Court Opinion

ID: 8003278
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:51:06.767468+00
Date Added: 2024-06-11T16:35:47.244347
License: Public Domain

Bliss, Judge,
delivered tbe opinion of tbe court.
Defendant was named as trustee in two deeds of trust executed by James Reid, Sr., father of plaintiff, both for tbe benefit of John H. Ware, one to secure a note of $500, and tbe other a note of $450 and interest; and afterward tbe said Reid, Sr., conveyed the same property to the plaintiff, subject to said deeds of trust. Upon maturity of tbe notes tbe trustee sold tbe prop-perty, which was bid in by R. G. Waters, for tbe use of the firm of Waters & Cave, for the sum of $1,400, and a deed was executed reciting tbe bid. This suit was instituted to recover of Mullins, tbe trustee, tbe balance in bis bands over and above tbe amounts due upon tbe notes named in tbe trust deed.
Among other things, tbe defendant set out in bis answer that James Reid, Sr., was largely involved in debt over and above the notes secured by tbe trust deed, and more'than be was able to pay, tbe said Waters & Cave being among bis- creditors; that 'the deed to bis son, tbe plaintiff, was without consideration, and made to defraud bis creditors ; that tbe said Waters & Cave put their claim in judgment, and levied on and sold tbe interest of Reid, Sr., in tbe property, bidding it in themselves; that they also purchased the notes secured by tbe trust deeds, and at tbe sale by defendant owned tbe same ; and that at said last sale no money, in fact, was paid to defendant, but tbe notes were delivered up to him and canceled.
So much of tbe answer as sets out these facts was, on tbe plaintiff’s motion, stricken out by tbe court; and thus tbe question is now presented whether, in this action, tbe facts so set out constitute any defense.
It is of no consequence whatever to defendant "whether the sale to tbe plaintiff was honest or not; until set aside at tbe suit of the creditor, it will stand, and strangers will not be.permitted to prove tbe fraud. Tbe defendant was a trustee for both tbe other parties to' tbe deed, and, after paying tbe debt, held tbe surplus for *346the benefit of the grantor or his assigns. The plaintiff was the assignee, and was entitled to it until some one else should establish his right. The trustee has no right to act as attorney for a creditor, and assume or show, in excuse for not paying over the money, that such creditor might have an equitable claim to it if he should choose to pursue it. And besides, a decision in this case will not conclude the creditor. He is not a party, and is not asserting his right; and whatever the decision now, may hereafter prosecute his claim by another proceeding. His right cannot be passed upon collaterally, and the court will not attempt to do so.
It may be said that the facts set up show that the creditor was entitled to the money, and the trustee was not bound to collect it from him. But the trustee stands wholly impartial between the parties, and he must be’ treated as though the whole bid was paid over to him as recited in his deed, and the surplus was paid to the creditor. He thus not only places the parties in a different position by making it necessary for the debtor’s assignee to sue for the surplus, but he assumes to decide upon the legality of a conveyance good upon its face, and good upon the facts assumed, against all the world except the creditor, and which he might never impeach. This is not an impartial execution of his trust; and that he may have decided correctly is no excuse for interference in a matter outside of his duties as trustee.
Judgment affirmed.
The other judges concur.