there was no particular appropriation of the funds contained in the order, he considered the order was intended for his own benefit, whether individually, or as one of the house of M. M.
These admissions of the defendant ought certainly to ■conclude him, and they are, also, in entire consistency with
It is true, that the intestate always seems to have considered the defendant as responsible to him by virtue of the trust deeds, but that arose from the ignorance in which he was kept by the defendant, of the facts connected with his duty as trustee. The correspondence between the parties, as detailed in the pleadings and proofs, sufficiently excuses the intestate from acting under the want of a precise and accurate knowledge of his rights. There is no surmounting the conclusion that follows from the fact, that the trust deeds did not reach and cover the funds specified in the order. The defendant had no authority to interfere with those funds, but under the order, and it related only to the one fourth of the property captured, as the other three fourths had been acquitted, and passed into the hands of Bird, Savage &f Bird. This one fourth was not touched by the deed of 1798, and that was the only deed that conveyed any property. It assigned the three fourths, but did not assign the one fourth in the possession of the British government. The deed speaks for itself on this point$ and that one fourth was, by the order, assigned for the benefit of Murray fy Mumford; and the defendant, by the
A trustee, who trOt pass^ into the co-trustee, is ra°of loss ™
Nor did Mumford, the intestate, conclude himself, by his being a party to the discharge of the executors of Ciarle, on the 22d of February, 1810, because, that discharge related only to moneys received under the trust deeds, nor was it intended to operate to release the defendant from any of Ms pre-existing responsibilities. Those responsibilities were expressly retained. It was the folly or fault of the defendant to mingle together in his accounts the moneys received by Mullett Co., under the order, and the moneys received under the trust deeds, and to settle with Ciarle as though all .those moneys were received under the trust deeds. Mumford, by a prolonged series of concealments, or studied reserve on the part of the defendant, was kept in profound ignorance of the fact, that the funds were so blended. He knew nothing of the order until the appeal, in 1818. The defendant never produced the order before the master when he accounted, in the suit of Riggs and others v. Murray ; but the accounts were taken generally, under the erroneous assumption produced by the acts and conduct of the defendant himself, that the moneys and ac
3. Another question raised, and discussed at the hearing, related to the charges of the defendant of his expenses in going to Europe, and his charge of commissions.
A partner, who goes abroad on his own personal affairs, is not entitled to charge his expenses to the partnership.
The defendant received a compensation of 5000 dollars, and that threw the expenses upon himself; and, besides, the object of the voyage was personal. It was principally to induce a person, for whom he was bail, to come over to this state and surrender himself. While he was absent in Europe, his partner here was attending to the business of the concern. There is no justice in the charge of his personal expenses abroad, to the house of Murray Mumford. As to commissions on moneys received for,, and on behalf of his partner, they are inadmissible, according to the settled doctrine of the Court, when charged by a trustee.
A trustee is not entitled to commissions ; and if he uses the trust money as his own, he must pay interest.
The defendant is, likewise, to be charged with interest on the moneys, from time to time received; and for this plain reason, that he mingled the moneys belonging to his partner with his own, and used those moneys as his own. It forms, therefore, a very just and clear case for interest.
I shall, accordingly, direct a reference upon the following principles: (1) That the defendant account for the funds, or the proceeds of the property specified in the order of the 24th of June, 1797, and which the defendant has received, or might have received, with reasonable diligence, and that he account for it, as under that order $ inasmuch as the order was delivered, to provide not only for the individual claims of the defendant on
(2) That all claims by the defendant for commissions, on moneys received for, or on account of his own claims, or those of the house of Murray &f Mumford, be disallowed.
(3) That the defendant be charged with interest on all moneys received by him, and for which he is accountable to the complainants.
(4) That an account be also taken and stated, of the moneys and effects received by the defendant under the trust deeds in the pleadings and proofs mentioned, and not duly-applied according to the provisions and directions off the trust deed of 31st of May, 1800; and that such account be taken upon the principles already declared; and with this further direction, that the defendant be charged with the amount paid out of the funds of Murray &/■ Mumford, for his personal expenses in Europe, in the years 1797 and 1798; and that his charge of 5000 dollars, mentioned in the pleadings, and claimed by defendant, as a compensation or salary, and deducted by him out of the funds arising under the trust deeds, he allowed to him j and further,
(5) That the master have the usual power to examine the parties on oath, and to make to them all just allowances not inconsistent with the particular directions in this decree, and to call for books', entries, vouchers, and papers, m the custody or power of the parties, and requisite to a just and full account, and to require the production of them upon oath 3 and to report with all convenient speed,
&C-.
Decree accordingly.