Case ID: sc-eq_26/html/0270-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

W. Simons and Wife et al. vs. The South Western Rail Road Bank and Edward R. Laurens.
    
    Wlioro a Master in Equity borrowed money, and, to secure tbe payment, hypothecated certain certificates of stock which he held as Master, and in trust — the official character in which he held the stock, and the trust, appearing upon the face of the certificates — the lender was decreed to deliver up the certificates to the parties entitled, and account for all dividends he may have received.
    
      Before Dargan, Ch. at Charleston, June, 1852.
    Dargan, Oh. In the case of Jonathan Lucas and others, against William Hume and others, by a decretal order of the Court, (March, 1840,) Catharine Simons, then Catharine Hume, as one of the heirs at law of Mrs. Lydia Lucas, was declared to be entitled to a portion of the proceeds of the sale of a plantation called Middleburgh : which place was then ordered to be sold by the Master, on certain terms therein prescribed. The same decree directed a distribution of the proceeds of the sale into thirteen parts, corresponding with the number of the heirs at law who were to receive the same; and also directed their shares to be paid to them respectively. In regard to the share of Catharine Hume, (who was then an infant,) as well as the shares of the other infant parties, the same decree ordered them to be paid to the guardians of the said infant parties, “ if they have such guardians, and if not, to be invested by the Master for their benefit respectively, until demanded by the. proper authority.”
    In pursuance of this decree, Middleburgh, on the 6th April, 1840, was sold by Edward R. Laurens, then one, of the Masters in Equity, to Jonathan Lucas, for $29,600. The sale was duly reported and confirmed. -The share of Catharine Hume in the cash proceeds of the sale was $794 10, which, by the directions of the decree, was inyested by the said Master in 5 per cent, stock of the City of Charleston. The certificate was No. 124, and was in the name of “ Edward R. Laurens, Master in Equity, in trust for Catharine Hume, a minor child of Catharine Hume, formerly Lucas, deceased, or his assigns, for $794 10 of the issue of 1835.”
    The share of Catharine Hume in the credit portion of the sales, afterwards received by the said Edward R. Laurens, was $4,837 06. This was invested by him in a certificate of State 3 per cent, stock, for $7,441 53, bearing date the 16th July, 1847, in the name of “ Edward R. Laurens, Master in Equity, in trust for Lucas and Hume, or his assigns.”
    
    On the 28th Oct., 1850, Edward R. Laurens, being pressed for money, negotiated a loan from the South Western Rail Road Bank for $5,000, which he secured by his individual note, and a hypothecation of the two certificates above described, and another certificate of State three per cents., which stood in his name as trustee for Susan Randall.
    The said certificates were deposited with the Bank, and endorsed in blank by the said Edward R. Laurens. The note of Edward R. Laurens to the Bank was renewed several times, and the last renewal remains unpaid, in possession of the Bank. On the 19th April, 1851, the Bank, wishing to sell the stock, filled up the blank assignments (endorsed upon the certificates) in favor of the said Bank; and, to be better able to make a sale thereof, offered the certificates at the State and City Treasury, to be transferred in the name of the South Western Rail Road Bank. Before the transfers were made, the State Treasurer and City Treasurer received notice from the complainants, and from the sureties of Edward R. Laurens’ official bond: in consequence of which the transfers have not been made.
    Catharine Hume has intermarried with William Simons, and C. G. Memminger and Keating L. Simons are the trustees of their marriage settlement, b.y which the fund in question has been assigned to the said trustees, in trust for the uses of the marriage settlement. And the said Bank having refused to deliver up the said certificates of stock, the said Simons and wife, and the said trustees, have filed this bill for an account against the said Bank, and against the said Edward R. Lau-rens, and that they may be decreed to deliver up the said certificates, &c. Catharine Simons has died since the filing of the bill; but both the legal and equitable interest in this fund remain in parties before the Court.
    Every principle of equity applicable to the subject demands that the South Western Rail Road Bank should be decreed to make restitution.' One who purchases from a trustee, with notice of the trust, becomes himself chargeable with the equities of the trust, to the extent of his dealing, if the trustee’s act is a violation, or an abuse of the trust. In this case, the Bank had notice, for the trust was unmistakably stamped upon the face of the certificates ; and if they had followed up the indications thereby afforded, it would have led to the most complete information on the subject, and shown them the utter incapacity of Laurens to sell, much less to hypothecate for his own use the certificates of stock, which stood in his name for the benefit of the wards of the Court. The morality óf the transaction, on the part of the Bank, I do not impugn; but certainly there was great blindness. They were deceived, but they must take the consequences. If Laurens were to be considered a mere trustee, I should consider the plaintiffs entitled to relief.
    But it is a mistake to suppose that a Master in Equity is a trustee in the technical sense, in regard to the assets in his hands. He is a mere depositary. He has no right or authority to make investments, or to call in, or change those that have been made, without the special order of the Court. Without such authority, he has no right to negotiate, or transfer any of the securities that are in his possession or under his control. Where bonds or other securities are payable to him, he may receive the money when due ; and, as money is not easily identified, his misappropriation of it might be without remedy as to the money itself. Yet even as to the cash funds in his hands, if misappropriated, they would be followed in the hands of one, who, in taking them, was aware of the abuse of the official trust.
    It would be a great perversion of every principle of equity, if the plaintiffs’ claims were not sustained.
    It is ordered and decreed, that the defendant, Edward R. Laurens, do account for and pay over to the plaintiffs, who are the trustees of the marriage settlement of William Simons and Catharine his wife, all the moneys which have come into his hands, as late Master in Equity, which may be due to the said Catharine Simons, from the estate of Lydia Lucas, and that Master Tupper state the accounts.
    It is further ordered and decreed, that the South Western Rail Road Bank do deliver up to the said trustees, the said certificate of City 5 per cent, stock, and the said certificate of State 3 per cent, stock, mentioned and described in the plaintiffs’ bill; and that they account for the dividends they may have received thereon, (if they have received any;) and that all transfers and assignments of the said certificates be set aside and cancelled.
    It is further ordered and decreed, that the defendants pay the costs.
    The South Western Rail Road Bank appealed, and- insisted, that these defendants took the securities mentioned in the pleadings in the course of business, as security for a loan. That being purchasers for a valuable consideration, no decree ought to have been made against them.
    That the defendants are entitled to the assistance of this Court, to recover from the sureties of Edward R. Laurens the amount advanced by them on the said securities, if the securities themselves are adjudged to the complainants.
    
      Hanckel, Petigru, for appellants.
    Memminger, contra.
   Per Curiam.

We concur in the decree of the Chancellor: and it is ordered that the same be affirmed, and the appeal dismissed.

Johnston, Dunkin, Dargan and Wardlaw, CC., concur ring.

Appeal dismissed.