Case ID: ga_41/html/0323-01.html
Source: Caselaw Access Project
Author: {"author": "McCAY, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MARY E. HOWES, executrix, plaintiff in error, v. B. A. WHIPPLE, administrator, et al., defendants.
    (Atlanta,
    June Term, 1870.)
    DISTRIBUTION OE ESTATES—EQUITABLE LIEN—PRIORITY OlVER DEBT AS TRUSTEE—Where A approached B to purchase a lot of mules upon credit, and B refused so to sell, and thereupon A proposed to trade to B certain bags of cotton then on A’s plantation, which B declined, as he knew nothing of the cotton trade, but offered to let A have the mules if he would deliver the cotton at the warehouse of C, at Macon, to be sold for B’s benefit, in payment for the mules, and both the parties went to the warehouseman and stated the contract, and he undertook to be the agent of both parties, to receive and sell the cotton, and pay to B the price agreed on for the mules, out of the proceeds, and the mules were consequently delivered, and A, going home, commenced hauling the cotton to the depot, instructing the agent to send it to C, under the .contract, and after the cotton was delivered, but before it was shipped, A suddenly died:
    
      Held, That, under the facts, B had acquired such an interest in the cotton, that to the extent of the price of the mules, it was not assets of A’s estate for distribution, and a Court of Equity, in a bill filed for direction, will direct so much of the proceeds of the cotton as equals the price of the mules to be paid to B, and this even as against persons who claim that A is indebted to them, as a trustee, and, consequently, upon a debt of the highest dignity under the statute of distributions.
    Equitable Lien. Distribution of Estates. Practice Supreme Court. Before Judge Robenson. Wilkinson Superior Court. April Term, 1870.
    The administrator of A. C. Brown, deceased, filed a bill to marshal his assets, etc. 'All the questions of priority, etc., were settled by decree, except one made by Plowesi He had filed a bill against the administrator, in which he made this case: *On the 15th of February, 1867, he was in Macon selling mules. Brown desired to buy from him on credit ten mules, but Howes would not give credit. Thereupon Brown offered to ship to Howes twenty-eight bales of cotton, which he said he then had on his plantation in Wilkinson county, and Howes told him if he would ship the cotton to Hardeman & Sparks, warehousemen, of Macon, as their common agent, he would deliver him the mules at $2,100 00; Brown agreed to that and that the cotton should be sold in thirty days thereafter, and that Plowes should have $2,100 00 out of the proceeds; Brown took the mules, and his administrator still has them. Soon after making said agreement, Brown was preparing to ship said cotton, had removed it from his plan<ation to the railroad, intending to perform said agreement, when he was suddenly killed. Whipple, Brown’s administrator, refuses to pay the $2,100 00, deliver the cotton or give up the mules. Brown’s estate is insolvent. He prayed injunction against disposing of said cotton or its proceeds, or if it was sold and its proceeds gone, against disposing of the mules, and for relief generally. Howes died and his executrix was made complainant. When the cause came on for trial, it was admitted that an absent witness would swear to the trade as stated by Brown, in his bill.
    Sparks testified that Howes and Brown came to the warehouse of Hardeman & Sparks, Brown said he had bought some mules from H0wes,< had at home twenty-seven bales of cotton which he would ship to Hardeman & Sparks immediately, out of the proceeds of which they should pay Howes for the mules $2,100 00, and hold the balance, if any, for .Brown. He said he was Brown’s agent to sell and Howes’ to pay for the mules.
    The railroad agent testified that Brown, en route from Macon home, told him he had bought some mules at Macon and would have some cotton at the depot in a few days to ship to Hardeman & Sparks to pay for the mules. Early next week he began sending the cotton to the depot, and about eight days after he had been in Macon he was killed, never having countermanded said instructions. Twenty-eight bales *were sent to the depot, the last arriving on the day of Brown’s death. Brown had told the agent to get the tagman to tag the cotton as soon as possible, and to ship them at once to Hardeman & Sparks. The first were marked A. C. B. They were not tagged till a few days after Brown’s death. Whipple, as Brown’s administrator, directed the cotton sent to another warehouse. Here Howes’ case was rested.
    The administrator showed that by the said decree he was ordered to hold funds sufficient to meet Howes’ demand should he recover. He admitted that he received nine of said mules as Brown’s administrator, one of which had died, that he sold the others for $1,190 00, and sold the cotton for $3,306 41,. and so charged himself in.his returns. Manson and wife et al., introduced evidence to show that they had a demand against Brown in a fiduciary capacity, and that it was of higher dignity than said claim of Howes’. Howes’ counsel admitted that Manson and wife et al, were entitled to priority over any simple creditor of Brown’s estate, but contended that Howes had such an interest in said cotton or its proceeds as that so much of it as would pay for the mules was not assets in Whipple’s hands.
    The Court explained to the jury the law as to. the dignity of fiduciary debts in the distribution of the assets of an estate and said that the issue was whether H'owes’ claim was of equal dignity with the claims of Manson and wife et al. And he charged them that if it was part of the mule trade that Brown dedicated certain cotton to pay for the mules before Howes would deliver them, that he was to go home and ship the cotton to Hardeman & Sparks, as agents for both parties, and that said cotton was to be sold and the mule debt first paid out of the proceeds, then Brown was Howes’ trustee as to $2,100 00 worth of the cotton, and at Brown’s death the cotton was not assets in Whipple’s hands until the trust was discharged. If the contract was as stated in the charge, and Brown went home and sent the cotton to the depot, had it marked A. C. B. and gave instructions to have the cotton sent to Hardeman & Sparks, and died without revoking said directions, and if Whipple sold the cotton *for over $2,100 00, and received the proceeds and thus charged himself, they should find for complainant, with interest from the sale.
    The jury found in favor of Manson and wife et al. Complainant moved for a new trial, upon the grounds that the verdict was contrary to law, equity and the weight of the evidence, and because the Court erred in saying to the jury that the issue was whether Howes’ claim was of a fiduciary character. Another ground was the dispersion of the jury under circumstances stated, but they are not material here. The new trial was refused, and that is assigned as error on each of the grounds stated.
    (In this case counsel had waived the sending up of the record. When the papers got here there was no certificate on them that the bill of exceptions came from his office or had ever been filed. Before the case was called counsel for plaintiff in error moved to supply the certificate. This was resisted. The Court would not allow anything added to the paper here, but allowed counsel to take them from this office and get the certificate, before the case was called for a hearing. This was done.)
    John Rutherford. Nisbet & Jackson, for plaintiff in error.
    J. G. Ockington, E. Cumming, by the Reporter, for defendants.
   McCAY, J.

