Court Opinion

ID: 6674123
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:14:30.361981+00
Date Added: 2024-06-11T16:00:38.664115
License: Public Domain

The opinion of the court was delivered by
"Willard, C. J.
The principal question is whether the demands against the estate of McClenaghan, made by E. T. Stackhouse, are barred by the statute of limitations.
The facts out of which the question arises are that Stackhouse and McCormick were the assignees of Dillon, an insolvent *197•debtor, and McClenaghan and Sellers were appointed agents under the act regulating assignments of debtors (6 Stab. 365), and a committee in behalf of creditors was also appointed. McClenaghan was an attorney-at-law, and certain dioses in action were placed in his hands for collection by the assignees, which do not appear to have been accounted for. The demands of all the creditors interested under the assignment, except those ■of Caldwell and Eobinson, who were preferred, have been purchased, and are now held by Stackhouse. McClenaghan is dead, .and his executrix is now called upon to account for so. much of the assigned estate as came into the hands of her testator, as .already stated. The statute of limitations is interposed as a defence to this demand.
It is contended, on the one hand, that McClenaghan was a trustee of an express trust, as it regarded all the assets of the assigned estate that came into his hands while acting as agent for the creditors, and that his executrix being charged with the execution of such trust to the extent of accounting for all. such assets, she cannot take advantage of the bar of the statute; on the other hand, it is contended that the only demand against the estate of McClenaghan, existing under the circumstances already briefly stated, arises upon a simple contract obligation incident to the relation of attorney and client, existing between the assignees and McClenaghan as it regards the dioses in action placed in his hands for collection, and, as such, is barred by lapse of four years .after maturity.
It cannot be doubted that McClenaghan, as agent, was a trustee of a power under the deed of assignment to be exercised for the benefit of creditors. The statute must be regarded as a part of the assignment made under it, and all the powers and responsibilities conferred and imposed by the statute upon the agents •appointed by creditors have the same efficacy as if expressly •created by the deed of assignment. Assuming the view taken in • Salas v. Cay, 12 Rich. 559, and Miller v. Sligh, 10 Rich. Eq. 247, to be conclusive, and it is clear that McClenaghan, by accepting the appointment of agent, became bound to an active participation in the disposition of the assigned estate. He was boijind to inform himself of the condition of the assets and of the *198indebtedness of the estate, and to protect and apply the assets. If it be conceded that the legal title to the assigned estate remained exclusively in the assignees, yet it is clear that the legal powers of the agents and the assignees are equal as it regarded the control of the assigned estate. This ample power of control over this disposition of the estate was placed in the hands of McClenaghan as a trust for the benefit of creditors, and equity regards the depositaries of such powers, whether coupled with the legal title or without it, as chargeable with responsibilities of the same nature, and of a strictly fiduciary character.
' It remains, then, to consider, in the next place, what position an agent, under the act, occupies as it regards creditors, where, for any reasons, assets of the assigned estate, subject to distribution, come into his hands.
There can be no doubt that in such a case the agent is chargeable, in equity, as a trustee, with liability to account for such assets. If, as must be concluded, he is liable to account in the character of a trustee for the mode in which his powers as agent are exercised, it would follow that such an accounting would draw after it responsibility in the character of trustee for the assets in his hands. It matters not, under this view, from what source or by what authority the agent came into possession, for the nature of his powers and responsibilities are such that he could not acquire possession of such property by any means that would give less or different responsibilities than those imposed by the nature of his office. It is, therefore, unimportant to notice the circumstances under which McClenaghan became possessed of such estate, or by whom or for what immediate purpose they were placed in his hands, so far as it concerns the-nature of his liability to creditors.
From the foregoing it must be concluded that McClenaghan was liable to the creditors, under the deed of assignment, h> account, in equity, for the choses and their product in his hands at the time the demands of all those creditors, except Caldwell and Robioson, were assigned to Stackhouse. The right of Stack-house to stand in the place of creditors, whose claims he purchased, is not questioned by any party entitled to question it,, and must be deemed perfect.
*199The representative of McClenaghan has no interest to contest it. Such being the case, no reason exists why Stackhouse should not have acquired all the right, legal and equitable, of his assignors, and, among others, the right to pursue the assets in the hands of McClenaghan as a trust. The fact that, as assignee, he had a more restricted right of procedure against McClenaghan, did not prevent his acquiring a moretfull remedy by succeeding to the rights of the creditors. Nor did the fact that Stackhouse united in himself the characters of assignee and of cestui que trust, having a beneficial interest as to part of the entire beneficial interest, have the effect to terminate the trust.
The claims of Caldwell and Robinson were entitled to participate in the execution of the trust, and the trust could not be considered as fully executed until those claims had been satisfied.
It must, therefore, be concluded that the trust is subsisting, and that Stackhouse, through it, is entitled to pursue the assets in question. This disposes of the question of the statute of limitations as affecting the claims for the assets that came into the hands of McClenaghan while acting as agent, and not fully accounted for. The conclusion of the Circuit Court, sustaining the statute of limitations as against the note of E. T. Stackhouse, falling due January 1st, 1859, is free from error.
The third and fourth grounds of exception to the decree are immaterial. The question of the liability of the estate of Mc-Cleriaghan is the only one in which the plaintiffs are concerned. As to the disposition of those assets, under the assignment, the executrix of McClenaghan has no concern. The powers of the agency of McClenaghan ceased at his death, and the executrix has no further duty than to account for what was due from McClenaghan.
The fifth ground of exception is disposed of by what has already been said. Nor is the fact alleged in the sixth exception at all material. Had it appeared that the amount now claimed had been satisfied out of the estate of McClenaghan & Eairlee, that fact might be available, but it does not appear in the case.
It does not appear that the interest account of McClenaghan has yet been stated, nor, indeed, that the accounting is complete *200as to the principal sum due, for a further hearing is ordered by the decree upon additional testimony.
As the decree does not fix the principles upon which the computation of interest should be made, it must be premature to consider that question at the present time.
The decree should be affirmed and the appeal dismissed.
Appeal dismissed.
McIyeb, A. J., concurred; Haskell, A. J., dissented.