Court Opinion

ID: 6576455
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:34:45.593364+00
Date Added: 2024-06-11T15:57:07.150009
License: Public Domain

The opinion of the court was delivered by
Barrett, J.
In this case the commissioner has reported the disclosure made by the trustee, and the facts found by him upon that disclosure. The plaintiff claims that the trustee should be charged on account of the property that was put into the hands of Bailey by the principal debtor. That property was put into Bai*689ley’s hand to secure him for guaranteing the payment of the mortgage to Scott, upon the premises conveyed by the plaintiff to the trustee.
If the trustee is to be thus charged, it must be either, because, by virtue of the transactions between the parties, he has become indebted to the principal debtor in such a way that a claim for the value of that property could be enforced by the principal debtor himself, against the trustee, or, because the property itself came into the possession of the trustee, and was held by him as the property of the principal debtor, at the time the trustee process was served.
It is to be observed that the commissioner has not found that in those transactions, there was any fraudulent intent on the part of any one i and, from anything that is contained in the disclosure or report of facts found, we should not feel warranted in inferring that actual fraud was either consummated or designed by any of the parties. Indeed, it would seem somewhat difficult to see, from the facts developed, how the plaintiff could have been the object of a fraud in the passing of the personal property into the hands of Bailey; the report and disclosure showing that the plaintiff was present and participated in the transaction. It was negotiating a sale of the real estate, which was encumbered by a mortgage of his own creating.
That mortgage wus an obstacle in the way of the trade. The arrangement was made for the purpose of removing that obstacle, and thus enabling him to convey the property, and at the same time to provide for the payment of that mortgage debt. The report states that “ the plaintiff, Jenks, knew of the transaction between Silloway and Bailey, and was present when it was made.” If, in any view, therefore, the plaintiff could avail himself of the fact of fraud, it would seem that he ought to show affirmatively, as against the impression made by these facts, that he was, in fact, imposed upon and fraudulently deceived in respect to the transactions in question, notwithstanding his presence at, and knowledge of them. Nothing of this kind being shown, the case stands to be disposed of, on the assumption that no fraud, in fact, has intervened.
Now it is clear, that the trustee had not, at the time the process was served on him, nor has he since had, the personal property for *690which he is sought to be charged, iu his hands or possession. It was then, and has since continued to he in the hands of Bailey.
It remains then to inquire, whether it so went into Bailey’s hands as to render the trustee accountable for its value. If so, it must be because it has operated as a payment of a debt which the trustee, as between himself and Silloway, was bound to pay. The plaintiff claims that it has virtually done so. The trustee denies it. He says and insists that he never undertook, nor was liable to pay the mortgage debt that was resting on the farm in question; that, in fact, his purchase of the farm and payment of twelve hundred dollars for it, was made on the express understanding that he was neither to pay, nor be subject to that mortgage.
In view of the case as it is before us, we do not feel warranted in holding that this is not as the trustee claims.
But even if we were to regard the matter differently, we see no ground for holding that the property in the hands of Bailey has operated a payment of the mortgage debt, or has even effected any realized pecuniary benefit to the trustee. He holds the title to the real estate, subject still to that unpaid mortgage debt. He holds Bailey’s guarantee, given in consideration, and upon the security of the personal property turned out to him, that he, Bailey, will pay said mortgage debt.
This undertaking of Bailey is to the trustee himself, and in no way involves the privity, or affects the rights of the mortgagee.
For aught that appears, the mortgagee has every right under his mortgage that he ever had, and may enforce it against the land. All that can be. said is, if Bailey pays it, he will thus discharge his undertaking to the trustee. If he does not pay it, and the trustee shall be compelled to do so, he will stand answerable on that undertaking.
It is quite conclusive against charging the trustee for a payment made for his benefit, that the payment has not been made.
Under these views the case does not require a wider range qf discussion.
The judgment of the county court is affirmed.