McNeely v. Steele, 45 N.C. 240, 1 Busb. Eq. 240 (1853)

Aug. 1853 · Supreme Court of North Carolina

45 N.C. 240, 1 Busb. Eq. 240

JAMES AND AMOS McNEELY against THOMAS STEELE.

Where an injunction had been obtained against a trustee, forbidding him to sell slaves which were part of the trust fund, upon the ground that the purposes of the trust had been fulfilled; and upon the coming in of the answer the matter was left doubtful whether that allegation was true; the injunction was continued to the hearing.

(The cases of Purnell y. Daniel, 8 Ire. Ecp 9; and Lloyd v. Heaíh, ante, 41 cited and approved.)

This was an appeal from an interlocutory order, made by bis Honor, Judge Ellis, at Iredell, on the last Spring Circuit, dissolving the plaintiff’s injunction, which had theretofore been granted in the cause. The following is the Gase presented by the bill and answer:

In the Fall of 1845, the plaintiff, Amos, being about to remove to the State of Tennessee, and being indebted to sundry persons, applied to his brother, the plaintiff James, to become his surety for the payment of all of his said debts, amounting to several hundred dollars; and the said James accordingly did bind himself therefor, as surely for said Amos. James was, however, at this time indebted to his brother, Amos, on two bonds, one for $269, due in 1843, and another for $130.68, due in 1844 j and the bill alleges that these two, bonds, together with several other bonds and evidences of debt due by'other persons to the plaintiff, Ámos, “ were placed in the hands of the defendant, Steele, as an agent and trustee of the said Amos and James', upon the express understanding and agreement, that whenever your orator, James, paid your orator, Amos, the amount of the said two notes, then the said Thomas Steele should surrender and deliver up to the said James his said two notes and the bill alleges, that all the said notes, so due Amos, as well also “ a carriage worth $300, and a cupboard worth $15, were placed in the defendants hands as a security or indemnity for the said James, in his undertaking as surety for his brother, Amos,” — the defendant having no interest therein, but receiving them as. agent and trustee for the plaintiffs, and at the same time receiving a tract of land from said Amos, to be sold for the same purposes. After the removal of Amos to the west, the plaintiff, James, states that “for (he purpose of satisfying the defendant and some of his own creditors, he did, on the 16th February, 1846, execute a .deed of trust to the said Tilomas, for two negro slaves, Zilla and Sam, for the purpose of securing the payment of the said two notes due your orator, Amos, from your orator, James, and likewise'for the purpose of securing various other debts, mentioned in said deed of trust, whkh your orator, James, then owed ” (enumerating them); but the plaintiff, James, expressly charges that, though the said two notes, due and payable by him to the plaintiff, Amos, “ are mentioned and described in the said deed of trust, as debts due to the trustee, Steele, yet in fact and truth they were payable and due to your orator, Amos, and that the defendant, Steele, had no interest therein, save as agent and trustee, as'above set forth,” to wit, that as soon as “ your orator, James, paid the amount of said notes to the said creditors of Amos; in discharge of their said debts, then the defendant, as agent and trustee, was to surrender and deliver up the said two notes to your orator, James.”

The plaintiff, James, then alleges that in pursuance of the said agreement with his brother and the defendant, he proceeded to pay off the debts due by Amos, to a larger amount than the said two notes due by him to Amos; and that he hath since, by the consent' and approbation of Amos, called on the defendant to deliver up to him the said two notes, and .that he hath also, as agent of the said Amos, called on the defendant for an account and settlement of all the debts and other property entrusted' to him as agent, as aforesaid ; but though (in 1848 or 1849) he delivered up to him, the plaintiff James, the note for $269, yet he refuses to surrender the other note, for $130.68, and that he so refuses, notwithstanding the plaintiff, Amos, has given to the plaintiff, James, his receipt in full against the said note; and that he likewise refuses to come to a settlement of his accounts' with the plaintiff's. And the bill further charges, that the defendant has advertised for sale, the slaves Zilla and Sam, conveyed by said deed of trtist, and threatens to sell the same, although, as the plaintiff, James, charges, he has paid off and satisfied all the debts therein named, and has the same in his possession, except the said notes from him to his brother, Amos, which'are also satisfied in the manner above set forth ; and that he owes the defendant nothing whatever. The prayer is for an injunction against the defendant’s selling said slaves, for a reconveyance of the property conveyed in trust by James, for a surrender of the note to the plaintiff, Amos, of $131.68, and for an account.

