Nail v. Martin, 39 N.C. 159, 4 Ired. Eq. 159 (1845)

Dec. 1845 · Supreme Court of North Carolina

39 N.C. 159, 4 Ired. Eq. 159

RICHMOND NAIL vs. THOMAS S. MARTIN.

Though it is the usual course, iu a suit brought by a cestui que trust against his trustee, for an account of the trust fund, to order a reference, yet such reference will not be ordered, when objected to by the trustee, where it appears satisfactorily on the hearing, that there is nothing due from the trustee.

Pleadings ought to be plainly written, and-the words spelt in full and without contractions, especially papers that are sworn to. If papers of a different description are sent to this Court, the Court will put the parties to the expense of making fair copies, and perhaps order the originals to be taken off the file, or dismiss the suit.

Cause removed from tbe Court of Equity of Davie County, at the Pall Term, 1845.

The plaintiff was indebted to Christian Sheek in the sum of #2000, for which Thomas Foster was surety; likewise to several other persons in considerable sums, for which Foster and James F. Martin were his sureties, or one of them was ; and to Foster himself in the sum of #500, and to Martin in the sum of #250, and to other persons. Being so indebted, he executed on the 4th day of May, 1840, to the defendant, Thomas S. Martin, an assignment of all his property, in trust to secure, and, by a sale, to pay, the debts above mentioned. Among the estates conveyed was Nail’s “ interest in a lot and steam saw-mill in Mocksville,” which was subject to an encumbrance for the debt to Christian Sheek. Thomas Foster was at that time Sheriff of Davie County, in which the parties lived.

The bill was filed in April, 1842, by Nail alone, against Martin, the trustee; and, as far as it is legible and intelligible, it purports to state, that, at the time of executing the deed, there were a considerable number of judgments and executions against Nail, in the hands of certain constables, and also of Foster, the Sheriff, which had a lien on the property, preferable to the deed ; that some of those executions were for some of the debts mentioned in the deed; and that, by sales thereon by the constables and the Sheriff, the whole of the property conveyed was disposed of, (except the lot and steam sawmill,) and thereout the whole of the executions satisfied, and that a surplus of the proceeds of those sales remain - ed in the hands of Foster’, as Sheriff, amounting to #218. .The bill further states, that on the 24th of August, 1840, the plaintiff, with the consent of the defendant, sold to John Sheek his interest in the lot and saw-mill, for the sum of $38'4 33, over and above the encumbrance of C. Sheek; and that, for that sum, John Sheek then made his noté to the plaintiff, and he delivered it to the defendant, who accepted it as a part of the trust fund, instead of the lot and saw-mill; that the defendant allowed Foster to use the note, in a settlement between him and John Sheek, of their own accounts, upon an agreement by Foster with the defendant, who was then a clerk in a store of Foster, and his agent, that he, Martin, might take that amount and the other sum of $218, held by Foster, out of the store or any funds of Foster’s In his hands ; and that he accordingly did reimburse himself, or that, if he did not, he was guilty of gross negligence in not doing so. The bill further states, that, although the debts, that were in judgment and execution, were all satisfied, yet several others remain unsatisfied ; and that, after applying thereto the effects in the defendant’s hands as aforesaid, or that ought to' be in his hands, ther# will be a surplus resulting to the plaintiff. The prayer is, that the defendant may come to an account of the sums due upon the debts mentioned in the deed, of the funds in his hands or that ought to be, and that they may be applied, in the first instance, to the balance due on the debts, and the residue be decreed to the plaintiff.

The answer states, that the deed of trust was arranged between the plaintiff and Thomas Foster, who was chiefly interested in it, as the principal creditor and surety of the plaintiff; and that the defendant was not privy to it, until it had been prepared and he requested to execute it, as a formal trustee, upon the promise of Foster- and the plaintiff, that it should give him no trouble. It states that, in point of fact, no part of the property was ever in the defendant’s possession or power; for that, when the deed was executed, all the property was subject to executions, under which it was sold and exhausted, except the sawmill and lot, and that the defendant knew of no surplus, of the proceeds of those sales, being in Foster’s hands after satisfying the executions.

