Lance v. Russell, 165 N.C. 626 (1914)

May 20, 1914 · Supreme Court of North Carolina

165 N.C. 626

F. A. LANCE v. J. N. RUSSELL.

(Filed 20 May, 1914.)

1. Reference — Evidence — Court’s Findings — Trusts—Interest—Appeal and Error.

Where the findings of fact of the trial judge in passing upon a report of a referee are made upon legal evidence introduced upon the referee’s hearings, they are not subject to the consideration of the Supreme Court on appeal; and in this action the trial court necessarily held as a conclusion of law from the facts found, that the trustee was not chargeable with interest in favor of the trustor.

2. Trusts and Trustees — Costs—Interpretation of Statutes.

The trustee of an express trust is not personally liable in an action brought against him for the costs of court, where it is not shown and properly established that he has mismanaged the trust estate or has been guilty of bad faith. Revisal, sec. 1277.

Appeal by defendant from Brag aw, J., at February Term, 1913, of EuNCombe.

Civil action tried upon exceptions to report of referee.

Tbe court reviewed tbe findings of fact and law made by tbe referee, and rendered tbe following judgment:

Tbis cause coming on to be beard upon motion of tbe plaintiff to confirm tbe reports of tbe referee filed in tbis cause at tbe January term of tbe Superior Court of-Buncombe County, and continued by consent of all parties to tbe February term of said court, and it being consented by counsel, as will appear from stipulations entered into and duly signed and filed among tbe papers in tbis cause, tbat tbe undersigned judge, bolding tbe courts of Buncombe and Madison counties by exchange, might take tbe record, reports, exceptions, evidence, and briefs in said cause, and pass upon tbe defendant’s exceptions, and upon motions. made, out of term and at chambers, either in or out of tbe Fifteenth Judicial District, with tbe same force-and effect as if tbe same were duly beard within said district, and tbat tbe said undersigned judge might enter such judgment or orders in said cause out of term and out of said district and at chambers as be might in said district' and in term-time, and tbat such judgment or orders, when rendered out of term or out of district, shall have full force and effect as judgment duly and properly entered, with leave to either party to file exceptions only to said judgment or orders as might be filed or taken if said-order or judgment were entered regularly in term-time; and tbe said matters being considered by said court at Marshall, in tbe county of Madison, on tbis 6 March, 1913, tbe court makes tbe following

FINDINGS OF FACT.

1. That on 1 April, 1902, F. A. Lance conveyed by deed to J. N. Russell certain lands in Buncombe County, said to contain 325 acres, as will appear by deed registered in Book 123,. page 527, in tbe records of Buncombe County.

2. Tbat contemporaneously with the execution of said deed a collateral agreement was executed by tbe said J. N. Russell, a copy of which, is attached to the answer in the cause, marked Exhibit “A,” declaring the trust upon which the said land was conveyed to the said Russell.

3. That on 16 July, 1903, the defendant, J. N. Russell, pursuant to said trust, sold and conveyed to Hugh T. Brown, for the consideration of $3,500, the lands conveyed to him.by said Lance as aforesaid.

4. That on 19 July, 1903, the date of the conveyance from J. N. Russell to Hugh T. Brown, there was an outstanding encumbrance upon said lands, executed by F. A. Lance to Hoffman, trustee for the British-American Mortgage Company, securing notes upon-which there was due on this debt $178, including principal and interest, which indebtedness was assumed by Brown, the purchaser.

5. That on the said date 19 July, 1903, F. A. Lance was indebted to J. N. Russell, including principal and interest, $1,370.36, represented by a judgment docketed on the judgment docket of Buncombe County, No. 28, page 134:

Principal .$ 954.37 Interest . 88.50 $1,042.87 $ 154.00 16.64 $ 170.64 $ 135.00 21.65 $ 156.85 Note dated 20 October, 1900: Principal. Interest ....... Note dated 1 October,' 1901: Principal. Interest ..

6.That deducting $778 assumed by H. T. Brown, representing the indebtedness to the British-American Mortgage Company, Hoffman, trustee, and also deducting the aggregate amount of the indebtedness from Lance to Russell ($1,370.36), there remained in tbe bands of J. N. Russell,'due from bim to F. A. Lance, from tbe proceeds of tbe sale of land to H. T. Brown, tbe sum of $1,351.64.

7. Tbat on 3 September, 1903, J. N. Russell paid a draft drawn by Lance in favor of Locke Craig, amounting to $200, and a subsequent payment to tbe attorneys of Lance was made by Russell, amounting to $150; tbat deducting these amounts ($350), there remained in tbe bands of J. N. Russell $1,001.64.

8. Tbat an action was instituted by II. T. Brown against F. A. Lance, and an attachment was served on J. N. Russell, and $70 was retained by said J. N. Russell to indemnify bim against any judgment which might be obtained against bim as garnishee in said matter.