The defendant in his answer admits that the plaintiff, Amos, shortly before his removal to the west, placed in his hands the said two bonds of James, together with other claims due to the said Amos, and also a carriage and cupboard ; but he denies that this property or any part of it was left with him, as trustee or agent, for the purpose of indemnifying the plaintiff, James, as in the bill alleged, or that it was placed in his hands on any trust whatever. On'thé contrary, the defendant avers, that “he bought the carriage and cupboard from the plaintiff, Amos, and accounted fully and fairly for their value, and that the bonds of James were transferred to him unconditionally,,as his absolute property, to cover money advanced to, and debts assumed for,, the plaintiff, Amos.” And the defendant avers, that he and the plaintiffs being near neighbors and on terms of great intimacy and friendship, find at the time Amos was about leaving the State, the defendant having command of a considerable amount of ready money, the plaintiff, Amos, came to him, and told him that he was obliged to pay certain debts before he could get away, and urged the defendant to take the said two notes of James, and also one on his brother, Silas, for about $--, that he, the defendant, was able to wait with them, and he did not wish them pressed ; that to befriend the said Amos, he took the said notes, and in consideration therefor assumed certain debts due by him, amounting to less than the amount of James’s and Silas’s notes, the balance due whereon he paid to said Amos in money. And the defendant says that James and Silas were fully cognizant of the fact and nature of this transfer — that the same was for a full consideration, nor was there, until the last twelve or eighteen months, any pretence that they were held 'by the defendant as agent or in trust. So far from this, as the defendant avers, the bond on said Silas was transferred to one Reed, and has been paid off by him long since ; that the bond of $269 due by the plaintiff James was also paid off by him to the defendant some three or four years since, without objection or complaint, or any pretence that he was entitled to have it surrendered for debts paid by him for Amos as charged; and that previously to his payment of said note, the plaintiff James had executed to the defendant two deeds of trust— that mentioned in the bill of complaint, and another of date 8th December, 1845, in both of which the plaintiff<c James solemnly recognizes his indebtedness to this defendant by reason of the bonds transferred by plaintiff Amos, and makes provision for the payment of the same.” The defendant admits that plaintiff Amos left with him a tract of land, to rent for, him, but avers that afterwards, and before the removal of said Amos to the west, he contracted to sell a portion of the same to one Jameson and wife, agreeing to take in part payment some land in Tennessee belonging to Mrs. Jameson ; but owing to some delay in procuring the deed of the parties, the said Amos made a deed for the land to-the defendant, with instructions to convey to Jameson his part, and the residue to the mother of said Amos ; but that the bargain and sale between said Amos and Jameson was consummated before the removal of'the former, and that defendant, in his presence and by his sanction conveyed said land to Jameson, and that the said Amos received the purchase money paid ; and as to the other part of said land, the same was afterwards sold by the defendant, according to the directions of Amos, and the money received therefor paid over to James. And the defendant denies having received any rents on account of said land.

The defendant admits that he has advertised for sale the slaves Zilla and Sam, and insists that he should have proceeded to sell the same, but for the injunction herein granted — averring that the plaintiff James was about removing out of the State with his property, and that he is entitled to have a sale thereof to satisfy the balance of the debts secured in the said trust and remaining um paid, to wit, the said note of James for $130.68, and interest thereon, and a balance of a note due one Thomas, to wit, $24. As to the rest of the debts secured by said trust, the defendant admits they have been settled and paid ; and as to the receipt given by the plaintiff Amos to James against the note of the latter for $130.68, he avers that the same was by collusion between them to defeat the collection of the same at law. And further answering, as to the several claims left with the defendant by the plaintiff Amos as due him, the same were against insolvent per-" sons, and nothing was received thereon with the exception of $55.49, one-half whereof was paid to the plaintiff James in December, 1852, on a full settlement with him of said,claims, and the other half was retained by the defendant, under an express agreement with Amos, who regarded-the said claims as insolvent, to take that share for-his trouble.

