Court Opinion

ID: 6641768
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:46:12.015964+00
Date Added: 2024-06-11T15:59:16.021200
License: Public Domain

Opinion.
Cooper, O. J.,
delivered the opinion of the court:
The facts of the case, as far as they are necessary to be stated, are that one Henry Dulce died in July, 1882, the owner of a large tract of real estate and of considerable personalty. By his will, *380he appointed one B. F. Duke executor, charged his whole estate with the payment of his debts, gave his executor plenary powers to sell any property necessary to be sold for the payment of debts, and after giving some lands to be selected by the executor to certain old family servants, made his executor and appellee H. J. Duke residuary legatees and devisees of the remainder of his estate. The executor was relieved from the obligation of giving any bond; the estate was heavily in debt, was probably insolvent at the death of the testator, and is certainly now in that condition. On the 1st of August, 1881, the appellant obtained a judgment in the Circuit Oourt of Pontotoc county against the said H. Duke, which was enrolled on the 9th day of that month; some payments were made on this judgment in 1881, but there is a large balance due and unpaid. After the expiration of more than a year from the death of the testator the appellee procured an order from the circuit judge of the district in which. Pontotoc county is included, under which he sued out his execution and levied it upon the lands in controversy in this suit as it is provided may be done by section 751 of the Code of 1880. The appellees thereupon exhibited this bill seeking to enjoin the sale under execution upon the ground that it would cast a cloud upon his title.
The title of complainant asserted in the bill is derived as follows :. On the 12th day of May, A. D. 1881, Henry Duke executed a deed of trust to one Barr, trustee, to secure a debt of $2,800 to one Mrs. McOaw. The complainant having purchased the note, secured thereby after the death of the maker, caused the land to be advertised and sold by the trustee and became the purchaser at such sale of a large part thereof. As to the other parts of the land, the history of the title is this: In 1880, Henry Duke borrowed from one Mitchell the sum of $1,500, for which he executed his promissory note with the complainant and B. F. Duke as sureties. It appears also that Henry Dulce had been executor to the will of the father of the complainant and as stated by complainant, who testifies as a witness, he as such executor conveyed to complainant certain lands which it was supposed was a part of that estate, but the title thereto having failed, the said Henry Duke undertook and promised to pay to the plaintiff the value of the same. This supposed obligation, added to the amount of the Mitchell debt, made the sum of $2,350, and on the 20th day of September, 1880, Henry Duke executed his note for that sum payable to the com*381plainant, due May 1, 1882, and to secure the same executed a deed of trust upon Ms personal property, consisting of horses, mules, cattle, hogs, goats, etc. On the 11th day of July, 1881, to further secure complainant, because of Ms liability on the note to Mitchell and also to secure a note of that date for the sum of $707.96 (which was given for a balance of account due by Henry Dulce to H. J. Dulce), Henry Duke executed another deed of trust whereby he conveyed to one Huntington, trustee, certain other of the lands in controversy with power to- sell ^he same upon default in the payment of the debts secured. The trustee, in May, 1883, proceeding under this deed, sold the lands thereby conveyed and at this sale the complainant became the purchaser of the greater part thereof; one Carr purchased some of the lands at this sale, but in consideration of the payment to him of about $50 transferred to complainant his bid and he received a title from the trustee. We may here state that in May, 1882, Henry Duke, to secure a debt of $286.43 and also to further secure the note of $2,350 of date September 20, 1880, executed another deed of trust to Huntington, trustee, whereby he conveyed all his crops of cotton to be grown during the year 1882 and also all cotton which should arise to him from the rents of his other lands. The complainant, stating thus his title to the lands, sought to enjoin the execution sale and for that purpose exhibited the original bill in this cause, on which an injunction was granted and served. The appellant, in response to this bill, filed its answer, which it made a cross-bill and attacked the validity of the sales under which complainant had purchased. The title derived under the sale made by Barr, trustee in the deed given to secure the debt to Mrs. McCaw, is assailed by the allegations that the complainant had possessed himself of the personal estate of the testator and realized therefrom the money by which payment was made in the purchase of the note from Mrs. McCaw. It is also charged that the sale was not fairly made, that the complainant had concealed from the defendant the fact that the sale had been advertised by the trustee for the purpose and with a view of bringing about the sale in the absence of the defendant’s agent and attorney, in order that he might buy in the property at much less than its real value. That in fact this was done and the property sacrificed. The evidence in this branch of the case shows that a short time before the sale, one Young, the attorney of the appellant, applied to an agent *382of Mrs. McOaw’s who had the note due to her, for collection, and requested him to give notice to the bank if a sale should be advertised under that deed, and that the agent promised to comply with this request. It is also shown that at about the same time the attorney made the same request of the complainant, who made no response to the request. A few days after this the complainant purchased the note from Mrs. McCaw’s agent, and in the conversation then had with him suggested that “ he did not want his business affairs made public,” or words to that effect. Soon after this purchase the sale was advertised by complainant and on the day fixed the trustee appeared and sold the lands. There is nothing iu the record supporting the allegations of the bill that the funds of the testator were used by the complainant in making the purchase of the note from Mrs. McCaw. In the absence of such proof, we see nothing in the conduct of the complainant which invalidated the sale under this deed. He owed no duty to the defendant, who was a judgment -creditor of the testator with a lien upon the lands subordinate to that of the trust deed. The defendant was not only charged with constructive notice of the contents of this deed, but seems to have actually known the powers thereby conferred upon the trustee. The debt secured was unquestionably due, the method for giving notice was expressly provided, and no creditor or other person interested was entitled to any other notice. The complainant had not agreed to give any information on the subject and though it may be true that he derived and expected to derive a benefit by the ignorance of the defendant of the day of sale we can see nothing in this nor in the fact that by reason of such ignorance he actually got the advantage of buying the property at less than its true value which should invalidate his purchase.