There cannot be a particle of doubt, but that in the sale of these mules it was the intent of both parties to go further than make an ordinary sale and purchase upon credit. The vendor of the mules distinctly refused to sell on credit; he was evidently unwilling to part with the possession of his property until he had in hand the price. What was finally done? They both went to the warehouseman who became their mutual agent to receive and sell the cotton, and pay the money. By this agreement the vendor of the mules acquired *an interest in the cotton. It is not necessary to define accurately what was the nature of that interest, as to say, for instance, at whose risk the cotton was. No question of risk or loss arises. The simple question is, does, this cotton go over to the administrator as assets? It does not do' this if the seller of the mules has any interest in it. It may be an undivided interest. It may be only an equitable interest. If it is any interest at all in the thing, then, so far as that interest extends, it is not assets.

Can any one question that a Court of Equity would have restrained Mr. Brown from disposing of this cotton otherwise than as he had agreed? Had he attempted to divert it from Hardeman & Sparks, would not equity have compelled him to send it to them, as he had contracted to do ?

It does not at all follow that because a sale is not complete, so as to change the possession or give a clear title, the purchaser has no interest in the thing. In the case of real estate a Court of Equity will compel a specific performance to prevent fraud. In cases of personal property, the remedy by suit for damages stands in lieu of this, but the principle is the same, and if it would be a fraud upon the purchaser, and he have no other remedy, the mere fact that the property is personal property, does not defeat the party of his remedy. Equity will decree the specific performance of contracts for leases, or the good will of a-trade, and generally, if there be no adequate remedy at law, equity will grant relief to prevent fraud and injustice: Story’s Eq._, 2 vol.,- sec. 716, 720; 1 Sim & Stuart, 610, 590. See especially the case of Adderly v. Dixon, 1 Sim & Stuart, 610.

Here was a contract between these parties by which "one agreed to deliver to the warehouseman to be sold for the others’ benefit, certain bales of cotton. The consideration was fully paid, and the warehouseman was declared the mutual agent to receive, sell and pay the proceeds. It would be the grossest fraud to permit the administrator to treat this cotton as assets. He has got the mules. If he takes also the cotton, the vendor of the mules is remediless. The estate is insolvent, claims of the highest dignity absorb it.

*It seems to us that this is just such a case as equity takes hold of. Here is an interest in the cotton acquired; ordinarily the law should furnish a remedy in damages. The insolvency of the estate makes that no remedy. We think equity will interfere and declare the cotton or its proceeds not assets until the mules are paid for. The case at bar is, however, stronger for the plaintiff in error than the principal we have discussed demands. The evidence shows that Mr. Brown had spoken to the depot agent, had told of the arrangement he had made, had informed him he would, in a day or two, deliver the cotton at the depot, had actually done this, hauled the cotton to the depot, ordered it sent as he had agreed, marked to the warehouseman, the mutual agent.

We think the case on this ground conclusive. Hardeman & Sparks had at the death of Brown, a special property in this cotton. They could have sued the Railroad Company for neglect or malfeasance. They were the consignees, and- their right over it was a right as the agent of both these parties. Under all the circumstances we think the Court below erred. This cotton does not become assets until the mules are paid for. It was devoted by the deceased to that purpose, for a valuable consideration, and it would be a fraud on the seller of the mules to permit it to be diverted from the purpose Mr. Brown intended. Judgment reversed.