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Selser v. Ferriday et al.

which had been sold to Shipp, Ferriday & Co., and Ferriday enjoined the sale. He shortly afterwards, through his agent and attorney, prevailed upon the holders of the older executions to withdraw the levy, and make new levies on the trust property, and then waived the advertisement, and the property was sold the day after the levy. It was said by the chancellor that he had a right to do this. True, he had a right in equity to require the plaintiffs in execution to exhaust the property which had not been sold by Carradine, before they resorted to that which had been sold to Shipp, Ferriday & Co. But such precipitancy was not required. Their judgments were then enjoined as to his individual property, and he might have left the plaintiffs to pursue their remedy against the trust property of their own accord. This course is calculated to throw a suspicion over the fairness of the deed of trust. Besides, there are many other circumstances, which tend to show a want of good faith. The apparrent hardship of the case is, therefore, the less a subject of regret than if the complainant had presented himself without blame. Corwine, it is true, states that the transaction was a fair one. He may have thought so, but he is not a competent witness, and his testimony is, therefore, to be excluded.

Decree reversed, and bill dismissed.

A re-argument was moved for, but not granted.

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T. F. W. conveyed to J. F. W. and W. R. L. property real and personal in

trust, to secure G. B. against heavy indorsements and liabilities which he was under for T. F. W.; J. F. W. and W. R. L., the trustees, sold a large part of the trust property under the trust deed, which was purchased by G. B., the beneficiary therein, but afterwards, at the instance of T. F. W., the grantor therein, refused to convey, upon the ground that at the time of the sale, the state of facts did not exist, which, by the terms of the deed of trust, authorized a sale : Held, that a deed of trust is but a power coupled, perhaps, with an interest; to legalize the execution of the power, those circumstances must exist, upon which the right to exercise it is made to

depend. In this case the deed of trust provided that the trustees might sell upon joint

request of B., the cestui que trust, and W., the grantor, or in case B. should suffer any loss or damage on account of his indorsements for W., then they should sell when requested by B.; a sale was made by the trustees upon request of B., and without objection from W., but with his presumed consent; W., in his answer to a bill filed by B., who bought at the sale, to enforce a conveyance, says he forbade the trustees to make a deed after the sale, “because he had discovered that complainant was fraudulently pretending that he was purchasing the property for the purposes of the trust, and after purchasing it, was converting it to his own use without making provisions for the trust debts : " Held, if there were a combination between complainant and W., that complainant should purchase at a reduced price, and afterwards give to W. a share in the proceeds of any advanced or increased value, the creditors would have cause to complain, and might, on such proof, set aside the sale; but a party to such compact could not have the matter investigated in equity.

This case having involved much feeling in its progress, the Reporters, who were counsel for one of the parties, thought it best to have it reported by a disinterested person. The profession are indebted to the labors of R. Barnett, Esq., for the able and accurate report here presented.

Walker v. Brungard et al.

W., in his cross-bill alleged, that a brick house, part of the property embraced

in the trust deed, was sold by trustees, and purchased by B., and to him conveyed, with the understanding that it should be afterwards mortgaged to the Union Bank to raise money, and that the amount so raised should be applied to benefit of trust fund ; B. positively denied this in his answer ; the deed to the property is absolute and unconditional, the testimony mostly relied on to assail it is that of the trustees : Held, that as the agents of all the parties interested under the trust deed, it was the duty of the trustees particularly to the creditors, to make none but an open, fair, and bona fide sale, they should not have lent themselves to a secret understanding between W. and. B. which was a departure from good faith, and created risk and hazard to the creditors in the deed of trust; but at most this amounts

only to a parol agreement in regard to land, and not to a resulting trust. A resulting trust is where the conveyance is taken in the name of one person,

while the consideration is given or paid by another; so, if trust money be invested in land, the money may be followed, and a claim of this sort may

be supported by parol evidence. B. denied that he made the purchase in trust, or that trust funds were paid for

it, and there was no written evidence; his deed from the trustees cannot be

set aside or declared subject to a trust upon such testimony. In the conveyance from W. to trustees, for benefit of B., was embraced a

tract of land of 320 acres, which was afterwards levied on and sold by the sheriff, under an execution issued upon a judgment against W. older than the deed of trust, and purchased by B., the cestui que trust, and deed made to him by the sheriff; this tract of land was afterwards sold under an execution against B., and bought for B.'s wife, with her own separate funds, for a less sum than at the first sale: Held, that although B., after his purchase at sheriff's sale, promised W. that he should have the benefit of it after sale, yet as this was a promise made by B. after the purchase, without any previous agreement, and without any consideration to support it, it

could not have been enforced if the land were still in the hands of B. A cestui que trust may certainly purchase the trust estate as freely as any third

person ; but even to hold that the purchase of the plantation converted B. into a trustee, and that the sub-purchaser was likewise a trustee, the sale could not be set aside without a decree for the repayment of the purchasemoney, there being no offer to make such payment, nor evidence to show that the land is now worth more than it brought when sold, the sale could

not be set aside. If the agent appointed by the trustees in a deed of trust, with the consent of

the grantor in the deed, or the surety of such agent be subjected to a recov. ery resulting from an effort to recover or secure the trust funds, the trust estate would be justly liable for the damages, if the agent acted with good faith and with reasonable skill and diligence.