Boyden, for the plaintiffs.

Craige, for the defendant.

Nash, C. J.

The bill is filed for an account of a trust fund and reconveyance, and to restrain the defendant from selling a couple of slaves, a portion of the trust property. The account and reconveyance are claimed upon the ground that the debts for the payment of which the trust was created have been discharged b3r the plaintiffs, and the., injunction, upon the ground of irreparable mischief to the plaintiff-, if the slaves are sold by the defendant. Upon the conring in of the answer the injunction was dissolved by the presiding Pudge, and the only question presented to us is as to the correctness of this interlocutory order. The whole equity of this case is covere'd by that of Purnell v. Daniel, 8 Ire. Eq. 9. The principle which is to guide us here is so plainly stated there, that we cannot do better than to recite it: — u This, (says my brother PeársoN, in delivering the opinion of the Court,) is not the case of an ordinary or common injunction, in aid of, and secondary to, another equity ; but it is the point of the cause. It is to prevent irreparable injury, as is alleged, and to dissolve the injunction decides the case ; for to dissolve it allows the act to be done.” Again, in the case of Lloyd v. Heath, ante, 41, the Court. sa3r, “ where the plaintiff fails to elicit from the defendant a discovery which admits tire allegations of tire bill, the bill is allowed to be read as an affidavit on the part of the plaintiff, and if upon the whole case the matter is left in doubt, the injunction will be continued to the hearing, to allow the plaintiff a chance to support his allegations by proof, before a thing the consequence of which is irreparable is allowed to be done.” In both those cases the injunctions were special, restraining acts of a special nature, and in disposing of them a different rule exists in Courts of Equity from that of dealing with a common injunction to restrain proceedings at law.

In this case the injunction is of the former kind ; and to dissolve it is to permit the act to be done which is to produce to the plaintiff an irreparable mischief. The bill charges that the plain'tiff; Amos McNeely; being considerably indebted, and about to remove out of .the State, and desirous to secure to his creditors the payment of their debts for which the other plaintiff was surety, placed in the hands of the defendant, Steele, several notes and bonds, and some household furniture, and that James by two deeds of trust, conveyed to the said Steele a tract of land and two slaves to secure the payment of the debts enumerated in them, with an express stipulation that if the debts so due were paid by the plaintiff by a time specified, the property was all to be recon-veyed. The bill then alleges that all the debts so secured have been discharged by the plaintiff. Among the notes placed in the hands of the defendant were two given by James McNeely to the other plaintiff Amos for money due him, one for $209, and the other for $130.68. In the bill it' is alleged that those notes constituted a part of the trust fund, and that the first has been paid, but that the other remains still in the possession of the defendant, and that he threatens to sell the slaves mentioned in the deed to satisfy it. In the answer, the payment of the debts enumerated in the deed of trust is admitted, except as to a note for thirty dollars, and the one on James McNeely ; but it denies that the last mentioned note constituted any of the trust fund, and avers that the same was transferred to the defendant in absolute property by Amos McNeely, and was among the debts intended to be secured ; and that to discharge it, he had advertised the slaves so conveyed. The pleadings then do not present the case of a common and ordinary injunction “ in aid of and secondary to another equity,” but it is in itself the point in the case, and to dissolve the injunction, decides it. The real dispute is, in whom 'is the title and interest in the note for $130.68 — a matter which is left in doubt and must be further inquired into : in which case the injunction must be continued to the hearing. ■

, In the interlocutory order dissolving the injunction there is error, and the injunction must be continued to the hearing. This opinion will be certified.

Per Curiam.- Interlocutory order reversed.