Case Name: Gray against Thompson
Court: New York Court of Chancery
Jurisdiction: New York
Decision Date: 1814-06-02
Citations: 1 Johns. Ch. 82
Docket Number: 
Parties: Gray against Thompson.
Judges: 
Reporter: Johnson's Chancery Reports
Volume: 1
Pages: 82–85

Head Matter:
Gray against Thompson.
June 2d.
Where an assignee of property, in trust, for the benefit of the creditors of the assignor, having received the proceeds of the property in 1801, neglected, for many years, to distribute the fund amoqg.the creditors, pursuant to his trust, he was decreed to pay the amount, with interest, fiom the time he received the money, and all the costs of the suit brought by the creditors.
THE bill, in this cause, which was filed in 1303, stated, that Edward Creighton and James Plains, partners in trade, were indebted, in 1798, and afterwards, to the plaintiff, in the sum of 213 dollars. Plaint died in 1798, and Creighton, the surviving partner, being desirous to pay the debt due to the plaintiff, and other debts, put into the hands of the defendant a bill of exchange, and goods, wares, and merchandises, to pay certain creditors of Creighton and Plaine, and among them the plaintiff. Creighton, afterwards, went to New-Orleans, where he died. The bill charged, that the defendant had received the money on the bill of exchange, and the proceeds of the goods so placed in his hands, but refused to account for the same. The plaintiff prayed a discovery of the amount in the hands of the defendant, and that he should account therefor, or for so much as was sufficient to pay the principal and interest due to the plaintiff.
The bill was filed, as well in behalf of the plaintiff, as such other of the creditors of Creighton and Plaine as should come in and contribute to the expense of the suit. Thompson, in his answer, admitted, that he received of Creighton an assignment of the proceeds of certain goods, shipped by Creighton and Plaine to Savannah ; and that, after much difficulty, he received the proceeds, and also a bill for 100 pounds sterling; that, at the time he received the assignment, he gave a receipt to Creighton, promising to distribute the fund between the other creditors of Creighton and Plaine, named in the receipt, and himself, but that he had no recollection or knowledge of the names of the said creditors, nor of the amount of their several debts, not having retained a copy of the receipt, nor supposing that Creighton was about to leave the city of New-York, where all the parties resided; that, in fact, Creighton soon after went to Nevi-Orleans, where he had since resided, and the defendant had written to him several times, requesting of him a copy of the receipt, or directions howto distribute the fund, but had never heard from him ; and the defendant professed a readiness to distribute the fund, whenever he was informed of the names of the creditors, and of the amount of their respective debts.
The assignment of the goods to the defendant, by Creighton, was proved by a witness who was a clerk to the defendant at the time, and who entered the goods in the books of the defendant, to the credit of the estate of Creighton and Plaine : and there being a deficiency of about 400 dollars, of the full amount due to their creditors, Creighton drew a bill of exchange on Edinburgh, in favour of the defendant, for 100 pounds sterling, dated the 10th of July, 1799, at sixty days sight, which had been duly honoured and paid, and was passed, also, in the books of the defendant, to the credit of the same fund; that in December, 1801, after the witness had left the service of the defendant, he was requested, by him, to assist in making out a distribution of the fund among the creditors of Creighton and Plame^ as wag ^en ready to be distributed, but the witness, being then about to leave the city, did not attend to the defendant’s request.
The master’s report stated, that the amount of the trust property in the hands of the defendant, in July, 1799, was 1,632 dollars and 71 cents, and that the debt due from Creighton and Plains to the plaintiff was, on the 11th March, 1799, 213 dollars and 84 cents.
Boyd, for the defendant,
contended, that being an innocent trustee, the defendant was not chargeable with interest or costs, but merely for the amount of the plaintiff’s debt. He cited 1 Vern. 110. 1 Ves. jun. 452. Prec. in Chan. 254.
Harison and Wilkins, contra,
insisted, that the defendant Ijad been guilty of gross negligence; having received the property,- in 1799, and had been in cash for the amount since 1801, without having made any distribution of the fund ; and that he ought, therefore, to pay interest and costs. They cited 1 Vern. 196. 2 Vern. 548. 1 Bro. Ch. Cas. 362. 375. 384, 385. 10 Mod. 21.

Opinion:
The Chancellor.
The "defendant received the trust fund as early as July, 1799, and a list of the creditors, of whom the plaintiff was one, and he promised to distribute the fund among the creditors, according to a list of them, named in a receipt which he gave to Creighton. He has not done it, and the plaintiff filed his bill in April, 1803. The defendant renders no sufficient excuse for not distributing this fund. He appears to have been guilty of negligence, and he does not show what he did with the fund in the mean time. The presumption is, that he appropriated it to his own use. He is justly chargeable with interest, on the fund, from the time it was converted into cash, and with the costs of suit. This is the rule of the court in the case of a negligent trustee, and the cases which were cited by the plaintiff's counsel, particularly the one of Treves v. Townshend, in 1 Bro. 384, 385., are to this point. Let tiie decree he so entered accordingly.