Walker v. Brungard et al. Reasonable diligence and good faith are what is required of an agent. A party being about to purchase a large amount of real and personal estate,

obtained a friend to indorse his paper, and to procure others to indorse it, to enable him to make the purchase ; and for doing this he paid the person thus indorsing and procuring other indorsers for him, a large sum; afterwards the maker of the note being about to fail, conveyed a large amount of property to this indorser for his indemnity : Held, in a subsequent accounting between the maker and indorser, touching this property so conveyed, that the indorser could not be compelled to account for the sum previously paid him as a bonus for indorsing and procuring indorsers on the paper of

the maker. Where a maker of a note who became insolvent, conveyed, among other pro

perty, a remnant of a stock of goods to his accommodation indorser for his indemnity, which goods the latter sold, it was held, in an accounting between the maker and indorser, that the latter could not be held accountable for the invoice price of the goods, but merely for what they brought when

sold. An agent or trustee, to whom certain notes belonging to a trust were committed

for collection, instituted proceedings at law by attachment against slaves and property of the parties to the notes, and was compelled to give bond with surety, to prosecute the suit to effect; he failed in the attachment, and being · threatened with a suit on the bond against himself and surety, compromised the matter by delivering up all the notes on which he had sued; which nominally amounted to a large sum, but really were worthless: Held, that if the trustee acted in good faith and reasonable diligence in the matter, he would not be liable.

APPEAL from the decision of the superior court of chancery; Hon. Stephen Cocke, chancellor.

On the 29th of February, A. D. 1840, George Brungard filed his bill against William R. Lewis, John F. Walker, and Thomas F. Walker, in which he avers, that on the 15th day of January, A. D. 1838, Thomas F. Walker and his wife, in the sole consideration of accommodation indorsements by George Brungard for him, had conveyed to William R. Lewis and John F. Walker, in trust, certain real and personal estate, with power to take possession of the same, and by virtue of provisions in the deed, to sell or exchange the property conveyed in the deed ; to collect the notes and accounts, and pay the proceeds of sales and collections to the discharge of the notes upon which Brungard was indorser; and that it was also provided, in case

Walker v. Brungard et al. Brungard should be damaged by the levy of executions, or otherwise from the non-payment of these notes, the trustees should, at the request of Brungard, sell property and indemnify hinn for his losses. A copy of this deed is made an exhibit to the bill. It is a deed of three parties, and it recites, that whereas Walker was anxious to secure Brungard against any loss or damage, he might suffer by reason of his indorsements " for the use of the said Thomas F. Walker,” on notes, the aggregate amount of which was upwards of one hundred thousand dollars, and also to secure the payment of the notes themselves, which are detailed at length, and recited to have been indorsed by Brungard, at the special instance and request of, and for the accomodation of, said Walker; now, therefore, Walker, for this and the consideration of one hundred dollars in hand paid, conveys to Lewis, and to John F. Walker, certain real and personal estate, and choses in action enumerated in the deed, on trust, that they should forth with take possession and seisin of the premises, and, in the mode pointed out by consent, sell or exchange the property, and collect the notes and accounts, and pay off the enumerated debts; or, in case Brungard was damaged by reason of the indorsements, they might sell to indemnify him; and in case of a vacancy in the office of trustee, that Brungard and Walker might nominate another. This deed was regularly proved and recorded on the day of its execution.

The bill further states, that Brungard has paid large sums for Walker, as stated in an exhibit to the bill, which shows a balance in favor of Brungard of $10,986.04.

That the trustees, under the powers contained in the deed, had, on the 13th day of February, A. D. 1839, sold certain of the real estate conveyed by it, which had been purchased by Brungard for $600, who had demanded of the trustees a deed thereto, who had refused to make a deed, on the ground that Thomas F. Walker had forbidden it; that'most of the notes and accounts conveyed by the deed of trust were worthless, the land had depreciated in value, and Thomas F. Walker sold and converted part of the personal effects to his own use; that

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