Case ID: va_35/html/1013-01.html
Source: Caselaw Access Project
Author: {"author": "TUCKER, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Poage v. Bell.
    July, 1837,
    Lewisburg.
    Trust Deeds— Conversion of Trust Property— Who May Maintain Action for.- -Where a debtor conveys personal property to a trustee to secure to a creditor the payment of bis debt, and a person obtaining-possession of the property, sells it, and applies the proceeds to his own use, the cestui que trust can maintain no action at law, in his own name, against the party converting the property. The action will only lie at the suit of the trustee.
    After the decision by the court of appeals, in December 1825, of the case of Poage v. Bell and others, reported in 3 Rand. 586, Samuel Clarke, acting under the deed of trust made on the 7th of January 1817, bj' Frederick Imboden and wife to the said Clarke and Dabney Shelton, for the benefit of William Poage, proceeded on the 23d of September 1826, after advertising according to the provisions of the deed, to sell the 20 acres of land therein described, and all the personal property embraced therein that he could find. The proceeds of this sale, amounting to 500 dollars, were applied as a credit against the debt due from Imboden *to Poage; but there was a balance, it seemed, exceeding 3000 dollars, which still remained unsatisfied. Thereupon, on the 20th of April 1827, Poage brought an action of as-sumpsit against James Bell, to recover the proceeds of a wagon and team of five horses, which he insisted were embraced in the deed from Imboden to Clarke and Shelton for his benefit, and which he alleged had been sold by Bell with a full knowledge of the claim thereto under that deed. Issues were joined on the pleas of non as-sumpsit and no’n assumpsit within five years. At the trial, the plaintiff introduced a witness who proved that in the year 1819 he drove for Imboden a team with five horses, loaded with whiskey, from Waynes-borough in the county of Augusta, to the city of Richmond; that Imboden directed him to dispose of the whiskey and also of the wagon and team, and pay over the proceeds to the defendant James Belt, who was bound for him in some suretyship; that the witness reminded Imboden that the wagon and team were covered by Poage’s deed of trust, to which Imboden replied that he knew such to be the fact, but he would supply another team for Poage before he executed his trust; and that Imboden further instructed the witness, in the event of his failing to make a sale of the said property on his way to Richmond, to surrender up the wagon and team to Bell in Richmond to be sold, and pay to him the proceeds of the whiskey. The witness stated that he did not dispose pf the wagon and team and whiskey on his way to Richmond, and upon his arrival there, the defendant Bell, who was in Richmond, applied to him for the proceeds of the whiskey, which he paid to him, and also applied for the wagon and team. The witness stated that when this application was made, he asked Bell whether he was not apprized that the wagon and team were covered by Poage’s deed of trust, upon which Bell replied that he was apprized of the fact, but that the money for which he was bound as surety for *Imboden must be immediately satisfied, and that either he or Imboden would supply another wagon and team for Poage’s deed to operate upon, by the time it was required. Thereupon the witness delivered the wagon and team to Bell, who sold the same, and applied to his own use the proceeds thereof, amounting to 675 dollars.
    The counsel for the defendant read to the jury his answer in the former case, to prove that at the date of that answer, he set up an adversary claim to the wagon arid team, or its proceeds.
    Upon this state of facts, the plaintiff contended that after the trustee Clarke had executed the deed of trust as far as he could, and after the defendant Bell had converted the wagon and team by a sale thereof, the right to the proceeds of the said wagon and team resulted to the plaintiff, precisely in the same way that it would have resulted in case the trustee Clarke had made sale and received the proceeds, and failed to x)ay to the plaintiff the balance due him. The defendant, on the other hand, contended that the action could not be maintained by the plaintiff, he being a mere cestui que trust. And so the circuit court of Augusta held, being of opinion that in a court of law the action was only maintainable by the plaintiff’s trustee. To this opinion, and also to an opinion given by the circuit court as to the effect of the statute of limitations, the plaintiff filed a bill of exceptions.
    The jury having found a verdict for the defendant in conformity with the court’s opinion,, judgment was rendered thereupon, and Poage obtained a supersedeas.
    Peyton, for plaintiff in error.
    Johnson and Baldwin, for defendant in error.
    
      
      The principal cane was citerl with approval in Hollingsworth v. Sherman. 81 Va. 672; Clay v. St. Albans, 43 W. Va. 543, 87 S. E. Rep. 369.
    
   TUCKER, P.

In this case we are of opinion that there was no error in the opinion of the court instructing the jury that the action was not maintainable by the '’‘■pL'-imtí.fE upon the case made by him, he being only a cestui que trust, but was only maintainable in a court of law by the plaintiff’s trustee. Though an action has in many cases been entertained at law by a cestui que trust against his trustee, where the trust is no longer continuing, b,ut is functus officio,. and a balance is in the tru,stee’s hands, yet we know no case in which an action has been maintained by a cestui que trust against a third person, who has either wrongfully converted the property of the trust to his own use, or has received the trust funds without paying them over. Apart from the technical objection that he only can maintain an action at law, who has the legal title, there is the vital objection that the trustee is bound to execute the trust in all regards, and in doing so the rights of other cestuis que trust may be involved, who are not and cannot be made parties to the suit. Thus in the case before us, an essential point in the plaintiff’s case is the indebtedness of Im-boden to him. But how is this matter to be tried, when Imboden is no party? This shows the propriety of confining the cestui que trust to a court of equity, (when that jurisdiction is proper for him) where all persons interested may be made parties, and of requiring the action to be brought by the trustee, when the remedy is only at law.

The cases of Garlands v. Jacobs &c., 2 Leigh 651; Tolson v. Elwes, 1 Leigh 436, and Burnett et al. v. Harwell et al., 3 Leigh 89, apply strongly to this case.

Waiving a consideration of the instructions respecting the statute .of limitations, we are of opinion to affirm the judgment on the other point, which goes to the foundation of the action.

Judgment affirmed.