25 Ala. 363 | Ala. | 1854
The first question presented by the assignment of errors is, as to the allowance of interest made by the master upon the available debts specified in the
The assignment requires the trustees to apply the proceeds of the claims, &c., assigned, to the payment of the debts of Royall, in equal proportions ; but 'the record shows, that every creditor of Royall, whose debts, so far as wo can learn, were a charge upon the trust fund, accepted the provisions of the assignment shortly after its execution; so that there was no necessity for McKenzie to retain the moneys in his hands, in order to ascertain these debts, after the expiration of the year. These debts were bearing interest; and it was not only the duty of the trustee, to proceed to collect, with all convenient diligence, the claims assigned, but to apply the funds collected to the payment of the creditors, in order to stop interest. There can be no definite rule to govern courts as to the charge of interest against trustees, but we think under all the circumstances of this case, equity requires that interest should be charged on the available assets from
We think, also, the account should have been made up to the 30th of July, 1844, the balance then struck, and that'the complainant would be entitled to interest on such balance, if any was found in his favor. It was, as we have seen, the duty of the trustees, to have collected and applied the available assets to the payment of the trust debts within a reasonable time, and after the discharge of these debts, to have paid the surplus, if any, to Royall. This, however, was not done. More than twelve years had elapsed since the defendants had taken upon themselves the execution of the trust; and on the application of the cestui que trust, so far as the surplus was concerned, in July, 1844, an account was taken. It is true that Royall agreed, on McKenzie’s confessing judgment in favor of certain of the creditors, that the balance should stand over for future adjustment; but this agreement .does not affect the principle upon which the cesiuis que trust were entitled to interest. The time which had elapsed was sufficient, and more than sufficient, to have closed the assignment so far as the creditors were concerned ; and after satisfying their demands, and allowing a reasonable time to ascertain the state of accounts, the party entitled to the surplus, upon making application, was entitled to interest from the time of taking that account.
As to the Price debt: There is a good deal of conflict in the testimony as to the solvency of the debtor; but we think the evidence establishes the fact, that he had, at the time of the acceptance of the trust by McKenzie, property fully sufficient to pay the debt. It is clearly proved, that this property was transferred to his father, Josiah Price ; and one witness, the brother of the debtor, swears that the father was
We do not think, however, that McKenzie should be charged with more than the amount of this debt, as it was proved by Isaac D. Price, at the time of its settlement, §1,239 15, and interest upon the same from a year after the acceptance of the trust. We do not understand the answer of McKenzie to admit the amount of the debts assigned as specified in the deed of trust, so as 1o estop him from showing the real amount of the debt, which was all that in equity he could be required to collect or account for.
As to the claim on Hugh Montgomery for one hundred and ninety-eight dollars : We think that McKenzie should be charged with the whole amount of this debt, with interest from the same period as the other debts, except the notes of McKenzie. The evidence of the witness Chilton is conclusive to show that this debt was collected ; the deed confers no authority upon the trustees to compromise the debts specified in the assignment; and having done so without the consent of the cestuis que trust, the trustees must be charged with it. The evidence shows, that three hundred dollars on this claim was collected ; but it is not very clear as to the time when the collection was made. There is no evidence that McKenzie acted otherwise than in good faith ; and as the - debtor had left the State in which the debt was contracted, .we do not think he should be charged'with more than the amount of the debt, and interest from the time we have stated; and he would be entitled to a credit of five per cent, commissions on the amount, which it would have cost him to make the collection.
As to the Billings debt: The evidence shows that he was a good blacksmith, and although several witnesses swear as to his solvency, a greater number depose as to his insolvency. His own testimony has been taken, which is entitled to full credit, as the defendant’s witnesses speak of him as an honest man ; and he proves that he was in the employment of McKenzie, the year that the latter left South Carolina, — 'that
So, also, in relation to the claim on Wilkes Oaxtou for the lease of the plantation. We understand the answer of McKenzie to admit the lease; but he insists that the amount of the same was not realized by him, for the reason that the lands belonged to the wife of Royall; that she was dead when the lease was made ; that her children by a former marriage were the owners on her death ; that they took possession of the land, and the lessee, (Jaxton, refused to pay the rent. The allegations of the answer are not very precise as to the tenancy of the wife, but we can give them no other construction, than that the wife was the absolute owner, or tenant in fee ; and as the witness Crockett proves that Roy-all had issue by this wife, that would make him tenant by courtesy, and give him a life estate. But independently of this view, the facts set up by McKenzie could not avail him, if they would have amounted in law to a full defence against the payment of the rent by the lessee, for the reason that the solvency of Caxton is fully proved, and the lease being admitted, the other facts to which wo have referred are new matters, and it devolves upon the defendant to' prove them by other testimony than the answer. The chancellor erred, therefore, in sustaining the exception to this claim.