With respect to the sale of the lot and saw-mill, the answer states, that the plaintiff and Foster informed the defendant, that they could make an advantageous private sale of it to John Sheek, which would extinguish C. Sheek’s large debt, for which Foster was bound, and they requested the defendant to come into the arragement; and that he replied that he had no objection, if all the parties, who were interested, desired it; that thereupon the plaintiff and Foster made the sale, as they informed him, to their satisfaction, and the defendant had nothing to do with it, and supposed the price paid and applied properly by those parties, and never suspected to the contrary, or heard of the note of John Sheek for $384 33, until after November 1840 ; that in November 1840, Foster executed to the defendant an assignment of his stores and other property, in trust to pay specified debts, far beyond the value of the effects; and that, sometime after-wards, the plaintiff and Foster brought to him Sheek’s note for $384 33, cancelled, and informed him, that it had been given for the saw-mill, and that the money on it, had been, by the consent of the plaintiff, paid to Foster, and that Foster (who had become insolvent) wished, if he could, to secure it, or as much of it as exceeded the debts to Foster, for the benefit of the plaintiff’s trust fund; and to that end Foster then agreed to place in the defendant’s hands, notes and accounts, not included in his previous assignments, to cover the amount that might be due from him in respect of Sheek’s note. The answer states, that the defendant was desirous of securing in that way, debts which Foster owed to him, and also this trust fund, which the plaintiff had improperly allowed Foster to misapply; and that he endeavored to obtain from Foster an assignment of debts for those purposes, according to his promises ; that Foster did deliver to him some notes and accounts for his own debts, which nearly all proved worthless ; and also other notes and accounts on account of the debt he might be found to owe by reason of Sheek’s note ; that the defendant immediately brought suits thereupon, .and that upon the trials, judgments were rendered in nearly every case, against the plaintiff, upon proof or Foster’s acknowledgement of payment; so that not enough was recovered on them to pay the aggregate of the costs on them. The answer finally insists, that the defendant Is not answerable to the plaintiff in respect to Sheek’s note, as the transaction was that of the plaintiff himself and not of the defendant; and that if he would be liable under any circumstances, he is not under those existing, because he has never received any effects under the deed, and, also, because there are balances due to the creditors provided for in the deed, besides Foster, to a larger amount than the bill claims as the surplus due from Foster on both parts of the case.

The answer then offers, that, if the plaintiff thinks it worth his while and will indemniiy the defendant against the costs, he may prosecute a suit against Foster or any other persons he may elect, in respect of any of these' claims, and submits, that, as he has no funds and Foster and the' plaintiff are both insolvent, he is not bound to bring any such suits without an indemnity.

The plaintiff examined several witnesses. One is John Sheek, who says, that when he purchased the sawmill, he gave his note to the present plaintiff, who delivered it to Foster, upon an agreement between them, that Foster should account for it upon the settlement of Nail’s trust. The witness says he afterwards paid Foster the note, and heard Foster tell Martin, that he, Foster, was to account for the note upon the trust.

James S. Martin states, that he heard the plaintiff several times state to Foster, that he had more money in his hands, than he had claims to cover, and request a settlement; that Foster became utterly insolvent in the summer of 1840, and executed an assignment before November Court in that year, which, however, will not yield the creditors a dividend of more than fifteen cents in the dollar, and that the defendant could not have recovered any thing from him, by a suit brought after May, 1840 ; that, after Foster made his assignment, the plaintiff and Foster came to a settlement, on which, with the assistance of the witness, they found the balance due from Fester to the trust fund to be $216; and that there is still due upon the debt to the witness, and on those for which he is surety, provided for in the deed, about the sum of |800.

A witness proves, that the defendant held a bond given by the witness to Foster for $170, which the defendant told him Foster had transferred to him, in part of a debt which Foster owed the defendant for wages on his own account.

Another witness, who is a constable, proves that the defendant placed in his hands a number of notes, payable to Foster, with directions to warrant on them, in the , name of Foster, to the use of Martin, as trustee for Nail; that he did so, but failed in nearly every one by proof of settlements, and that he did not collect on all enough to pay the costs of the warrants dismissed at the plaintiff’^ costs.

Craig, for the plaintiff.

Boyden, for the defendant.

Ruffin, C. J.

The trust between the parties, created by the deed, being admitted, it would, generally, be a matter of course to refer the accounts to the Master. But the defendant objects to the unnecessary expense and trouble of their reference in this case, because it appears clearly upon the pleadings, and the plaintiff’s own proofs on file, that the account cannot result in favor of the plaintiff; for the defendant has not, and never had, any trust fund, and, if he had the amount charged by the bill, he would not be accountable to the plaintiff upon this bill. And-the Court is of opinion, on those points, witli the defendant.