9. Tbat after tbe deed from Russell to II. T. Brown on 19 July, 1903, F. A. Lance claimed title to the lands in controversy adversely to Brown, remaining in tbe actual possession of tbe bouse thereon and about 3 acres of land, and preventing tbe actual occupation, and interfered with tbe possession by tbe said Brown, contesting tbe title of tbe said Brown through one J. ~W. Ducker in 1912, thereby delaying tbe. collection by Russell from Brown of tbe purchase money for said lands, and during tbe pendency of tbe said suit between Brown and Ducker, and until tbe final judgment in tbat case, Lance bad possession and exercised dominion over tbe land sold by Russell to Brown and tor-tiously prevented delivery of possession by Russell to Brown.

10. Tbat tbe defendant, J. N. Russell, executed bis trust in good faith.

CONCLUSIONS of law.

Upon tbe foregoing findings of fact, tbe court concludes:

1. Tbat tbe plaintiff, F. A. Lance, is not entitled to recover interest on tbe sum remaining in tbe bands of J. N. Russell, as tbe proceeds realized from tbe sale to H. T. Brown.

2. Tbat tbe plaintiff is not entitled to recover of tbe defendant at this time tbe sum of $70 retained by tbe said Russell pursuant to the attachment issued in tbe case of H. T. Brown against F. A. Lance.

3. That there is due from tbe defendant to tbe plaintiff tbe sum of $1,001.64, the balance remaining in tbe bands of tbe defendant as tbe proceeds realized by tbe defendant from tbe sale of land to Brown, after deducting tbe indebtedness represented by liens upon tbe said property; tbe.amounts due from Lance to Eussell; tbe amount paid by Eussell to tbe order of Lance and to bis use, as enumerated in tbe foregoing findings of fact, less tbe $70 retained by tbe said Eussell on account of tbe said attachment in tbe case of Brown against Lance, and less any sums paid by Eussell to Lance or by orders of court and not herein enumerated.

It is, therefore, ordered, adjudged, and decreed that tbe plaintiff, E. A. Lance, recover of tbe defendant, J. N. Eussell, tbe sum of $931.64, less one-balf of tbe total cost of this action and less any sums paid by court not herein enumerated.

It is further ordered and decreed that tbe defendant, J. N. Eussell, shall pay tbe costs of this action, one-balf thereof to be deducted from tbe amount in bis bands found to be due to .the plaintiff, and tbe remainder to be paid by him individually; tbe said costs to be taxed by tbe clerk, and to embrace tbe total cost of this action.

It is further ordered, adjudged and decreed that tbe defendant, J. N. Eussell, be permitted to retain in bis bands the said sum of $70 attached in tbe action of Brown against Lance, to abide tbe final judgment in that case, and should it be ultimately adjudged that tbe plaintiff II. T. Brown is not entitled to recover said amount, then upon such determination, tbe plaintiff F. A. Lance shall recover tbe same of tbe defendant, J. N. Eussell.

STEPHEN C. Bkagaw,

Judge..

Tbe defendant excepted to. said findings and judgment, and appealed to tbe Supreme Court.

II. B. Garter, J. D. Murphy for plaintiff.

Jones & Jones, Britt & Toms for defendant.

BbowN, J.

This is an. action brought by the plaintiff to recover of the defendant a balance due plaintiff in hands of defendant as trustee for the plaintiff.

It appears that the plaintiff had conveyed a tract of land to the defendant in trust to sell it and pay certain debts and execute certain trusts and to account to the plaintiff for any balance remaining.

The claim for damages, alleged in the complaint,, has been eliminated, and the only controversy now relates to the balance due the plaintiff under the agreement with the defendant, and set out in the record.

The cause was referred to a refereé, whose report was reviewed by Judge Bragaw, evidently with painstaking care, who made his own findings of fact and conclusions of law.

With one exception, the assignments of érror relate to ceftain small sums which defendant claimed credit for in the settlement, and which the judge refused to allow.

There is ample evidence to support his Honor’s findings of fact, and such being the case, this Court has no power to reverse or ' review them. The conclusions of law necessarily follow from the findings of fact.

The tenth assignment of error is because the judge ordered that the defendant pay one-half of the costs of the action. In this there is error.

Under Revisal, sec. 1217, a trustee of an express trust, or an executor, or an administrator, is not liable personally for costs,' unless the court shall direct that such trustee, executor, of administrator shall be personally taxed therewith, as a penalty for mismanagement or bad faith.

His Honor did not adjudge that the trustee had mismanaged the fund or trust imposed upon him by the agreement, but his Honor did find in ninth and tenth findings of fact, set forth in his judgment, that the trustees had not been negligent in the collection of the balance of the purchase money from Hugh T. Brown for the land in controversy, and that he had executed his trust in good faith.

In the case of Smith v. Smith, 108 N. C., 369, the Court held that it was error to tax trustees of an express trust who were parties to an action with cost, unless the court had adjudged that they were guilty of mismanagement or bad faith in such action.

In Sugg v. Bernard, 122 N. C., 155, it is decided that where no mismanagement or bad faith on the part of a trustee is shown in an action to which he is a party, he is not individually liable for costs.

The costs of the Superior, as well as this Court, will be taxed against the plaintiff.

Modified and affirmed.