Walker v. Brungard et al.

sell them by the consent of Walker and Brungard; or the trustees may sell the same for such price or prices as Brungard and the trustees shall deem reasonable.

2. It is made the duty of the trustees to take possession of the notes conveyed in trust, and proceed to collect them by suit or otherwise, and after deducting the expenses of the trust, the proceeds arising from the notes, and the money arising from the sale of the lands, should such take place, was required to be appropriated to the payment of the notes upon which Brungard was indorser; and to that end it was directed, that the money so collected should be deposited by the trustees in the Railroad Bank of Vicksburg, until the notes indorsed by Brungard should arrive at maturity, when the money so collected should be appropriated to their payment.

3. It was further provided, that in case Brungard should suffer loss or damage by reason of any execution or executions being levied, then the trustees should, (being thereunto requested by Brungard) proceed to sell to the highest bidder, at public auction, for cash, the land and personal property mentioned after thirty days' notice in a newspaper, published in Warren county, or so much thereof, as should be sufficient to indemnify Brungard from time to time for his losses.

The first sale of any of the property mentioned in the trust deed appears to have been portions of lots 55 and 56 in square 11, in the town of Vicksburg, being the brick store sold in January, 1839. This was at auction, all parties consenting, and after due publication had been made. At that sale Brungard became the purchaser at the sum of two thousand dollars, and on the 14th of January, 1839, obtained a deed from the trustees for the same, they acknowledging to have received from him the payment of the purchase money. But the cross-bill of Walker alleges, that the purchase was made for the purpose of being put in the Union Bank, to raise money for the purposes of the trust.

The testimony of John F. Walker, one of the trustees, is to the effect, that the sale of the brick store was effected by a concerted agreement between the trustees and Thomas F. Walker, that Brungard should buy at the nominal price of $2000, and

Walker v. Brungard et al.

put the property in the Union Bank for the benefit of the trust fund, to enable Brungard to meet his engagements for Walker, and not for Brungard's own use.

William R. Lewis, the other trustee, states, that he was present at a conversation between Walker and Brungard, about the brick store which he, as trustee, was to sell in January, 1839; that in this conversation Brungard said, that as property in the hands of trustees could not be mortgaged to any bank, he, Brungard, was to become the nominal possessor, in order to place it in the Union Bank, the proceeds of which was to be for the exclusive benefit of the trust fund, and Brungard was to give Walker a letter to that effect.

Brungard, in his answer to the cross-bill, positively denies that the sale under the deed of trust to him in January, 1839, was without consideration, or void; alleges that he was then largely in advance to the trust fund, that the property was sold by the trustees to pay him, that the sale was on due advertisement, open and fair, and he the highest bidder. He denies, that the sale was on condition of getting money on a mortgage through the Union Bank; admits that something was said about the mortgage after, nothing before, the sale.

E. D. Downs in his testimony states, that Brungard was present at the sale of the brick store, and urged him and others to bid for it.

I consider myself relieved from the necessity of attempting a reconciliation of this conflict of statement, or of passing on the competency of the trustees to gainsay the validity of their deed to Brungard, the rule of law being that a mere verbal agreement in relation to real estate is not sufficient to create a trust. It must be in writing to be valid.

There are, however, exceptions to this rule, such as resulting trusts, part performance and the like, but the exceptions have no application here.

I am not aware of any principle in equity jurisprudence that would justify my setting aside the deed of the 14th of January, 1839, of the trustees to Brungard, nor of declaring it a trust to support the verbal agreement contended for by Walker.

Walker v. Brungard et al.

The second point for consideration is the validity of the sale of what is called the plantation, in September, 1839, under execution against Brungard, and the previous purchase of the same by Brungard, at execution sale against Walker and others.

It seems that, at the time of the execution of the trust deed, there was a prior outstanding judgment lien on the land against Walker.

It was obviously the duty of Walker to pay and satisfy this outstanding incumbrance, so that the trust deed might properly operate in favor of the beneficiary of the trust. This not being done, Brungard was left to the alternative either of allowing the land to be purchased by another, to purchase for his individual use, or for the benefit of the trust.

It appears by his letter of the 14th of May, 1838, that his object was, the more speedily to relieve his indorsements on Walker's paper, and to give Walker the benefits of its after-sale. Before any benefit, then, could inure to the trust, the land had to reimburse the purchase-money to Brungard; the surplus, on its subsequent disposition, would properly belong to the trust. In its after-sale, however, as the property of Brungard no benefit accrued, it having failed to bring the money that Brungard had given for it at the execution sale against Walker.

