Court Opinion

ID: 8256843
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:32:36.298008+00
Date Added: 2024-06-11T16:43:01.385372
License: Public Domain

Mr. Chief Justice Smith
delivered the opinion of the court.
John Robson, the appellee, filed his bill in the superior court *108of chancery against Canady Cason, the testator of the appellant, alleging that certain lands and slaves were conveyed by Wesley J. Franks to said Cason in trust to secure the payment of certain notes made by Franks to Asa B. Metcalf; that Met-calf, being indebted to the complainant, transferred one of the notes to him as collateral security; that Cason accepted the trust, and having notice that complainant held the said note for the purpose above stated, sold a part of the property conveyed to him as trustee for an amount of money sufficient to pay off all the notes secured by the trust deed, and entered the same as satisfied; and that after the sale, and before the deed was entered satisfied, or the proceeds disposed of, the complainant demanded payment from Cason of the amount due from Met-calf to complainant. The bill prayed for discovery and relief.
Cason answered the bill, admitting all the material allegations except the charge in regard to the entry of satisfaction on the deed of trust; and alleging, as a defence to the bill, that after the sale, and after respondent had paid the proceeds to said Metcalf, Metcalf offered to pay to complainant the full amount of his debt, pursuant to an agreement between them, entered into at the time Franks’s note was transferred to complainant as collateral security; but that complainant told Met-calf that he had no immediate use for the money, and proposed to Metcalf that he should pay two thousand dollars of the debt due him, and that complainant would wait another year for theremainder; that Metcalf accepted the offer, took one of his notes held by complainant, and agreed to pay him twelve and a half per cent, interest on the residue until paid.
The cause was submitted on bill, answer, and proofs; and a decree was rendered ordering an account to be taken by the commissioner; from which an appeal was prayed to this court.
It, is insisted that the matters alleged in the answer were a good defence to the bill, and that the answer was fully sustained by the proofs.
We will first consider the sufficiency of the defence relied on in the answer. The complainant had notice of the sale of the trust property, and that the deed of trust was entered satisfied. Satisfaction was entered on the 8th of May, 1841, and so *109charged in the bill. The complainant is further chargeable with express notice that the proceeds of the sale were sufficient to discharge all of the notes then unpaid secured by the trust deed. • This charge appears from the complainant’s own showing. The bill charged that Cason acknowledged to have realized from the sale a sufficient amount of money for that purpose, and that complainant claimed payment from Cason of the amount due him by Metcalf, before Cason disposed of the proceeds of the sale. But, however strong the inference, it does not appear from any averment in the answer that the complainant entered into the agreement, having notice at the time, that the proceeds of the sale were paid over to Metcalf. Hence it is not to be controverted' that the agreement cannot be construed into a consent on the part of the complainant to any previous misappropriation of the trust fund by Cason, by which he would be discharged from his liability to the complainant.
It is further objected that the agreement, as averred in the answer, is manifestly void for want of a sufficient consideration. And hence it is insisted that it could affect neither the right nor the remedy of the complainant as a beneficiary under the trust deed as against Cason. It may be conceded that the agreement, as between the complainant and Metcalf, was void for the reason assigned, and consequently did not suspend complainant’s right to proceed against Metcalf for the collection of the residue of the debt remaining unpaid. But the invalidity of the agreement as between these parties is not, we apprehend, the question to be considered. The true point of inquiry is, whether we are not to consider the agreement, under the attending circumstances, as a consent on the part of the complainant that Metcalf should have the use of the money'for the time stipulated, to which the complainant was entitled, and which was then in the hands of Cason as trustee.
The complainant, with a full knowledge that Cason had realized from the sale an amount of money sufficient to pay off all the notes secured by the trust deed, and that the deed itself had been entered satisfied, and having no immediate use for the portion of the proceeds of the sale to which he was entitled as-the creditor of Metcalf, holding one of the trust notes as col- *110' lateral security for his debt, proposed to Metcalf that he should -.pay two thousand dollars of his debt, and that complainant would wait another year for the remainder, upon Metcalf agree- ' ing to pay interest at a high rate upon the residue of his debt. The-proposition thus made was accepted, and a settlement was accordingly made.