The creditors secured by the deed are nót parties to the cause, but the bill is brought by the debtor alone, and prays for the payment to himself of an alleged surplus, remaining after the payment of all the debts. Now, he has himself proved that there is no such surplus ;'for his witness states, that, to that witness alone, $800 remains due, and both of the sums claimed in the bill amount only to $602 33. It may be admitted, that, even in those sums the plaintiff has an interest, as, by the application of them to the debts, he would be personally exonerated to that amount; and he has a right to call on the trustee and the creditors to make the application: and, therefore, that the bill ought not to be dismissed, but allowed to stand over in order-to make the creditors parties. But even that ■would not sustain the bill, for the plaintiff can only insist on being exonerated from the debts, as between him and the defendant, as far as the defendant is liable by his own default, and not by that of the plaintiff, to answer to the creditors; for the plaintiff, in this suit, is endeavoring to take care'only of his own interest, and not that of the creditors. Now, it is very certain, that the whole sum with which the defendant can be charged to any one, is that which may be found to be in Foster’s hands, on account of the surplus of the sales on execution, and of Sheek’s note, the latter of which is admitted to be $384 33, and the former the bill states to be $218. But those two sums, amounting together to $602 33, are not in fact due. as appears upon the evidence of the plaintiff’s witness, James Martin, but only the one sum of $216. For, Foster, as a creditor, was secured in the deed to the amount of $500, besides indemnified as a surety ; and in August,'1840, the plaintiff let him have Sheek’s note, to be applied to Foster’s own use, and to be accounted for by him in the settlement of the deed of trust. There is no evidence of any balance due from Foster, except that the answer states, that he admitted to the defendant, that there was one on account of Sheek’s note, but to what amount he did not state ; and except what appears upon the deposition of James S. Martin — which is, that after Foster made his assignment, that is, after November, 1840, the plaintiff and he settled their respective demands, under the deed and execution sales, and that Foster was found to be in debt $216. That was the whole balance, and must have included Sheek’s note, for no one states that there was any surplus of the sales on execution, except the plaintiff in the bill. ■The witness, Martin, does not intimate it, and the answer denies it, as far as the defendant knows. ■ No doubt, in the settlement, Foster included the debt to himself, which it is not pretended was in judgment and satisfied out of the execution sales; and so, it must be understood, it was intended he should do, when the note was delivered to him by the plaintiff, because he was to account for it upon .the deed. The whole debt of Foster, therefore, arose upon the transaction respecting Sheek’s note ; and, whatever fault the other creditors may have a right to find with the present defendant, for allowing the mill to be thus sold and the proceeds applied, the present plaintiff surely cannot complain, inasmuch as it was his own act. Therefore, he has no right to ask. that the defendant should exonerate him from that amount of the secured debts.

But the bill brings forward a claim, founded upon the opportunity the defendant had, and his consequent obligation, to secure this balance out of the effects of Foster. In respect to the plaintiff, the defendant was not under any obligation to secure the sum in question; for the loss had been occasioned by the plaintiff, and it was his look-out to repair it. But in truth, the witnesses prove, that the defendant did all he could. It was in vain to sue Foster, for the sale to Sheek was in August, and, before November, Foster had conveyed all his tangible estate. Then nothing remained but to get whatever Foster would voluntai-ily offer of the debts due to him. Those the defendant took, as far as he was able to get them, for aught that can be seen ; and a witness for the plaintiff again proves, that the defendant was not able to realize one cent from them.

It is therefore a case, in which the defendant has nothing, and never had any thing to account for, as between him and the plaintiff, and in which he is endeavoring to make the defendant liable for the consequences of his own blind confidence in Foster and the latter’s insolvency. As this appears clearly upon the plaintiff’s own proofs, read at the hearing, the Court allows the objection of the defendant to a reference, and dismisses the bill with costs.

There is an inconvenience, to which the Court is often subjected, and which has been so particularly felt in this case, as to make it proper to draw the attention of the profession to it. Pleadings ought to be plainly written and the words spelt in full, and without contractions— especially papers that are sworn to. As the profession is not remarkable for good hand-writing, and, from much use to a variety of hands, can read almost any paper that has the words with all their letters, the Court is not disposed to be very particular. But, really, bills and answers are often submitted to us, in which there are so many contractions, words half spelt, and carelessness in hand-writing, that, with all our experience, we find it difficult to decipher them. In many instances words are to be guessed at from the context; for it is impossible to read them by themselves, as, indeed, they are not words, but only some of their component letters. A conviction for perjury could not be had on them. If such papers be sent to us again, we shall be compelled to put the parties to the expense of making fair copies, and, perhaps, order the originals to be taken off the file, or dismiss the suit.

Per Curiam.

Bill dismissed with costs.