Court Opinion

ID: 4936221
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:15:43.796047+00
Date Added: 2024-06-11T08:14:41.767140
License: Public Domain

Haskell, J.
Scire facias against trustees. Plaintiff’s debtor, being insolvent and about to leave home, conveyed certain chattels to defendants, from which they realized in cash $767.79, and also an equity of redemption by deed for the expressed consideration of $3000, containing a clause: “Said premises are hereby conveyed subject to a certain mortgage owned by tbe Union Mutual Life Insurance Company, on which the sum of $1800, with interest from November 12, 1895, is now due, (the deed was dated March 3, 1896), which mortgage the grantees, their heirs and assigns, are to assume and pay, the said amount forming a part of the above named consideration.” The grantor owed the grantees, at the date of the deed, about $926.89. All the evidence, taken together, shows a purpose on the part of the debtor to prefer defendants and then secure his other creditors by the trust he had raised in defendants’ hands. There seems to have been no fraud on the debtor’s part. The defendants became trustees for creditors and were bound to execute their trust according to its terms with strict fidelity. Any evasion or attempt not to do so would become a fraud upon the other creditors. The terms of their trust required them to pay the mortgage and then hold the chattels and land conveyed to them to secure themselves for their original debt and the amount paid to redeem the mortgage and apply the balance to other creditors. Did they perform their trust? No. Spaulding, one of the trustees, and Geo. I. Trickey, originally took the mortgage and afterwards transferred it to an insurance company and indorsed the notes waiving demand and notice. Trustees, instead of paying the mortgage as they had engaged to do, permitted Trickey to take an assignment of the mortgage and then, by foreclosure, gain title to the farm, which he did. To permit him to hold this title for his own benefit would be a fraud by the trustees *99upon the other creditors, to whom their engagement in their deed to pay the mortgage inured. Cumberland Nat. Bank v. St. Clair, ante, p. 35.
One view only shows good faith, and that is, trustees to be held, by their conduct, to have sold the equity in the farm to Trickey at a fair value and for cash, which became assets in their hands in execution of their trust, and which, together with cash received from the sale of the chattels conveyed to them, should be applied to the payment of their own debts, leaving the balance subject to attachment, because the trust was voluntary and no creditor had become a party thereto, so that his rights became fixed. Pleasant Hill Cemetery v. Davis, 76 Maine, 289. The action is scire facias, and the plaintiffs should have judgment against the trustees as defendants herein.

Defendants defaulted for $836.90.