This transaction, in our opinion, can be looked upon in no other light than as an agreement that Metcalf should have the use of the money then in the hands of Cason. This was most ■evidently the construction which both parties put upon the agreement. The complainant had no immediate use for the money, and when full payment was offered, proposed that two thousand dollars should be paid on Metcalf’s debt, and that he would wait another year for the residue. If Metcalf was not to have the use of the proceeds of the sale, the proposition was absurd, and its acceptance by ■ Metcalf without any motive whatever. For-why would the complainant agree to wait with Metcalf, and exact from him a high rate of interest upon his debt for the indulgence, if he designed to compel payment from Cason, -or for what purpose could Metcalf have acceded to those terms, unless the complainant had abandoned his recourse upon Cason ? If the proceeds, therefore, were afterwards paid over to Metcalf, upon no principle of law or equity would Cason be bound to account for them to the complainant. But it appears that the proceeds were in fact paid to Metcalf before the agreement was entered into, and the inference is not to be doubted that the complainant was acquainted with the fact. This fixes the true intention of the parties to the agreement, and renders it immaterial whether the proceeds were paid to Metcalf before or after the agreement. If any circumstance were wanting to show that the complainant had abandoned his recourse upon Cason, it is found in his subsequent conduct. He appears to have acquiesced in the arrangement for more than two years, having previously instituted suit against Met-calf to recover the remainder of his debt.
Metcalf was introduced as a witness for Cason, who testified that the trust property was sold at his request, and that Cason was instructed by him to receive in payment for the same in *111Louisiana funds, or what was equivalent thereto. Accordingly the property was paid for by the purchaser in the checks of the Commercial Bank of Natchez on the Commercial Bank of New Orleans, which were then at a depreciation of three or four per cent. On the day after the sale the proceeds were paid over to him by the trustee, and on the following day he offered to pay the complainant the amount he owed him in the said checks, but which the complainant then refused to receive in payment, unless they were made equal to specie, but some short time afterwards consented to receive the checks at par. The witness accordingly paid him two thousand dollars in the said checks, which paid off one of the notes then held by complainant, and back interest then due at the rate of twelve and a half per cent, per annum, which left a balance, which was indorsed as a credit on the remaining note of the witness, “ the complainant agreeing to waft with the witness until the close of the year for the remainder of the debt, and the witness agreeing to allow the complainant interest at the rate of twelve and a half per cent, per annum, as before, until paid.”
This evidence was doubtless sufficient to sustain the answer, unless, as it is contended, Metcalf was, by reason of his interest in the event of the suit, an incompetent witness.
Metcalf was indebted to the complainant on two notes; and in consideration of such indebtedness, had transferred to him one of the notes secured by the trust deed as collateral security-A sufficient amount was realized from the trust sale to pay off all the notes, and the whole of the proceeds were paid over to. Metcalf. Metcalf was hence liable, under all circumstances, to the complainant for the full amount of bis debt, and would be liable to Cason for the amount of the recovery against him in case the complainant should recover in this suit. Thus far it is manifest that the interest of Metcalf was equally balanced But it is insisted that Metcalf would be liable to Cason for the costs of this suit, as well as for the amount of the recovery, in the event that a decree should be rendered.in favor of the complainant. Consequently his interest in the event of the suit preponderated in favor of the party offering him as a witness.
The rule on this subject is thus laid down: “ Where the op*112posite interests are unequal, the witness has an interest on one side -measured by the excess of the one interest on the other; and therefore where the interest is equiponderant in other respects, yet if the witness would be liable to costs in one event, and not in the .other, he is incompetent. 1 Stark. Ev. 131.
It is clear that Metcalf would not be liable over to Cason for the costs of this suit, unless he is bound to indemnify him by reason of the receipt given to Cason for the proceeds of the trust sale. The receipt referred to is simply an acquittance or discharge from-all liability on account of the money received in virtue of the trust sale. • It contains no covenant to indemnify the trustee against the demands of any other person. In every view, therefore, his interest was equally balanced. He was, consequently, a competent witness.
Decree reversed, and bill dismissed.