Lockhart v. Philips, 36 N.C. 342, 1 Ired. Eq. 342 (1841)

June 1841 · Supreme Court of North Carolina
36 N.C. 342, 1 Ired. Eq. 342

ELIZA LOCKHART & al. per Guardian, vs. WM. H. PHILIPS & al.*

A guardian of infants, having bonds payable to him, as guardian of the wards, transferred them without indorsement to one of his creditors, as a security for his own debt and became insolvent. Held that the assignee, having notice that the debts belonged to the wards, acquired no right by the assignment, and a Court of Equity will restrain him from collecting the debts and compel the debtor, who is made a party to the bill, to pay the amount to the infants.

In such a case full costs are awarded against the guardian and the assignee.

This was a bill filed at Fall Term, 1839, of Orange Court of Equity. Answers were put in, replications made; and the cause set for hearing and transmitted to the Supreme Court. The facts are set forth in the opinion delivered in this court.

No counsel appeared for the .plaintiff in this court.

Wm. A. Graham for the defendant.

*343Daniel, J.

Campbell and Parish, two of the defendants; executed two bonds to the master of the court of equity, for . , r ,, , , ,,,,,, the purchase money ot a tract of land, sold by the order oí the court. Phillips, (another defendant,) by permission of the court obtained possession of the bonds, as the guardian to the plaintiffs. Phillips prevailed on the obligors to take up the two bonds, thus given to the master, and execute to him, as guardian to the plaintiffs, two other bonds for the same amount. Phillips then either sold, without endorsement, or mortgaged these bonds, to Dr. Thomas Faddis. Faddis had notice, at the time of his purchase, that Phillips held the bonds in trust, as guardian of the plaintiffs. Phillips has become insolvent or nearly so, and the securities to his guardian bond are also insolvent. The bill is filed to restrain Campbell and Parish from paying to Faddis, and Fad-dis from collecting or tranferringthe bonds, and for the payment of the money to the plaintiffs. All the material allegations in the bill are admitted in the answers. We are of the opinion, that as Faddis purchased the bonds, with notice of the trust in favor of the plaintiffs, his equity is not equal to that of the plaintiff’s, which is prior in time, and prior in right. We are of the opinion, that they, Campbell and Parish, pay to the plaintiffs the purchase money due on the said bonds. And that Phillips and Faddis, and all claiming under them, be restrained from enforcing the collection of said bonds at law, and that plaintiffs recover costs of the defendants Phillips and Faddis. The decree will be for the plaintiffs accordingly.

Per Curiam, Decree accordingly.