Case ID: nj-eq_5/html/0026-01.html
Source: Caselaw Access Project
Author: {"author": "\n      The Chaxcellob.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HARRISON KIMBALL AND WILLIAM A. DOLE v. PETER MORTON ET AL.
    1. Courts of equity will not, in general, decree performance of contracts for the sale of personal property, but will decree the execution of trusts of personalty.
    2. Stock in a bank had been transferred to the defendant, to be by him transferred in different portions, one portion of which was to be transferred to the complainants. A transfer decreed.
    3. The statute of frauds, requiring declarations of trust to be in writing, does not extend to trusts of personalty.
    The bill states that Charles Collins, being indebted to the complainants, Harrison Kimball and William A. Dole, did, on the thirtieth of September, eighteen hundred and forty-one, by writing under seal, execute to one Chase, agent of the complainants, an assignment of three hundred and eighty-eight shares of the stock of the People’s Bank of Paterson, standing in his name on the books of the bank, as collateral security for the payment of certain notes held by the complainants against him, and in trust, after paying said notes and all expenses, to pay over the surplus to him, Collins, or his assigns, empowering the complainants to ask and receive transfers of the stock to them, and to make transfers thereof, or any part thereof, to themselves or any other persons, and to sell the stock, or any part of it, at not less than seventy-five cents to the dollar, revoking all former powers of attorney given in reference to this stock. That the defendant Peter Morton then held a power of attorney, before then executed by Collins, authorizing him to sell and transfer the stock. That Morton claimed to have received and to hold the power of attorney to him, as security for money alleged to be due him from Collins. That before that time, an attachment had been issued in New Jersey against Collins, at the suit of Perkins, Hopkins, and White, on which the stock was attached, and was then pending undetermined. That, for the purpose of settling the claims and rights of the parties to the stock, and adjusting their respective interests in it, it was agreed, by and between Collins, Morton, Perkins, Hopkins and White, and the complainants’ said agent, that three hundred and seventy-eight shares should be transferred to Morton, and that he should retain to himself, in satisfaction of his demand against Collins, two hundred and fifty shares thereof, and should immediately assign to Perkins, Hopkins and White forty-eight shares thereof, and to the complainants’ said agent the remaining eighty shares thereof. That in pursuance of this agreement, three hundred and seventy-eight shares were, on the second of October, eighteen hundred and forty-one, transferred on the books of the bank to Morton, and that on the ninth of November, eighteen hundred and forty-one, a certificate of such transfer was delivered to Morton, for the purposes before mentioned. That shortly afterwards, Chase requested Morton to assign to him the eighty shares for the benefit of the complainants, in pursuance of the said agreement; but that Morton refused, alleging that there were attachments in New York against Collins, and that he, Morton, might make himself liable.
    The bill charges that no attachment had been issued in New York, except one in which Morton was plaintiff; and submits that such attachment in New York constitutes no lien on the stock, and did not hinder Morton from complying with the said agreement.
    The bill states that the defendant Edward Filly, after the making of the said agreement, and before the term of February, eighteen hundred and forty-two, of the Passaic Circuit Court, caused an attachment to be issued out of said court, in his name, against Collins, by virtue of which three hundred and thirty shares of the said stock, standing on the books of the bank in the name of Morton, were attached as the property of Collins. That these three hundred and thirty shares included the eighty shares so agreed to be transferred by Morton to the complainants’ agent. That in July, eighteen hundred and forty-two, judgment in the last-mentioned attachment was entered in favor of Filly, for thirteen hundred and nine dollars, and that the auditors were ordered to sell the property attached, and did sell to Filly, for fifty dollars, seventy-nine shares of the said stock, the same being intended to be, as the complainants are informed and believe, seventy-nine of the eighty
    
      shares so agreed to be transferred by Morton to the complainants’ agent.
    The bill charges that the last-mentioned attachment was contrived by collusion and fraud between Morton and Filly, for the purpose of defrauding the complainants of the seventy-nine shares; that the note on which the attachment was issued was furnished by Morton to Filly, and was fraudulently put in circulation, nothing being due on it from Collins. That Morton pretends he is required by an order of the Circuit Court of Passaic, to transfer the said eighty shares to Filly, in pursuance of said auditors’ sale, and has fixed on the eighth of- October, eighteen hundred and forty-two, to make such transfer.
    The bill prays that Morton may be enjoined from making the transfer, and that the bank may be restrained from permitting it to be made ; that Morton may be decreed to perform the said agreement, and transfer the said eighty shares to the complainants or their said agent, or that a transfer may be decreed to be made by a master, or by such person as the court shall appoint for that purpose; that the bank may be decreed to permit such transfer to be made on their books; and that Morton may be decreed to pay to the complainants what he has received for dividends on the said eighty shares since the making of the said agreement.
    An injunction was issued, according to the prayer of the bill.
    A decree pro eonfesso was made against Filly and the bank.
    Morton answered the bill. The substance of the answer will sufficiently appear in the opinion of the court. The cause was brought to a hearing on the pleadiags and proofs.
    
      A. Whitehead, for the complainants.
    
      A. S. Pennington, for the defendants.
    Cases cited on the part of the defendants: 15 Wend. 373; Phil. Mid. 439; 1 P. Wms. 570; 2 Ibid. 305; 12 Ves., Jr., 321; Story’s Eq. Jur., § 29; Bunb. Rep. 135; 10 Ves., Jr., 159; 13 Ibid. 37; 3 Atk. 383; 5 Vin. Ab. 450.
   The Chaxcellob.