The result of this whole procedure, then, is precisely the same as if this land had never been included in the trust deed.

In the next place, it will be proper to consider these matters connected with Salmon and Mrs. Brungard's purchases.

Having determined that Brungard's purchase in January, 1839, of lots 55 and 56 was valid, it follows as a consequence that Walker has no right to complain of any disposition which Brungard may have seen proper to make of these lots, or of that which the law may have made for him. Salmon's purchase was therefore in nothing affected by the alleged verbal agree

ment.

But the purchase of the plantation, as shown by Brungard's letter to Walker, was subject to the benefit of Walker, of that which it would realize in its after-sale, beyond the sum which Brungard had paid for it at the execution sale as the property of Walker.

Walker v. Brungard et al.

Brungard being the owner of the plantation, it was of course subject to seizure and sale, as his property. It was levied on and sold as his. At that sale it was competent for Walker to attend, and make it bring more than it had brought at the execution sale as the property of Walker. Had he done so, he would have been entitled to a credit on Brungard's indorsements for the overplus; but instead of this, it appears he attended the sale, and interposed pretensions well calculated to make it bring less, and it actually brought less. Under such circumstances, it is difficult to perceive the grounds upon which Walker can attack the validity of the sale of the land as the property of Brungard.

It makes no difference, then, whether Mrs. Brungard or her agents or trustees had or had not notice of Walker's pretensions; the purchase for her with her own money, derived through the will of her uncle, was valid.

The next subject of consideration, is the matters of the notes and accounts mentioned in the trust deed.

By the deed, it appears they were conveyed to the trustees to be by them collected for the benefit of the trust; but by the consent of all the parties, they went into the hands of Brungard for collection, the proceeds of which, when collected, were to pay the notes of Walker, on which Brungard was indorser. This arrangement constituted Brungard agent for the trustees. The amount collected should of course be charged to Brungard, and being agent and beneficiary, what has been lost by his neglect or mismanagement should be placed to his debit; but if he gave them due and proper attention, and they were lost in consequence of the insolvency of the debtors, or other cause beyond his reasonable control, the loss should be Walker's. To fix the accountability of Brungard, Walker should have shown that the parties were solvent, and that, by the exercise of reasonable diligence and attention, collections could and ought to have been made. But there is no such showing; on the contrary, Lewis, one of the trustees, says, he cannot swear how much, or what amount of debts and accounts of Walker, in Brungard's hands, were good, or might have been collected. William C. Smedes

Walker v. Brungard et al.

states, that Samuel Anderson, in 1839, was insolvent, and the other parties to the notes surrendered up by Brungard were reputed to be insolvent.

Robert L. Moore states, that Tate & Poindexter, Fisher, Goodman, Wharton, Anderson, and Shelton, were insolvent in 1839, and continued so to the giving of his testimony; that the claims were all of bad character, and not enough was collected from them to pay the fees due.

Nelson F. Shelton, Sen., states, that he is the uncle of Samuel Anderson and Nelson F. Shelton, Jr.; that he has known them from their infancy; that he knows and has long well known their pecuniary condition; that they were both utterly insolvent; and that, since 1839, nothing could be made out of them.

John B. Bemers, the attorney who compromised the suit for Anderson against Milligan, states that he would not have paid the cost of the suit and the damages, for the notes given up by Brungard when he compromised with Anderson.

Henry Poindexter, of the firm of Tate & Poindexter, files a statement of the notes given up by him in the compromise by Brungard, and states that all the parties thereto were insolvent, and none of the notes paid.

Under this showing, I see nothing on which I could charge Brungard on account of the notes and accounts, beyond those which Brungard has reported he has collected.

It is claimed by Walker, that Brungard received a bonus of ten thousand dollars' worth of goods for his indorsements on Walker's notes. This he might well do for the risk of indorsing. A man may rightfully sell his credit, and receive payment of the contract price for it. Walker would not the less be bound to free Brungard from loss on account of his indorsements, nor would his engagements in the trust deed be less obligatory on him.

In the next place, Walker in his cross-bill claims that Brungard has not been made liable for more that thirteen thousand dollars, and that he will not be made liable for any more, because the notary public who protested said indorsed paper, had died and left no record of protest and notice.