As to the gin : The answer of McKenzie denies that he ever received it; hut the schedule attached to his answer shows that it was among the articles assigned, and it is evident that McKenzie knew where it was, áS we find him sub*
The claim of Shelton wo regard as a proper charge on the trust fund. This debt was included as one to be paid out of the proceeds of the assignment; and the slight discrepancy in the amount of the debt as furnished by Royall, and as stated by the creditor, makes no difference. The only question is, whether this was a trust debt, and upon that we can have no doubt. The debt is due by McKenzie, and he is responsible for it to the creditor.
In sustaining the 8th exception of the defendants to the report of the master, we think the chancellor erred. The order of reference directed an account to be taken of the expenses of executing the trust, and also that the master should ascertain what would be a reasonable compensation to the trustees, 'should the chancellor deem compensation proper.— The report is, that five .per cent, upon the amount reported by the master as available from the assets, except the notes on McKenzie, would be a fair compensation ; and this portion of the report is excepted to, on the ground that it was not authorized by the decree of reference. We are unable to perceive any force in this objection. The available assets were ascertained, and the compensation reported was a certain commission upon the amount of a specific portion of these assets. We see nothing to have authorized the allowance of the exception.
The only remaining question arising out of the assignment of errors on the part of the complainant, is as to the action of the chancellor in overruling the exceptions taken to the testimony of the witness Howard. The rule is, that a defendant trustee may be a witness for his co-trustee, unless he has some personal interest in the event of the suit: but
As to the cross errors assigned by McKenzie: The exception to the answer of McKenzie to the bill filed in Talladega, was properly overruled, as his admissions contained therein, in relation to any items or portions of the assignment which is the foundation of the present suit, were evidence against him. It makes no difference whether the parties are the same or not: it is received as a confession. — 3 C. & H. notes to Phil. Ev. 926, and cases there cited.
The exception taken to the evidence of the witness Humphreys was not sustainable. This witness, it is true, states that “ he regards certain debtors,” named in the assignment, “as insolvent”; but it is evident, from the other portions of his testimony, that his conclusion is based upon his knowledge of their circumstances. Not so, however, in relation to the Witness Buskins, to whose evidence the same objection was made. His testimony, in relation to this fact, is mere opinion, and the exception taken to his evidence should have been sustained.
The second exception taken by the defendants to the report of the master, was also properly overruled, by reason of its generality. That portion of the report of the master to which this exception was directed, involved an examination into the availability of upward? of a hundred and sixty different and specific claims, and the examination of a most vo
The only remaining question, i& the one presented by the cross assignment of errors involving the correctness of that portion of the report of the master which was in relation to the notes due Weed & Benedict, and E. C. Robbins, which were to be paid out of the proceeds of the assignment. The trust deed was made in the fall of 1832 ; and in December, 1835, more than three years afterwards, and when McKenzie must be presumed to know the amount that would be realized, he buys these notes at about fifty cents on the dollar, and in payment gives his own individual note, due one year after date, for the amount he agreed to pay them ; and it is under these circumstances that he claims a credit for the whole amount of the debts he thus purchased. Equity scrutinizes with a jealous eye every species of dealing by a trustee made in his individual character, having any connection with the trusts which he has undertaken to execute, and it does not allow him to deal with them for his own personal profit.— This is a most salutary rule, and the slightest relaxation of it would tend to bring the strongest passion of our nature— self-interest — in conflict with the faithful discharge of confidential duties. The report of the master, crediting the trustee with only the actual amount he had paid, was correct. In re Oakley, 2 Eden, 478.
The decree of the chancellor must be reversed, and the