One objection made on the argument to the granting the relief sought by this bill was, that it is a bill for the specific performance of an agreement in relation to personalty. From the view I have taken of the case, it is not necessary to go at large into the learning on this subject; though much was said at the hearing, on both sides, in reference to the doctrine of equity as to the specific performance of such agreements. Courts of equity, will not, in general, decree performance of a contract for the sale of stock or goods, inasmuch as with the same money, either not paid, as in agreements to deliver goods on receiving the price agreed on, where the party agreeing to deliver fails to do so on tender of the money, or recovered in damages where the money has been paid, the same quantity of the stock or goods may ordinarily be purchased. But there are exceptions to the rule, and the Supreme Court of the United States seem inclined to give relief in equity by specific performance on contracts respecting personalty, to a greater extent than that to which the Court of Chancery in England has yet gone. 5 Wheat. 151; 1 Peter’s Rep. 305. And in 10 Connecticut Rep. 121, specific performance by transfer of stock was decreed.

But the case made by this bill, if established, is a case of trust.

It appears by the proofs that the three hundred and seventy-eight shares were transferred to Morton in pursuance of a written agreement, made and entered into by and between Collins, Morton, Perkins and Company, and the People’s Bank at Paterson, under their seals, dated October 21st, 1841. This agreement recites that the parties are variously interested in and have claims upon certain three hundred and eighty-eight shares of the stock of the said bank, standing in the name of Collins; that Perkins and Company had attached the interest of Collins; that Bigelow, Canfield and Company had also attached the same, and had afterwards assigned their interest to Morton; (these attachments were in this state;) that a mutual agreement had been made between all the parties, tor the final settlement of the whole matter; that the bank, with the assent of Collins, should hold the stock until after the settlement of a suit in New York between this bank and a certain bank in New York. It is then, by the said written agreement, consented and agreed that a provisional transfer of three hundred and seventy shares of the stock be made to Morton; chat the certificate for the said stock remain in escrow in the hands of L. B. Woodruff, esquire; that so soon as the settlement with the New York bank is carried out, the transfer to Morton shall take effect and the certificate be delivered to him ; that thereupon all dividends in arrear on the stock should be paid to Morton; the residue of the three hundred and eighty-eight shares, being ten shares, to be transferred to the said People’s Bank, and that on the execution of the said agreement, the rights, interest and claims of the parties thereto to the stock, should be deemed definitively' agreed and settled, and that all claims and demands on each other in relation to the said stock, except such as are created by or arise under the said agreement, should cease.

Under this agreement, the three hundred and seventy-eight shares were, on the day of the date of the agreement, transferred on the books of the bank to Morton, and the certificate therefor was delivered to Woodruff, to hold and deliver pursuant to the terms of the contract.

On the 9th of November, 1841, Woodruff delivered the certificate to Morton, and took his receipt for it at the foot of the agreement or a copy of it.

There is nothing in this agreement binding Morton, after the transfer should be made to him, to transfer any of these shares to any person whatever. The agreement provides only for the transfer, to him. It is not, therefore, by force of anything in the agreement that the complainants can succeed. They claim that notwithstanding the written agreement is silent as to any transfer by Morton of any portion of the stock, after he should receive the certificate for it, yet that it was agreed between the parties and by Morton, that when Morton should receive the certificate, he should transfer forty-eight of the shares to Perkins and Company, and eighty of them to the complainants, and retain the remaining two hundred and fifty shares for himself.

Is this part of the complainants’ ease established? I think it is. In the first place, the terms of the written agreement are opposed to the idea that the whole three hundred and seventy-eight shares were to be transferred to Morton for his own benefit, It recites that the parties thereto are variously interested in and have claims on the stock, and states that it is consented and agreed that a provisional transfer be made to Morton. Again, Morton, in his answer, docs not claim the benefit of the written agreement according to the'terms of if, but admits that he did agree to receive two hundred and fifty-three shares of the stock, (I am satisfied that he adds the three shares because the complainants in their bill had fallen into a mistake in putting the numbei Morton was to have, at two hundred and fifty-three, instead of two hundred and fifty,) for the indebtedness of Collins to him, and to transfer ten shares to the bank, and forty-eight shares to Perkins and Company, and admits that it was agreed between all the parties, that when Collins should pay the costs of the attachment in New York at the suit of him and his partner Eilly, and should satisfy the creditors who had come in under that attachment, and repay him one hundred and fifty dollars he had advanced to Collins to pay costs, he should transfer to Collins, or whoever was entitled to them under Collins, the remaining shares; (he calls them seventy-seven, deducting the three which he added, as before stated, to the two hundred and fifty ;) and he admits that the agent of the complainants was present when the agreement was made, and showed him the assignment stated in the bill, to the said agent of the complainant.

I think that this answer, as it is drawn, and in view of the nature of the transaction and the circumstances attending it, should be considered a sufficient admission of the trust. If the answer could be considered as making a distinct allegation that such conditions were agreed upon as to the eighty shares, still it admits a trust as to these shares; and I think parol evidence is admissible to show the terms of the trust, and to contradict his allegations as to conditions.

It was objected that the statute of frauds requires all declarations or creations of trust to be in writing.

The statute does not extend to trusts of personalty. 2 Story, § 972. Three witnesses, on the part of the complainants, testify that the agreement of Morton to transfer the eighty shares to Collins or his assignees, was without any condition whatever.

The attachment at the suit of Filly was not till after the assignment by Collins to Morton for the purposes of the agreement.

I am of opinion that the complainants are entitled to relief. A transfer of the eighty shares will be decreed.

Decree accordingly.

Cited in Hooper v. Holmes, 3 Stock. 124.