Court Opinion

ID: 6664188
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:04:54.719342+00
Date Added: 2024-06-11T16:00:17.119023
License: Public Domain

Archer, C. J.,
delivered the opinion of this court.
The order of the Chancellor, appealed from, could only be sustained on the assumption, that the former trustee rightfully, as trustee, received the various amounts required by account B, to be contributed by the devisees of Jacob Gibson.
If these sums were rightfully received by the trustee, to the extent of the bank’s proportion of such payment, the claim of the bank must be considered as extinguished.
But the decree, under which the trustee acted, created no responsibility on the trustee, in relation to these contributions. It did not make it his duty to receive them, and we do not think, that any order passed in the case, has created such responsibility; such a consequence cannot be ascribed to the Chancellor’s order, of 15th April 1842, on Tilton’s petition, which requires the trustee to report the suras received from the sales *456of the land, and from the parties to the suit. The Chancellor, when Úre trustee should have made his report, was left to pursue such course, in confirming or rejecting what the trustee had done, after the report should have come in, as, in his judgment, might have in the most proper manner dispensed justice between the parties, untrammelled by his order above referred to.
What would be the consequence of the trustee’s refusal or neglect to report, in pursuance of the order of the Chancellor, it is unnessary to state, further than to say, that such disobedience did not create a liability on the part of the trustee, under his bond, for the amount of the above referred to contributions, which had been paid to the trustee, without authority from the Chancellor to receive them; and which, in the then state of the cause, should have been paid by the contributors, into the Court of chancery, by authority of that court.
Nor, in our opinion, does the order of the Chancellor of the 14th April 1841, whereby he confirmed accounts A and B, in any manner sanction the receipt, by the trustee’s, of these contributions. The order, so far as it directs the trustee to pay over the proceeds accordingly, must be considered as having reference to the proceeds of sale, acknowledged by the trustee in his report to have been received. Account B, which is confirmed, is not an account of the real estate of Jacob Gibson with the'trustee, but an account with sundry persons, who, choosing to be contributors, might exempt their lands from sale under the decree; and the credit side of this account shows, that the fact of any previous payment having been made, was not disclosed to the Chancellor; on the contrary, the sums placed to the credit of that account, are stated to be due from the persons therein. Besides, no commissions are allowed' in account B, which is fair to infer, would have been allowed, if this order had meant to sanction the receipt, by the trustee, of these contributions; and looking to these facts, it is quite impossible to consider the confirmation of these accounts as conferring any authority on the trustee, to have received these contributions. If it had been deemed important to have paid these contributions, an order should have been obtained, autho*457rising the trustee to have received them; or they might have been paid, with the sanction of the Chancellor, into court. As no such order was applied for, the receipt of these contributions by the trustee, was wholly without authority, and can in no manner affect the persons in this cause, to whom, if rightfully paid, they would have been due.
Had the money remained in the hands of the trustee, and so appeared by his report, the Court of chancery would, doubtlessly, have sanctioned such payments, and distributed them according to the equities of the respective parties; but if it be true, as suggested, that the amounts thus received by the trustee, have been by him wasted, we cannot conceive that equity, by sanctioning what was done without authority, would endanger the interests of the parties having claims on such contributions.
We do not mean to intimate by any thing we have said, that if the Chancellor had sanctioned, as contended, by his order the receipt of the funds, after the same had been wasted, that such order would have been conclusive on the parties.
The sum now in court for distribution, is made up of the balance due on the sale of Marengo, and of contributions made by sundry persons, whose names are mentioned on the credit side of account B. The proceeds of sale, and of these contributions, were rightfully appropriated by accounts A and B: which have been ratified. Exceptions thereto having been overruled, and the fund in hand must be applied, (as what has heretofore been received of the purchase money, may have been wasted, or in danger,) to all the creditors and others, in accounts A and B, to whom such money was awarded, in due proportion, having regard to the respective amounts due to said claimants, as appear by the above referred to accounts.
So far as the fund for distribution, consists of the purchase money for the lands sold by the former trustee, that must be distributed among the persons in account A, to whom the purchase money was distributed; and so far as the same consists of money paid to the trustee by the contributors, that must be distributed among the persons, to whom, by the account B, the contributions were assigned; and the said distributions axe to be *458made by the rale just designated. If the entire funds have not been wasted, but the trustee has made payments, to some extent, to the claimants, then, in making distribution of the fund in court, such sum as shall be found to have been paid, shall be taken into account; and in such case, such claimant shall be excluded, if it be found, that he has received more than he would have received, if all die funds had been wasted and the fund was distributed; as in such case, has been above directed.
There is nothing, in our judgment, which should prevent McCormick from obtaining his due proportion of the funds in the hands of the trustee. He had sought redress, in a court of equity, for the recovery of his claim, and the former trustee was his solicitor—but the relations between him and his solicitor, so far as is disclosed by any evidence on the record, became dormant when the decree was obtained; and the solicitor, when he was appointed trustee, assumed a new character, and incurred tire responsibilities attendant upon such newly assumed character. McCormick was, certainly, not after-wards bound by any act which he might do, or omit to do, either as a trustee or an individual; and might seek redress for any violation of his duty as trustee, on his bond, or against him, individually, for any act of wrong he may have committed without the scope of the bond; and we cannot perceive that he is to be treated as assenting to any unauthorised receipt of money by the trastee, in virtue of any supposed relation of client and attorney. It is not meant to be intimated, that an attorney, after judgment or decree, has no power by execution to collect the debt; but after decree, if the attorney becomes a trustee, and either, as trustee, receives the money, or it is paid to him, in that character, and received by him, as was done in this case, under color of his office as trustee, such payment to the trustee, is not a payment to the complainant. It has been suggested, that John Scott, as solicitor for McCormick, filed his answer to Tilton’s petition, but this was long after the unauthorised receipt by the trustee: the answer having been filed on the 19th May 1842, and the money received by the trustee in March 1839.
*459By the account, which has been confirmed by the Chancellor, and which is appealed from in this case, after paying the costs and expenses of the present trustee, the money received by the present trustee is applied, to make good to the contributors over-payments made by them; while the creditors, and others, are made to lose, by the admitted defalcations of the former trustee. We cannot perceive any principle of equity, which would, under such circumstances, place one creditor on higher ground than another; nor can we conceive why he, who without authority has over-paid his contribution, should, for reimbursement, obtain compensation from what has been saved, while the creditors, whose claims had been allowed, and properly allowed, are thrown upon the possible chance of recovering their claims from a trustee’s estate, which is admitted to bo insolvent.
The order of the Chancellor appealed from, is reversed, and the cause remanded to the Court of chancery.
ORDER REVERSED AND CAUSE REMANDED.