So far, therefore, as the decree sustains the purchase thus made it meets with our approval, is and will bo affirmed.
We come now to a consideration of the facts disclosed in reference to the sale under the deed of July 11, 1881, in which Humington was the trustee. It will be noted that in all the deeds of trust given to secure the various debts to H. J. Duke, the indebtedness to Mitchell of $1,500 was secured. It entered into the note of $2,350, given in September, 1880, and this note was again secured by the deed of May 12, 1882. Duke testifies that it was the $1,500 referred to in the deed of July, 1881, under which the land was sold. In addition to this debt, there was secured by the *383deed of July 12, 1881, the further sum of $707.96 and by the deed of May 12, 1882, the further sum of $286.43, together with $750 for advances to be thereafter made to Henry Duke during the year 1882. The total indebtedness, exclusive of the sum to be advanced and of the sum which Henry Duke assumed to pay by reason of the failure of title of some lands which he as executor of H. J. Duke’s father had set apart to H. J. Duke, was $2,694.39 and interest; thereon. Adding interest to these debts to December, 1882, at which time the first payment was made to him by his executor, and assum&g that the whole of the $750 contracted to be advanced had in fact been advanced, it will appear that the total amount due (exclusive of the obligation for the amount assumed for the failure of the land title) was about the sum of $3,900, and this sum is within $100 of the amount alleged to have been due by the answer to the cross-bill.
We are at a loss to determine upon what theory H. J. Duke asserted or Henry Duke admitted any liability on his part to account to H. J. Duke for a failure of title to lands which he had received from his father’s estate. Certainly the promise to pay sum sum was nudum, pactum, and fixed no obligation on him to' do so. We have, therefore, dismissed that sum from consideration. By the accounts rendered by H. J. Duke and filed as exhibits to his testimony and by his testimony it is shown that before the sale by Huntington, trustee, there had come to the hands of H. J. Duke from the proceeds of the mortgaged crops and personalty the sum of $3,641.61 and after the sale of the lands (in December, 1883) he received the further sum of $958 from a sale made under the deed of September, 1880, of personal estate thereby conveyed. In explanation of these payments the complainant testifies that a large part of these credits were applied to the payments of accounts created by the executor after the death of the testator and of debts due by tenants of the testator of which he or the executor had assumed payment. These appropriations should not have been made. It would be unjust to the defendant, a judgment creditor having a lien upon the lands of the testator subordinate to that given to the complainant by his deed of July, 1881, to permit the executor to divert the proceeds of the mortgaged personalty to the payment of unsecured debts, leaving the mortgage to operate on the lands to the exclusion of the subordinate lien.
The record is full of suggestions that this was an attempt by *384the executor to favor his brother, the complainant, at the expense of other creditors. We find that the complainant having bought a part of the lands under one of the sales on which rents were duo for the year 1883 divides the rents received with the executor, on the theory that he being a residuary legatee and devisee was entitled to such participation. That a nonresident executor of an insolvent estate acting under a will which relieved him from giving any bond can, by any such arrangement with a secured creditor, extend the security over the whole estate by agreeing to a misappropriation of the proceeds of the mortgaged property, cannot be tolerated. According to the showing made by the complainant, there was but little if anything due him at the date of the sale under the deed of trust of July, 1881. At that sale he became the purchaser of a large body of land, which a proper application of the payments made to him would have freed from liability to his claim under the deed and subjected to the judgment sought to he enjoined. It would be inequitable to permit him to enjoy the fruits of his own wrong to the exclusion of another creditor equally meritorious and having priority of right finder the law.
The decree must, therefore, be reversed in so far as it dismisses the cross-bill in reference to the relief sought against the sale under the deed of July 11, 1881. That sale is vacated and annulled. The court below will direct a proper account to be stated, applying the credits derived from the mortgaged property to the payment of the debts secured by the several mortgages. The property will then be sold under the direction of the court. If anything remains due to complainant, he will be entitled to priority or satisfaction. The remainder must be applied to the judgment of the appellant. In taking this account, no allowance should be made for the sum ($850), agreed to be paid by ITenry Duke for the failure of title of the lands which descended to the complainant from his father.
Decree reversed.